CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

CONSOLIDATED & SEPARATE FINANCIAL STATEMENTS AT DECEMBER 31, 2025

DIRECTORS' REPORT

CORPORATE BOARDS	2
THE GROUP AND ITS ACTIVITIES	6
2025 SIGNIFICANT EVENTS	10
REGIONAL COMMERCIAL PERFORMANCES	12
2025 FINANCIAL PERFORMANCE OVERVIEW	14
The Group	14
The Parent Company	18
Reconciliation between consolidated net profit & Parent company net profit	20
The BasicNet share price	20
PRINCIPAL RISKS AND UNCERTAINTIES	22
OTHER INFORMATION	26
Essential intangibile resources	26
Human resources and the environment	27
Treasury shares	27
Disclosure on the stock option plans	27
Opt-out regimes	27
Shares held by directors and statutory auditors	27
Transactions with holding companies, associates, other investments and related parties	27
Research and development	28
SUBSEQUENT EVENTS TO THE YEAR-END AND OUTLOOK	30
PROPOSAL TO THE SHAREHOLDERS' AGM TO APPROVE THE FINANCIAL STATEMENTS FOR THE YEAR	31
PROPOSAL FOR THE ALLOCATION OF NET PROFIT FOR THE YEAR 2025 AND DIVIDEND DISTRIBUTION RESOLUTIONS THEREON	31
CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE REPORT	33
CONSOLIDATED SUSTAINABILITY STATEMENT in accordance with Legislative Decree No. 125/2024.	65
EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF THE BASICNET GROUP AT DECEMBER 31, 2025	162
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS OF BASICNET S.P.A. AT DECEMBER 31, 2025	239

CORPORATE BOARDS

BOARD OF DIRECTORS

Marco Daniele Boglione	Chairperson
Daniela Ovazza	Vice-Chairperson
	Remuneration Committee
Alessandro Boglione	Chief Executive Officer
Lorenzo Boglione	Chief Executive Officer
Maria Boglione	Director
Veerle Bouckaert	Executive Director
Piera Braja	Independent Director
	Remuneration Committee
	Chairperson of the Control and Risks and Related Parties Committee
Paola Bruschi	Executive Director
Francesco Calvo	Independent Director
	Remuneration Committee
	Control and Risks and Related Parties Committee
Marco Enrico	Executive Director
Cristiano Fiorio	Independent Director
	Control and Risks and Related Parties Committee
Monica Gamberoni	Executive Director
Carlo Pavesio	Chairperson of the Remuneration Committee
Federico Trono	Executive Director

BOARD OF STATUTORY AUDITORS

Ugo Palumbo	Chairperson
Gianna Luzzati	Statutory Auditor
Alberto Pession	Statutory Auditor
Simonetta Mattei	Alternate Auditor
Riccardo Garbagnati	Alternate Auditor

INDEPENDENT AUDIT FIRM

EY S.p.A.

"We bring together a large number of entrepreneurs across the world for a common goal. We manage all the critical data along the supply chain. We earn service commissions for approx. onethird of the added value generated by the entire process, capitalising all the enhanced value of the trademarks from the development of sales. We achieve this through continually sourcing state-of-the-art software technologies and peerless internet integration to manage all the processes of our business".

Marco Boglione, 1999

Dear Shareholders,

2025 was a year of significant strategic development for the Group, marked by corporate transactions which redefine its scope and strengthen its competitive positioning. Furthering its vision focused on sustainable growth and brand enhancement, the Group has consolidated its multi-brand model, expanding the portfolio with strong heritage brands such as Woolrich® and Sundek® and strengthening its direct presence on the European markets.

The Group reports for 2025 aggregate sales of Group brands products by the global Network of Euro 1.2 billion - growth of 4%, as follows:

− commercial licensees and direct sales: Euro 907.7 million (Euro 864.7 million in 2024, +5.0%).
− productive licensees sales of Euro 318.0 million (Euro 313.8 million in 2024, 1.4%).

Commercial licensees and direct sales grew in Europe (+10.4%), which accounts for approximately 80.6% of aggregate sales and in which the development projects are concentrated, while reducing in the Middle East and Africa (-7.4%), in the Americas (-29.4%) and in Asia and Oceania (-2.8%);

For a better representation of the operating performance, the FY 2025 results are presented below both on a reported basis and on a pro-forma basis excluding the non-recurring items recognised in the year:

(Euro thousands)	2025 reported	Extraordinary non-recurring charges	Non recurring charges related to M&A's	Like-for-like scope excluding M&A transactions	2025 Pro-forma	2024 reported
Consolidated revenues	415,749			7,559	408,191	409,160
EBITDA	29,320	3,093	21,490	178	54,081	61,070
EBIT	5,972	3,093	21,490	1,230	31,785	42,143
EBT	738	6,093	21,490	2,184	30,505	36,715

Specifically:

consolidated revenues of Euro 415.8 million (Euro 409.2 million in 2024, +1.6%), include:

− royalties from commercial and productive licensees: Euro 66.4 million (Euro 60.9 million in 2024, +9.1%);
− direct sales: Euro 348.3 million, benefiting from the contribution of Woolrich Europe S.p.A. sales for the month of December, amounting to Euro 7.5 million (Euro 346.8 million in 2024, +0.4%);

Pro-forma EBITDA of Euro 54.1 million (Euro 61.1 million in 2024) reflects the stepping up of investments in sponsorships, communication and human resources, supporting the Group's brand development and enhancement initiatives. Reported EBITDA of Euro 29.3 million includes non-recurring components related to the restructuring of certain commercial relationships and the settlement of disputes (approximately Euro 3.1 million), in addition to the effects of the M&A's finalised in 2025 (approximately Euro 21.5 million).

Pro-forma EBIT of Euro 31.8 million (Euro 42.1 million in 2024), calculated net of higher amortisation and depreciation and rights-of-use related to the acquisitions finalised in December (Euro 1.2 million) and the above non-recurring items. Reported EBIT amounted to Euro 6.0 million.

Pro-forma EBT of Euro 30.5 million compares to Euro 36.7 million in the previous year. The reported EBT of Euro 0.7 million includes additional non-recurring charges related to the management of equity investments of Euro 3 million and the financial management result of the newly-acquired Woolrich.

the pro-forma Net Profit was Euro 20.0 million, decreasing 20.7% from Euro 25.3 million in the previous year. Net of income taxes, the reported Group Result was a loss of Euro 7.7 million.

The net financial position with banks was a debt of Euro 74.4 million, an improvement on Euro 90.8 million at December 31, 2024, mainly due to the sale of the stake in K-Way S.p.A., whose benefits were partly absorbed by the financial debt taken on by the Group at the end of December following the acquisition of the investments in Woolrich Europe S.p.A. and Sundek S.p.A.; net financial position, including the rights-of-use, is Euro 191.0 million (Euro 142.0 million at December 31, 2024). The increase stems from the inclusion of the payables for store leases related to the newly-acquired brands (37 Woolrich stores® and 34 Sundek stores®). Dividends of Euro 7.4 million were distributed in 2025 and treasury shares acquired for Euro 14.4 million.

The Parent Company reported a net profit of Euro 126.3 million (Euro 8.0 million in 2024), which benefitted from the sale of 40% of the holding in K-Way S.p.A. for Euro 140.1 million.

In addition to the Corporate Governance and Ownership Structure Report, this file contains the Consolidated Sustainability Statement pursuant to Legislative Decree No. 125 of September 6, 2024.

In relation to the "alternative performance indicators", as defined by CESR/05-178b recommendation and Consob Communication DEM/6064293 of July 28, 2006, we provide below a definition of the indicators used in the present Directors' Report, as well as their reconciliation with the financial statement items:

Commercial licensees or licensees	independent business owners, granted licenses to distribute Group brands products in their respective regions.
Productive licensees or sourcing centers	third-party firms to the Group. Their function is to manufacture and market products and are located in various countries worldwide, depending on what type of goods they produce.
Commercial licensees and direct aggregate sales	sales by commercial licensees, recognised by the BasicNet Group to the royalties account and the sales by the Group company license holders.
Productive licensees aggregate sales	sales by productive licensees, recognised by the BasicNet Group to the "royalties and sourcing commissions" account of the income statement.
Brands aggregate sales	is the sum of "Commercial licensees and direct aggregate sales" and "Aggregate sales of productive licensees"
Consolidated Revenues	the sum of royalties, sourcing commissions and sales of the BasicNet Group companies and real estate revenues from third parties.
EBITDA	"operating result" before "amortisation and depreciation".
EBIT	"operating result".
Contribution margin on direct sales	"gross margin".
Debt/equity ratio	this is an indicator of the financial structure of the balance sheet and is calculated as the ratio of financial debt to shareholders' equity.
Net financial position	total of current and medium/long-term financial payables, less cash and cash equivalents and other current financial assets.
Net financial position with banks	the Net financial position, net of payables for rights-of-use and payables for the acquisition of company shares.
Earnings per share	calculated as required by IFRS on the basis of the weighted average number of shares in circulation in the year.
Indicators and Pro-forma results	reported net of a number of extraordinary and non-recurring costs, including the extraordinary effects of M&A transactions finalised in 2025.

THE GROUP AND ITS ACTIVITIES

The BasicNet Group operates in the apparel, footwear and accessories sector through the brands Kappa®, Robe di Kappa®, K-Way®, Superga®, Briko®, Jesus® Jeans, Sebago®, Woolrich® (from December 1, 2025) and Sundek® (from December 16, 2025).

Group activities involve driving brand enhancement and product distribution directly or through a global network of licensees. This business network is defined as the "Network". And from which the name BasicNet derives. The Network of licensees encompasses all key markets worldwide.

BasicNet S.p.A. is the parent company of the Group – with headquarters in Turin - listed on the Italian Stock Exchange.

STRENGTHS

The strengths of the Group are founded on the strategic priorities since its inception which encompass:

1. Brand positioning
1. The Business System
1. Web Integration

1. Brand positioning

The Basic Group brands form part of the informal and casual clothing sector, which has experienced significant growth since the 1960's and continues to develop with the "liberalisation" of clothing trends.

Kappa® is a global sportswear brand, recognised for its iconic "Omini" (body profile) logo, which began as an extension of the casual Robe di Kappa® brand. Kappa® today continues to embrace the two aspects of its identity: on the one hand, its sporty and technical side which established the brand in the world of performance, and on the other the authentic, informal and contemporary spirit inherited from Robe di Kappa®.

Superga® is an Italian leisure footwear brand, founded in Turin in 1911 and focused on the technological innovation of vulcanised rubber. This technology was employed to create a range that, beginning with various sports such as tennis, skiing and basketball, over time has extended into different areas of use. The 2750 symbolises this style, an iconic silhouette created in 1925 that became known for its classic elegance and worn by celebrities across the world. Superga® today is a benchmark for lifestyle footwear, in which heritage, functionality and Italian design coexist in versatile products for everyday life.

K-Way® is the rainwear brand par excellence, the product of the insightful idea to create a lightweight, waterproof and easily-foldable jacket. Starting from this iconic idea, the brand has developed over time a range that extends from technical outerwear to lifestyle garments, including various interpretations of rainwear, while also establishing itself in the world of sports. K-Way® is now a global benchmark, where functionality, innovation and style coexist in a practical, colourful and timeless language.

Briko® is the Italian brand of cutting edge technical sporting products, in particular for cycling, skiing and running: eyewear, helmets, masks, accessories, underwear and clothing for professionals and enthusiasts. Briko®'s mission is to use the explosive energy of the brand to create iconically designed products for athletes and sportspeople requiring performance and safety without compromises.

Sebago® is a footwear and apparel brand founded in 1946 in Maine, on the East Coast of the United States, deeply inspired by the nature, nautical culture and outdoor lifestyle of America. Since its origins, the brand has stood out for its functional and timeless approach to design, based on craftsmanship, quality materials and authenticity. Sebago® is today an icon of classic and contemporary style, combining American heritage, understated elegance and an adventurous spirit in its footwear, apparel and accessories collections designed for everyday life, the city and the outdoors.

is the jeans brand, created in 1971 by the youthful Maurizio Vitale and Oliviero Toscani.

Woolrich® is an American outdoor clothing and lifestyle brand with strong roots in nature and the outdoors. Created to meet the demands of workers, explorers and communities across the North American continent, the brand has built its identity around functionality, durability and quality materials. Woolrich® today draws on its outdoor heritage to create contemporary lifestyle apparel collections, combining deeply-ingrained know-how, innovation and essential design to tackle the outdoors and everyday life with style and reliability.

Sundek® is an iconic beachwear and lifestyle brand, founded in California in the late 1950s and closely interwoven with surf culture. The brand has always projected its innovative approach to the product and an instantly recognisable look, of which the Rainbow Boardshorts are the most iconic expression. Sundek® today embodies an authentic, sun-loving lifestyle rooted in the free spirit of surfing.

2. The Business System

The BasicNet Group has developed around a "network" business model, targeting licensees as the ideal partner for the development, distribution and sourcing of its products globally, choosing partners which act not only as a product supplier, but as an integrated supplier of services, i.e. a business development partner.

Innovative, flexible and modular, the Business System of BasicNet has enabled the Group to grow quickly, although maintaining a lean and agile structure: a large enterprise centred around many businesses connected among themselves and with the parent company on a fully integrated IT Network platform designed to maximise information flows through real time sharing.

The Business System was drawn up and structured to develop both internal lines (new licensees and new markets) and external lines (new brands developed or acquired and new business lines).

The functioning of the Business System is very simple. The parent company BasicNet S.p.A. undertakes the "Powered by" activities serving the companies owning the individual brands.

These "Powered by" activities mainly include:

Information Technology, i.e. the creation of new software for the online management of all supply chain processes;
co-ordination of production and commercial activity information flows on the licensees' Network;
strategic finance.

The Brand owning companies undertake:

research and development activities;
global marketing.

The brand-owning companies in the directly managed territories and the licensees, according to territory or goods category, distribute products to retailers, carry out local marketing, regional logistics and working capital funding.

The production flows of the Group brand finished products which are distributed by the commercial licensee businesses in their territories are awarded to the licensee businesses (the Sourcing Centers), managed through the Business System platform which connects the production sources with the product distribution companies.

As part of its Business System development, the Group has also established a direct to customer sales system called plug@sell®, developed in Italy, Switzerland, Spain, France, Ireland, the United Kingdom and Portugal. The model comprises a web-based integrated sales management system, with a platform which simply manages all daily activities at the store in real time, from orders to stock management, to accounting and training of staff (pre-opening and ongoing).

As part of the Retail project, the various brands have been developed around the three principal retail levels, through which the Group sells directly to the public in Europe:

Level I: Brands Stores located in city centres, high streets or shopping centres with specific franchising agreements;
Level II: Brand Outlets located in Outlet Villages;
Level III: Discount Stores located in "out-of-town" commercial or industrial parks.

The formats have been developed in order to ensure presence on a wide range of market segments.

3. Web Integration

The IT platform is one of the major strategic investments for the Group, with a high degree of focus in terms of staffing and centrality to Business System development.

This platform was designed and developed in a fully web integrated manner as the perfect communication tool between Network elements.

The Information Technology department is involved therefore in the design and rolling out of the applications which link the BasicNet Network companies together and externally.

The business model therefore centres on "e-processes" i.e. ".com" divisions - each of which with a production input and exchanging or negotiating with the other divisions, exclusively through the online platform.

GROUP STRUCTURE

The Basic Group comprises Italian and international operating companies within the following sectors:

the "clothing, footwear and accessories" sector;
"property management";
"investment management".

The clothing, footwear and accessories sector includes all Group entities with the exception of BasicVillage S.p.A.. The sector encompasses all activities directly related to the development of the brands owned and the distribution of related products, both directly and by way of a global network of licensees. Specifically:

the strategic and "Powered by" activities described above and developed by BasicNet S.p.A. and by the Group Brand owning companies;
the granting of the intellectual property rights of the BasicNet Group to the various licensee producers and distributors, as well as the administration of the contracts and management of related cash flows;
the direct use and development of the intellectual property rights and of the products of all brands of the BasicNet Group for Italy, of Kappa in France and Spain, of K-Way in France, Spain, Switzerland, Ireland and the United Kingdom, of Sebago in Spain, Portugal and France, of Woolrich across the European market, and of Sundek worldwide;
the operational management of major sponsorship and merchandising contracts, some of which with international visibility, benefitting also the Network;
the management of the Group brand sales points within the plug@sell project in Italy and of the direct sales points in France, Spain, Portugal, Switzerland, Ireland and the United Kingdom.

Property management is carried out by Basic Village S.p.A., which owns commercial and residential properties of more than 30,000 sq m, including:

the former Maglificio Calzificio Torinese production site. Restructured and preserved in 1998, the facilities house the headquarters of BasicNet Group, called BasicVillage, and numerous other Group and third party activities;
the property adjacent to BasicVillage in Via Padova 78, Turin, partly leased to third parties and partly intended for Group operations;
an industrial building covering approx. 4,000 sq m in Milan, Via dell'Aprica 12, close to the Scalo Farini, acquired in 2020 and inaugurated in 2022;
a property in Turin (Strada della Cebrosa, 106), leased to the company BasicItalia and adjacent land acquired during the year;
of the property located in Turin, Corso Regio Parco, 33;

The BasicVillage project came about in response to three basic human needs, i.e. a home, a job, and free time.

Investment management concerns the development of future strategic investments for the Group, with the aim of providing a flexible but structured tool that also allows for industrial - in addition to financial - synergies.

The company was established during the year for the purpose of acquiring and managing investments, operating as BasicNet's vehicle for minority investments ancillary to Group activities.

BUSINESS TARGETS

The Group objective is to extend its global leadership position through the strength of its brands.

The Group project centres on:

the consolidation and expansion of the brands in areas with a pre-existing presence, supporting the growth of licensees through the Business System;

extending the territorial coverage of the brands, through finding new qualified licensees particularly for more recently acquired brands;
the development of the plug@sell® shops, allowing licensees to improve market presence and to efficiently target end-consumers;
the search for fresh investment and development opportunities on new markets;
BasicNet's "powered by" activities.

The BasicNet Group structure at December 31, 2025 is presented below:

(***) Having operating branch in Austria

2025 SIGNIFICANT EVENTS

K-Way transaction

On February 28, 2025, after receiving clearance from the European Anti-trust Authority, Permira completed the undertaking of a stake in K-Way S.p.A..

K-Way S.p.A. is now indirectly held approx. 60% by BasicNet and for approx. 40% by Permira through its Permira Growth Opportunities II fund, and for a minimum stake lower than 0.5% held by a number of key managers of K-Way S.p.A.

Following this transaction, the net assets of the Group and the available liquidity increased by Euro 170 million, equal to the total amount contributed by the new shareholders. The cash received enabled the early settlement of the mortgage loan taken out in previous years by BasicVillage to support its real estate assets and the full repayment of the medium to long-term loans of K-Way S.p.A. and its subsidiaries.

Luisa Via Roma

In May, the newly-established company BasicInvestments S.r.l. invested Euro 3 million in Florence S.r.l., a vehicle held by the "Fondo Style Capital" investment fund and the majority shareholder of Luisa Via Roma S.p.A., the company that owns the marketplace of the same name. In particular, BasicInvestments S.r.l. contributed to an investment in Florence S.r.l. to support the latter's subscription to a share capital increase in Luisa Via Roma S.p.A. The Company has therefore undertaken an approximate 7.9% stake in Florence, implicitly corresponding to 3.3% of the share capital of Luisa Via Roma S.p.A.

Approximately two months from the aforementioned investment and amid market rumours concerning certain difficulties of Luisa Via Roma S.p.A, the Company became aware that the latter had requested access to a voluntary arrangement procedure ("Composizione negoziata della crisi" or "CNC"). Following the news of the initiation of the CNC procedure, in October the exit of "Fondo Style Capital" from the investment was announced, following the sale of its entire majority stake in Florence S.r.l. to the company currently held by the Chief Executive Officer of Luisa Via Roma S.p.A. for a symbolic price.

The Board of Directors of BasicInvestments S.r.l. has taken, with the support of the BasicNet Group, all necessary initiatives, including through the courts, to protect the Company's assets.

Acquisition of Woolrich

On December 1, 2025, the BasicNet Group acquired the rights to the Woolrich® brand for Europe and 100% of Woolrich Europe S.p.A., the company that manages its distribution and retail, for consideration of Euro 40 million, partially settled for Euro 12 million through the transfer to the sellers of 1,200,000 treasury shares of BasicNet S.p.A. valued at Euro 10.0 each. Provision has also been made for the selling party to receive a potential variable deferred consideration, preliminarily estimated at Euro 2.0 million.

The acquisition was completed through TOW S.p.A. - a wholly-owned subsidiary of BasicNet - which therefore holds the entire share capital of Woolrich Europe S.p.A. The same TOW has also purchased the rights to the Woolrich® brand for Europe from John Rich & Sons Inv. Hold. Co., for a cash consideration of Euro 11.55 million.

Unicredit S.p.A., as mandated lead arranger and sole lender, has made available two medium to long-term credit lines, respectively for the benefit of BasicNet and TOW S.p.A., totalling Euro 58 million and a revolving line, for the benefit of Woolrich Europe S.p.A., for an additional maximum amount of Euro 20 million. The credit lines are backed by personal guarantees issued by BasicNet and collateral on the subsidiaries TOW S.p.A. and Woolrich Europe S.p.A..

Founded in 1830 by John Rich in Pennsylvania, Woolrich is one of America's oldest manufacturers of woollen fabrics and outdoor apparel. The company was established to provide durable, functional garments for hunters, loggers and railroad workers, protecting them from the harsh winters of the northeastern United States. In 1850, Woolrich introduced the celebrated Buffalo Check pattern, the distinctive red-and-black check that has become an icon of rustic, authentic style. In 1940, in response to the needs of workers engaged in the construction of oil pipelines in Alaska, the Arctic Parka was created, designed to withstand extreme temperatures and destined to become an iconic garment in winter clothing worldwide.

Acquisition of Sundek

On December 16, 2025, the BasicNet Group acquired 100% of the share capital of the company Kickoff S.p.A. (subsequently renamed Sundek S.p.A.), owner of the Sundek brand, for consideration of Euro 10 million, fully settled by the transfer to the seller of 1,385,965 treasury shares of BasicNet S.p.A., already in portfolio and valued, according to the agreement, at the rounded price of Euro 7.2152 per share. The seller may also receive an additional variable and contingent payment by way of earn-out, payable at BasicNet's sole discretion through the delivery of treasury shares or in cash, subject to the achievement of certain global revenue levels of the Brand over the 2026-29 four-year period.

BasicNet also took over from the seller the commitments to Monte dei Paschi di Siena and Intesa SanPaolo arising from existing loan agreements. The renegotiation of the existing financial debt with the same credit institutions is currently underway and is expected to be completed by the first half of 2026, in order to align the conditions and maturity with the Group standards.

Established in San Francisco in 1958, Sundek® was among the first brands to define the surfwear category and was central to the emerging California surf culture. More than just technical apparel, it embodied a lifestyle: freedom, counterculture, music, a rebel spirit and a sense of community. In the 1960s, the brand expanded from the California coast to Hawaii and then along the U.S. east coast, accompanying – and often anticipating – the evolution of surfing as a cultural phenomenon. The year 1972 marked an iconic moment with the introduction of Rainbow Boardshorts: quick-dry nylon, seamless closures and with the unmistakable rainbow detail on the back. It was a garment that transcended beachwear to become a defining symbol of identity, of style and of belonging to surf culture.

Acquisition of Sebago France

As part of the project to strengthen the European market, centralise the management of the e-commerce channel, and develop direct retail, on December 18, the company Sebago France S.a.s was fully acquired. It was already a licensee of the Sebago® brand for the French market and operated stores in Paris St. Croix, Lyon, Paris Temple, Biarritz and Toulouse. The initial consideration amounts to Euro 5.9 million, of which 4.2 is settled at closing and the remaining part is subject to full adjustment in February 2026. An additional earn-out, with a maximum amount of Euro 1.0 million, may be awarded based on the performance of the Brand on the French market in FY 2026.

Liquidation of Basic Properties America Inc.

At the end of 2025, the Board of Directors decided to initiate the liquidation of the subsidiary Basic Properties America Inc., completing the corporate reorganisation process of the Group that began in 2021. As part of the process, it is planned to reassign the license agreements for the Sebago, Kappa and Superga brands for the American markets currently managed by the company. The liquidation is expected to be completed by the end of 2026.

REGIONAL COMMERCIAL PERFORMANCES

Commercial operations focused mainly on the renewal of expiring licensing contracts. New agreements were signed for the Kappa® brand in North America, the Caribbean, Mexico, Uruguay, and Azerbaijan, for the Superga® brand in North America and for the Sebago® brand in Singapore.

The main communication initiatives in the period concerned:

Kappa® supported the Peugeot TotalEnergies team in the third season of the FIA World Endurance Championship (WEC), with an extended agreement for the next two years. In parallel, for the next four seasons it will be the official technical partner of the Italian Triathlon Federation - along with Briko® - accompanying athletes on their journey to the 2028 Los Angeles Olympic Games.

In football, the brand renewed its commitment as a technical sponsor in Serie A with ACF Fiorentina, Genoa CFC and in Serie B with Spezia Calcio, while consolidating its presence in major European leagues and launching a new partnership in Portugal with Estoril Praia. Three official jerseys were also created for the Tunisian Football Federation for the 2025 Africa Cup of Nations.

In Naples, Kappa® was the technical sponsor of the first edition of the Red Bull King d'o Rione, a tournament that combines football and urban culture.

During the year, Kappa® Authentic, a fashion spin-off line of the brand, was relaunched.

On the creative front, several capsule collections have been presented: one with Acne Studios and one with 433, a major global digital community dedicated to football. Kappa® Authentic and Campari Soda have also launched the second edition of the "Senza Etichette" capsule, confirming the dialogue between sportswear and lifestyle.

The collaboration with GO fit, a leading Spanish chain of sports centres, also continued and was extended to the Italian market with the opening of a new centre in Turin, whose staff is kitted out in Kappa® apparel.

In fashion and retail, Kappa® and ACF Fiorentina collaborated with LuisaViaRoma to launch the 2024-2025 fourth jersey, while with AS Monaco a partnership was developed with Parisian brand Koché. We also highlight the capsule with Pretty Green, a brand founded by Liam Gallagher, and the FC McDonald's capsule collection, accompanied by a uniform dedicated to the staff.

Finally, the brand celebrated the 25th anniversary of the Kombat™ with the launch of the new Kombat™ XXV, a technological evolution of the iconic model. The project involved 19 football teams and, on the lifestyle side, Slam Jam. The face of the campaign was Djibril Cissé, a former Kappa® testimonial in the early 2000s.

K-Way®. The brand sponsored during the year the "1000 Miglia", the Terraforma cultural festival and continued its collaboration with the nonprofit association Coral Gardeners, confirming its focus on sports, cultural and environmental initiatives. The agreement with the Italian Golf Federation, accompanied by the launch of a new line of technical apparel, also marks K-Way®'s official entry into the golfing world.

Among the main innovations in 2025 was the agreement with Marcolin for the debut of the first K-Way® eyewear collection. On the fashion front, capsule collections have been developed with Palace and Venice M'Art.

The collaboration with Comme des Garçons continued, reaching the second drop, while for the FW25 season K-Way® and Soeur renewed their partnership with a unisex capsule collection. On the runway at the February Milan Fashion Week, the capsule collection of bags created with CAHU was also presented.

Particular attention was focused on the kids segment, with a new capsule together with the French brand Tartine et Chocolat and a collection developed with Il Gufo.

K-Way® has launched a new advertising campaign featuring Global Brand Ambassador Shownu, South Korean Gen Z icon.

The year 2025 also coincided with the brand's 60th anniversary celebration, culminating in the traveling exhibition "In Y/Our Life - The Hidden Side of Everyday Things". After stops in Milan and London, the exhibition ended in Paris at Atelier Richelieu, the brand's hometown. A commemorative volume containing archival materials and contributions dedicated to the history of the brand was also published to mark the anniversary.

Superga® participated at the Paris Fashion Week with a temporary showroom dedicated to the new rubber line. It was also present at Pitti Uomo with an exhibition space at the Fortezza da Basso, focused on celebrating the centenary of the iconic 2750 model.

Partnerships continued with other brands, including Armor-Lux, a historic Breton brand, with which a capsule collection of footwear and clothing was developed.

In the kids segment, a new collaboration Superga® × Tiny Cottons has been launched, which combines the distinctive elements of the two brands in a capsule dedicated to the little ones.

Superga® was also an official partner of Orticola di Lombardia, presenting its Gomma collection for the occasion.

Sebago® presented the new collection at Paris Fashion Week and Pitti Uomo, consolidating its presence in the industry's major international events.

The first edition of the Sebago Rowing Cup, not just a sports competition but a celebration of the brand's preppy spirit and heritage, was held in Turin. The initiative opened with an event at the Sebago store®, and then continued the next day with a regatta on the Po River.

The Campsides Club also launched a new stage at Baita Gimont, high in the mountains, with an installation inspired by the Campsides line and focusing on the outdoor dimension.

On the partnership front, Sebago® has initiated a collaboration with Essentiel Antwerp and developed a capsule collection with Weekend Max Mara®, also supporting the brand in a second drop of the collection.

A line of personal care products was also launched together with St Johns.

Finally, the third edition of the Sebago YearBook publishing project was presented, an initiative that chronicles the brand's universe and values through dedicated content.

Briko® was once again the technical sponsor of the VF Group Bardiani - CSF Faizanè team at the Giro d'Italia, the 47th Kinder Joy of Moving Grand Prix for the very young, and the Title Sponsor of the Granfondo Internazionale. It also announced the launch of a collaboration as the official technical partner of the Italian Triathlon Federation and participated in the Prowinter and Sport Achat fairs.

Group brand sales points

As of December 31, 2025, the Kappa® and Robe di Kappa® monobrand stores and "shop in shops" open worldwide number 1,098, while K-Way® monobrand stores and "shop in shops" number 133. There are 104 Superga® monobrand stores and shop in shops and 48 Sebago® monobrand stores and "shop in shops"®, alongside 37 Woolrich® stores, including in December the opening of the first Woolrich store in Turin, in Via Lagrange, 3, in the city's historic centre, and 34 Sundek® brand stores - brands which have enriched the Basic Group's brand portfolio following their acquisition - for a total of 1,454 stores.

2025 FINANCIAL PERFORMANCE OVERVIEW

THE GROUP

BasicNet Group Key Financial Highlights

For easier reference to the comments on the operating performance for the year, the following table presents the highlights of the income statement and related results, both on a reported basis and on a pro-forma basis excluding the non-recurring components recognised in the year.

(Euro thousands)	FY 2025	FY 2025 Pro-forma	FY 2024	2024 Changes Vs Pro forma	%
Brand aggregate sales *	1,233,259	1,225,731	1,178,493	47,239	4.0%
Royalties and sourcing commissions	66,431	66,589	60,882	5,707	9.4%
Consolidated direct sales	348,282	340,882	346,802	(5,921)	(1.7%)
Contribution margin on direct sales	163,260	158,835	152,657	6,178	4.0%
EBITDA **	29,320	54,088	61,070	(6,981)	(11.4%)
EBIT **	5,972	31,792	42,143	(10,351)	(24.6%)
Group Net Result	(7,711)	20,032	25,264	(5,232)	(20.7%)
Basic earnings per ordinary share**	(0.1661)	0.4296	0.5354	(0.1058)	(19.8%)
Diluted earnings per ordinary share**	(0.1654)	0.4316	0.5354	(0.1038)	(19.4%)

* Data not audited

** For the definition of the indicators reference should be made to paragraph 5 of this Report

Commercial and financial analysis

The breakdown of sales and production revenues generated through the global Group licensees and direct sales at current exchange rates was as follows:

(Euro thousands)	FY 2025 Pro-forma	FY 2024	Changes
Brand aggregate sales*	Total	Total	Total	%
Commercial licensees and direct	907,720	864,719	43,000	5.0%
Productive Licensees (sourcing centers)	318,012	313,773	4,238	1.4%
Total	1,225,731	1,178,493	47,239	4.0%

* Data not audited

(Euro thousands)		FY 2025 Pro-forma	FY 2024		Changes
Group commercial license and direct aggregate sales*	Total	%	Total	%	Total	%
Europe	731,465	80.6%	662,704	76.6%	68,761	10.4%
The Americas	41,100	4.5%	58,210	6.7%	(17,109)	(29.4%)
Asia and Oceania	42,068	4.6%	43,282	5.0%	(1,214)	(2.8%)
Middle East and Africa	93,087	10.3%	100,524	11.6%	(7,438)	(7.4%)
Total	907,720	100.00%	864,719	100.0%	43,000	5.0%

The regional breakdown of commercial licensee aggregate sales was as follows:

* Data not audited

and of the productive licensees:

(Euro thousands)		FY 2025 Pro-forma		FY 2024	Changes
Group productive licensees aggregate sales*	Total	%	Total	%	Total	%
Europe	26,858	8.4%	26,068	8.3%	790	3.0%
The Americas	26,756	8.4	26,198	8.3%	558	2.1%
Asia and Oceania	259,655	81.6%	258,265	82.3%	1,390	0.5%
Middle East and Africa	4,744	1.5%	3,243	1.0%	1,501	46.3%
Total	318,012	100.00%	313,773	100.0%	4,238	1.4%

* Data not audited

Pro-forma commercial licensee and direct sales of approximately Euro 907.7 million were up 5.0% on Euro 864.7 million in the previous year.

Commercial licensees and direct sales grew in Europe (+10.4%), which accounts for approximately 80.6% of aggregate sales, while reducing in the Americas (-29.4%), in the Middle East and Africa (-7.4%) and in Asia and Oceania (-2.8%).

The pro-forma sales of the productive licensees (Sourcing Center), which were up 1.4%, are only made to commercial licensees or entities within the "Powered by BasicNet" scope. The production licenses issued to the Sourcing Centers, differing from those issued to the commercial licensees, do not have regional limitations, but are rather based on technical production and business competences. Product sales by the Sourcing Centers to commercial licensees are made in advance of those made by the latter to the end customer.

The pro-forma consolidated direct sales amounted to Euro 341.0 million, compared to Euro 346.8 million in 2024. Overall consolidated direct sales amounted to Euro 348.3 million, benefiting from the contribution of Woolrich sales for the month of December, amounting to Euro 7.5 million. Compared to the previous year, direct sales were up by 3.2% in Italy, by 7.1% in Spain and down by 5.8% in France. The retail channel posted doubledigit growth across nearly all sectors. Sales via e-commerce also grew significantly (+11.3%), as this is a sector in which the Group is focusing investment to consolidate development.

The contribution margin on pro-forma sales increased from Euro 152.7 million in 2024 to Euro 158.8 million in 2025 (+4%); the same value increased by 6.9%, benefiting from a more favourable sales channel mix, in addition to the gradual weakening of the US Dollar during the year. The margin in percentage terms increased from 44.0% in 2024 to 46.9%.

Royalties from commercial and productive licensees reflect the trend of the aggregate sales of licensees and amounted to Euro 66.6 million at pro-forma values and Euro 66.4 million at reported values, compared to Euro 60.9 million at December 31, 2024, +9.1%.

Other income of Euro 7.9 million, compared to Euro 17.6 million in 2024, which included the effect of income from the early termination of a multi-year agreement.

Sponsorship and media spend of Euro 47.3 million compares to Euro 43.6 million in the previous year. The increase from the prior year is mainly attributable to the increase in costs related to sponsorships of strategic importance to global brand development and to the marketing efforts, particularly in relation to the K-Way® brand.

Personnel costs rose from Euro 49.2 million in 2024 to Euro 58.5 million in 2025, an increase of approx. Euro 9.4 million, due mainly to the expansion of strategic areas of the Group, the strengthening of the K-Way S.p.A. structure and the opening of new points of sale. The average number of employees in 2025 was 1,230, compared to 1,092 in 2024.

The overhead costs, i.e. selling and general and administrative costs and royalties expenses increased from Euro 77.3 million in 2024 to Euro 102.4 million in 2025, also include extraordinary charges mainly related to M&A's for Euro 12.6 million.

Pro-forma EBITDA of Euro 54.1 million (Euro 61.1 million in 2024) reflects - as indicated above - the stepping up of investments in sponsorships, communication and human resources, supporting the Group's brand development and enhancement initiatives. Reported EBITDA of Euro 29.3 million includes non-recurring components related to the restructuring of certain commercial relationships and the settlement of disputes (approximately Euro 3.1 million), in addition to the effects of the M&A's finalised in 2025 (approximately Euro 21.5 million).

The balance of consolidated net financial charges/income, including exchange gains and losses, shows a negative balance of Euro 3.3 million, compared to Euro 5.4 million negative in the same period of the previous year, mainly due to the lower average debt of the Group during the year.

The pro-forma Net Profit was Euro 20.0 million, decreasing 20.7% from Euro 25.3 million in the previous year. Net of income taxes, the reported Group Result was a loss of Euro 7.7 million.

Segment information

The Financial Highlights by Group segment were as follows:

the "Clothing, footwear and accessories" segment reports net royalties and sourcing commissions of Euro 66.4 million in 2025, compared to Euro 60.9 million in the previous year. Direct sales are also reported of Euro 348.3 million, compared to sales in the previous year of Euro 346.8 million. The contribution margin on sales was Euro 163.3 million, compared to Euro 152.7 million in 2024. The revenue margin was 47% (44% in 2024). Personnel costs increased on the same period of the previous year, mainly due to the development the Group's strategic areas and of direct retail operations. The segment reports a loss of Euro 8.5 million due to the extraordinary and non-recurring charges from the transaction outlined at Note 5, compared to a profit of Euro 25.7 million in the same period of the previous year.

the "Property" segment reports an operating profit of Euro 979 thousand, compared to Euro 676 thousand in 2024.
the "Investments" segment reports a loss of Euro 2.3 million. Regarding the result, please refer to the "Significant Events of 2025" section. The financial statements by segment are reported at Note 7 of the Notes to the consolidated financial statements.

Balance sheet overview

The changes in the balance sheet are reported below:

(Euro thousands)	December 31, 2025	December 31, 2024	Changes
Property	38,701	39,781	(1,079)
Brands	98,223	59,174	39,049
Non-current assets	232,329	81,524	155,454
Rights-of-use	100,191	41,871	58,320
Current assets	380,733	245,356	135,377
Total assets	850,176	467,706	387,120
Group shareholders' equity	322,144	170,346	155,375
Non-current liabilities	216,477	95,791	130,009
Current liabilities	311,555	201,569	101,738
Total liabilities and shareholders' equity	850,176	467,706	387,120

With regard to the change in non-current assets, amortisation and depreciation increased by Euro 23.3 million during the year. Brands increased as a result of the acquisitions of Woolrich® for the European market (Euro 11.6 million) and Sundek® (Euro 27.5 million), the capitalisation of costs incurred for the registration of trademarks in new countries and for renewals and extensions, net of amortisation for the period. Investments were also made for the development of computer programmes (Euro 3.9 million).

Group shareholders' equity went from Euro 170.3 million in 2024 to Euro 322.1 million in 2025

Financial position

(Euro thousands)	December 31, 2025	December 31, 2024	Changes
Net financial position with banks – Short-term	3,821	(62,585)	(66,405)
Financial payables – Medium-term	(78,056)	(27,922)	(50,134)
Finance leases	(177)	(284)	106
Net financial position with banks	(74,413)	(90,791)	16,378
Payables for purchase of equity investments beyond one year	(13,976)	(8,081)	(5,894)
Payables for rights-of-use	(102,597)	(43,080)	(59,517)
Total net financial position	(190,985)	(141,952)	(49,033)
Net Debt/Equity ratio (Net financial position/Shareholders' equity)	0.59	0.83	(0.24)

Net financial position with banks is Euro -74.4 million, improving compared to Euro -90.8 million at December 31, 2024, mainly due to the sale of the investment in K-Way S.p.A, whose benefits were partly absorbed by the financial debt taken on by the Group at the end of December following the acquisition of the investments in Woolrich Europe S.p.A. and Sundek S.p.A.; net financial position: Euro -191.0 million (Euro -142.0 million at December 31, 2024). Dividends of Euro 7.4 million were distributed in 2025 and treasury shares acquired for Euro 14.4 million.

Earnout payables include the improved estimate of variable pricing components due to the previous shareholders of the companies acquired, the amount of which is to be determined based on the performance levels specified in the respective agreements. At the end of 2025, total debt is estimated at Euro 14 million.

Right-of-use payables rose by Euro 60.9 million compared to December 31, 2024. The increase stems from the inclusion of the store leases related to the newly-acquired brands (37 Woolrich stores® and 34 Sundek stores®).

THE PARENT COMPANY

BasicNet S.p.A. Key Financial Highlights

The Parent Company condensed income statement for 2025 compared to the previous year is reported below:

(Euro thousands)	FY 2025	FY 2024	Changes	%
Services to group companies	14,879	13,856	1,023	7.4%
Royalties and sourcing commissions	6,436	8,786	(2,350)	(26.7%)
EBITDA *	(11,150)	1,213	(12,363)	N.A.
EBIT *	(15,403)	(2,808)	(12,595)	(448.5%)
Dividends from subsidiaries	-	10,568	(10,568)	(100.0%)
Investment income (charges)	137,003	-	137,003	100.0%
Net Profit of the year	126,280	7,959	118,321	N.A.

* For the definition of the indicators reference should be made to paragraph 5 of this Report

The operating highlights of the parent company follow:

Royalties and sourcing commissions amounted to Euro 6.4 million, decreasing from the previous year due to the reorganisation of contractual and operational sourcing centre relationships between BasicNet and its subsidiaries.

The EBIT, inclusive of extraordinary and non-recurring charges related to corporate transactions completed during the year, amounts to a loss of Euro 15.4 million (loss of Euro 2.8 million in 2024), following amortisation and depreciation of tangible and intangible assets for Euro 2.9 million and depreciation of rights-of-use for Euro 1.3 million.

Investment income relates to a gain on the sale of the 40% stake in K-Way S.p.A. for Euro 140 million, to the waiving of the Euro 3 million receivable from Basic Investment S.r.l. with a consequent increase in the value of the investment, which was subsequently written down for the same amount, and to the sale of the investment in Fashion S.r.l., recognised at a value of Euro 195 thousand and sold for Euro 100 thousand, for a loss of Euro 96 thousand.

Net profit was approx. Euro 126.3 million (Euro 8.0 million in 2024) after income taxes of Euro 380 thousand.

Balance sheet overview

(Euro thousands)	December 31, 2025	December 31, 2024	Changes
Non-current assets	8,108	7,159	949
Rights-of-use	1,069	2,401	(1,332)
Equity invest. & other financial assets	192,914	138,322	54,591
Current assets	251,738	52,189	199,549
Total assets	453,828	200,072	253,757
Shareholders' Equity	268,455	141,478	126,977
Non-current liabilities	71,090	6,165	64,925
Current liabilities	114,283	52,429	61,855
Total liabilities and shareholders' equity	453,828	200,072	253,757

Non-current assets include investments in the year mainly for software development of Euro 3.3 million and EDP, fixtures and fittings and other assets of Euro 449 thousand. The value of tangible and intangible assets are recorded net of amortisation and depreciation for the year of Euro 2.9 million.

Rights-of-use include the value of the property lease contracts for the company's offices, owned by the subsidiary BasicVillage S.p.A., for future years, originally recognised in 2019 in application of IFRS 16.

Current assets increased due to the increase in financial receivables originating from loans and advances to meet the cash needs of subsidiaries within the scope of central treasury management and to the purchase of short-term securities for Euro 40 million. Equity investments and other financial assets increased due to the purchase of securities for Euro 50 million and to security deposits.

Shareholders' Equity at December 31, 2025 was approx. Euro 268.5 million (Euro 141.5 million in 2024), following the distribution in 2025 of dividends for Euro 7.4 million and the acquisition of treasury shares for Euro 14.4 million.

Financial position

(Euro thousands)	December 31, 2025	December 31, 2024	Changes
Net financial position – Short-term	(76,199)	(34,690)	(41,509)
Financial payables – Medium-term	(68,588)	(1,031)	(67,557)
Finance leases	(154)	(283)	129
Net financial position with banks	(144,941)	(36,004)	(108,937)
Group financial receivables/(payables)	78,259	20,285	57,974
Payables for rights-of-use	(1,100)	(2,498)	1,399
Financial position with the Group	77,159	17,787	59,373
Total net financial position	(67,782)	(18,218)	(49,564)

The net financial position of net debt of Euro 67.8 million compares to Euro 18.2 million in 2024. Net financial receivables of the Group include the amount of the interest-bearing vendor loan of Euro 65 million granted to K-Way within the scope of Permira participating in share capital.

RECONCILIATION BETWEEN CONSOLIDATED NET PROFIT AND PARENT COMPANY NET PROFIT

The reconciliation at December 31, 2025 between the Parent Company net equity and result and the consolidated net equity and result is reported below.

(Euro thousands)	Net Profit	Net Equity
Financial statements of BasicNet S.p.A.	126,280	268,455
Accounting for equity and results of consolidated companies	3,107	759,893
Derecognition of the value of consolidated equity investments	(137,098)	(738,110)
Consolidation adjustments	-	31,906
Group consolidated financial statements	(7,711)	322,144

THE BASICNET SHARE PRICE

The Share Capital, fully subscribed and paid-in, amounts to Euro 31,716,673.04 and comprises 54,000,000 ordinary shares, without nominal value and listed on the Euronext Milan (EXM).

(in Euro)	December 31, 2025	December 31, 2024

Earnings/(loss) per share	(0.1665)	0.5354
Dividend per share (1)	0.16	0.16
Pay-out ratio (1) (2)	38.1%	29.7%
Dividend Yield (1) (3)	2.1%	2.0%
Price at year-end	7.48	7.86
Maximum price in year	8.94	8.14
Minimum price in year	6.35	2.84
Stock market capitalisation (in thousands of Euro)	403,920	424.440
Total number of shares	54,000,000	54,000,000
No. Shares outstanding	47,485,000	47,185,500

The key stock market figures for the years 2025 and 2024 are reported in the following table:

(1) dividends on the 2025 figures on the basis of the proposal for the allocation of the result to the Shareholders' AGM

(2) represents the percentage of pro-forma consolidated net profit distributed as dividend

(3) ratio between the dividend and the share price on the last day of the financial year

The multi-voting rights came into effect on September 1, 2023. The rights relate to 25,044,667 ordinary shares, pursuant to Article 127-quinquies of the Consolidated Finance Act and in compliance with the provisions of the Company By-Laws and the Regulations for multi-voting rights, adopted by the Company on July 29, 2021. As a result of voting rights increases and waivers exercised by certain shareholders, voting rights currently total 80,293,591.

The list of parties holding, directly or indirectly, more than 5% of the share capital (the significance threshold established by Article 120, paragraph 2 of Legs. Decree No. 58 of 1998 for BasicNet which is classified as a "Small-Medium sized enterprise" as per Article 1, letter w-quater 1) of Legs. Decree No. 58 of 1998), represented by shares with voting rights, according to the shareholders' register, supplemented by the communications received in accordance with Article 120 of Legislative Decree No. 58 of 1998, other information held by the Company, and other communications as per Consob Resolution No. 21326 of April 9, 2020, is as follows:

Shareholder	% held of share capital (1)	% of voting rights (2)	Note
Marco Boglione	37.996%	51.107%	Owned directly and indirectly through Marco Boglione e Figli S.r.l., which in turn owns the entire share capital of BasicWorld S.r.l.
Helikon Investments Limited	11.730%	7.889%	Held by way of discretionary asset management. The company in addition holds "cash settled equity swaps" financial instruments on BasicNet shares equal to 1.081% of voting rights
BasicNet S.p.A.	11.578%	7.786%	Treasury shares in portfolio
Francesco Boglione	5.281%	7.103%	Part-owned directly and indirectly through Francesco Boglione S.r.l.

1) Calculated on 54,000,000 shares of its share capital

2) Calculated on 80,293,591 total voting rights

PRINCIPAL RISKS AND UNCERTAINTIES

The BasicNet Group is subject to a variety of strategic, market, financial and environment risks, as well as general business operational risks.

Strategic risks

These risks arise from factors that may comprise the value of the trademarks that the Group implements through its Business System. The Group requires the capacity to identify new business opportunities and markets and appropriate licensees for each market. The Group monitors the activities of its licensees and detects any problems on-line in the management of the brands in the various regions. However, as the commercial license contracts usually establish the advance payment of guaranteed minimum royalties, economic conditions on certain markets may impact the financial capacity of certain licensees, temporarily reducing royalties, particularly where such licensees had previously exceeded the guaranteed minimums.

Risks associated with economic conditions

The Group retains that its Business System has the flexibility needed to swiftly respond to changes in customers' tastes and to limited and localised consumer slowdown. However, the Group may be exposed to economic crises and social and general unrest, which may impact on consumer trends and the general economic outlook.

Macroeconomic risks

The Group's widespread presence in many countries around the world makes it possible to reduce the risks inherent in a business that is heavily concentrated in specific regions. Nonetheless, deteriorations in economic, social, political, or environmental circumstances in one or more markets could have an adverse effect on sales and on financial performance. In addition, restrictions set by national or supranational bodies on personal travel, such as in response to the pandemic or other international crises, or restrictions on exports as a result of commercial or financial sanctions, could have an impact on sales, particularly in the specific regions concerned. The Group is committed to preventing or mitigating environmental risks in various ways, as described in detail in the 2024 Non-Financial Report.

Licensee network operating risks

The adoption of a licensee network system has enabled the Group brands to expand and quickly enter new markets. The Group monitors the activities of its licensees and detects any problems on-line in the management of the brands in the various regions. The most important factor of the system is therefore to guarantee the capacity to identify new business opportunities and markets and appropriate licensees for each market. The main risk is therefore the undertaking of licensees not equipped for the task and the particular local market.

The Group has adopted specific measures to assess licensees and for the drawing up of contracts to offset this risk, including:

the parallel use of Group management and specialised local information sources to identify and negotiate with licensees;
the use of license contracts based on a standard consolidated over time, prepared by outside international or local specialised legal experts to handle any exceptions, amendments or integrations, established through negotiations or for compliance with local rules;
the use of three/five-year license contracts which include way-out clauses for underperforming licensees.

The Group in addition in 2012 put in place the "dotcom"" BasicAudit for the control, verification and analysis of licensee operational compliance, identifying any discrepancies in their operations, developing contractual clauses requiring the annual preparation of certified statements by the International Auditing Firm to certify the data sent to the Group, and carrying out specific controls at licensee offices.

Risks related to BasicNet Group production

BasicNet carries out extensive selection and monitoring activities on the Sourcing Centers i.e. licensee businesses managing the production flows of Group brand finished products, which are distributed by the commercial licensees within their respective areas and has developed an IT platform which directly connects the productive and commercial licensees.

The theoretical risks identified with regards to the Sourcing Centers are:

the possibility that the Sourcing Centers fail to identify producers who can guarantee the required quality standards of BasicNet for product packaging;
the trust risk regarding the Sourcing Centers, which may hinder the correct identification of product costs;
compliance risk concerning the international rules governing labour contracts and sustainability and safety compliance, which may impact the international image of the Group brands.

BasicNet has put in place specific operating mechanisms to correctly manage these risks, including:

a selection of Sourcing Centers based on an assessment of the technical requirements to satisfy Group needs in terms of quality, volumes and production times (contained in the "Sourcing Agreement"), in addition to the financial solidity of the manufacturer, assessed through specific onsite visits and repeated on a consistent basis;
the use of anti-trust controls that require that strategic products be produced by at least two or three Sourcing Centers (if possible in differing regions). Moreover, after five years orders are switched to a new sourcing centre, and we make sure that no factory devotes more than half of its productive capacity to our Group's brand-name products.
the use of contracts with Sourcing Centers stipulating the commitment of the contracting parties to comply with local and international labour and environmental regulations and the signing of a commitment to comply with the Code of Conduct, based on the key conventions of the International Labour Organisation (ILO) and the Universal Declaration of Human Rights and the Product Restricted Substances List (PRSL);
the Sourcing Center operational cash flows are finally subject to checks by BasicAudit.

Currency risk

The Group is exposed to currency risk on merchandise purchases or royalty income from commercial licensees and sourcing centre commissions not within the Eurozone. These transactions are mainly in US Dollars and to a lesser extent in Japanese Yen, UK Sterling and Swiss Francs.

The risks on fluctuations of the US Dollar on purchases are measured, preliminary, in the preparation of the budgets and finished products price lists, so as to adequately cover the impact of these fluctuations on sales margins.

Subsequently, royalty income and sourcing commissions from sales are utilised to cover purchases in foreign currencies, within the normal activities of the Group centralised treasury management.

For the foreign currency purchases not covered by foreign currency receipts, or in the case of significant time differences between receipts and payments, forward purchase and sales contracts (flexi-term) are underwritten.

The Group does not undertake derivative financial instruments for speculative purposes.

Credit risk

Royalty trade receivables are largely secured by bank guarantees, corporate sureties, letters of credit, guarantee deposits, or advance payment, provided by licensees.

Sourcing commission receivables are covered by the payables of the subsidiaries Kappa S.r.l., K-Way S.p.A., Sebago S.r.l. and Superga S.r.l. to Sourcing Centers.

Receivables from Italian and European footwear and apparel retailers within the subsidiaries are monitored continually by the credit department of the company alongside specialised legal recovery firms and partners throughout the country, commencing from the customer order. Receivables from the brand stores under franchises are paid weekly, related to their sales and do not present substantial insolvency risks.

Liquidity risk

The sector in which the Group operates is exposed to seasonal factors, which impact upon the timing of goods procurement compared to sales, in particular where the products are acquired on markets with favourable production costs and where the lead times are however much longer. These factors also have seasonal effects on the financial cycle of the Group's commercial companies.

Short-term debt to finance working capital needs comprises "import financing" and "self-liquidating bank advances" secured by the order backlog. The Group manages the liquidity risk through close control on operating working capital with specific attention on inventories, receivables, trade payables and treasury management, with real-time operational reporting indicators or, for some information, at least on a monthly basis, reporting to Senior Management.

Interest rate risk

The interest fluctuation risks of some medium-term loans were hedged with conversion of the variable rate into fixed rates (swaps).

Environmental risks

Climate change and the transition to a more sustainable economy are driving a constantly changing environment with significant implications for businesses. The adoption of new regulations, changes in the markets and in consumer preferences, technological innovations, and the increasing stakeholder focus on sustainability all pose both challenges and opportunities. In this landscape, four main categories of transition risks have been identified that may affect the Group, both operationally and strategically.

The analyses conducted have identified four categories of transition risk and their impact on the Group:

Market risks: changes in the cost of energy and raw materials, together with consumer preferences, can lead to significant impacts. In addition, the increase in insurance costs related to Group assets is influenced by the rising frequency of natural disasters.
Legislative and regulatory risks: compliance with increasingly stringent laws and regulations imposes stricter requirements for products to reduce emissions and waste and to increase circularity. The impact of these factors may vary as the regulatory landscape evolves.
Technological risks: the need to acquire new technical capabilities, implement advanced systems and optimise the use of business performance data is a transformative element with varying impacts depending on market conditions.
Reputational risks: businesses are subject to increasing expectations regarding their ability to meet the challenges of transition, supply chain management, and transparency in communicating their sustainability strategy, with significant consequences on brand perception.

While the Group has not currently adopted a formalised transition plan or specific policies to manage transition risks, principles, procedures, and control systems have been established to manage and mitigate environmental risks, including climate risks, that concern suppliers of raw materials and processing services. As formalised in the Ethics Code and in the Code of Conduct, the Group is committed to adopting and disseminating responsible environmental protection attitudes. As provided under the Code of Conduct, the Sourcing Centres are also required to comply with all environmental laws and regulations, as well as maintaining procedures to notify the local Authorities in a timely manner of any environmental incidents arising from the work carried out by the Sourcing Centres. In addition, the Group is committed to finding the most suitable solutions to ensuring the responsible use of resources and reduced energy consumption in its operations and waste management.

Specifically with respect to risks related to potential operational disruptions due to natural events or other external factors, the Group has adopted specific measures, including business continuity plans and insurance coverage, to protect the integrity of assets and limit the consequences of any operational downtime.

Risks relating to legal and tax disputes

The Group may be involved in legal and tax disputes, concerning specific issues and in various jurisdictions. Considering the uncertainties relating to these issues, it is difficult to predict with precision any future payments required. In addition, the Group has instigated legal action for the protection of its Trademarks, and of its products, against counterfeit products. The cases and disputes against the Group often derive from complex legal issues, which are often subject to varying degrees of uncertainty, including the facts and circumstances relating to each case, jurisprudence and different applicable laws.

In the normal course of business, management consults with its legal consultants and experts in fiscal matters. The Group accrues a liability against disputes when it considers it is probable that there will be a financial payment made and when the amount of the losses arising can be reasonably estimated.

The main disputes in which the Group is involved are summarised below.

Tax disputes

Alleged tax inversion Basic Properties America

Between 2018 and 2022, the Tax Agency challenged various Group foreign companies for unpaid taxes in Italy between 2011 and 2016, for a total of approx. Euro 6 million in direct taxes and VAT, plus interest and penalties. The disputes relate specifically to the alleged requalification of the American company Basic Properties America, Ltd. as a tax resident in Italy and the consequent VAT treatment of royalties paid by it to the Group's other foreign companies. As they did not consider the arguments put forward by the Agency to be well-founded, the companies lodged appeals against all the assessment notices, together with requests for suspension of their executive effects.

The Group companies involved have had their claims recognised in the first and second instance for all the years in dispute.

Because the Tax Agency, by way of the Attorney General, appealed to the Court of Cassation all unfavourable rulings, the Group companies involved have filed a counter-appeal pursuant to Article 370 of the Code of Civil Procedure.

As of today, for all the years in dispute, the scheduling of the hearing before the Court of Cassation is still awaited.

Commercial disputes

FISI pre-emption right

BasicItalia S.p.A. (now "BasicItalia S.r.l.") has exercised, on June 3, 2021, its pre-emption right, under the agreement concluding on April 30, 2022, to enter into a new sponsorship contract for the Italian Winter Sports Federation through the Kappa brand for the four-year period 2022-26, which includes the Milan Cortina 2026 Olympics. Nevertheless, FISI considered that the exercise of the pre-emption right by BasicItalia was not sufficient to conclude a contract and informed the BasicNet Group of its intention to sign a sponsorship agreement with a third party.

The judgment in the case on the merits, issued on February 23, 2023, confirms this protective order issued on July 14, 2022 and the position of BasicItalia, namely that from the moment of BasicItalia's acceptance of the conditions offered by FISI, and thus from June 3, 2021, a new sponsorship contract was concluded between BasicItalia and FISI for the 2022/23 seasons until the 2025/26 season, also recognising a right of first refusal in favour of Basic Italia for the following four-year period.

As a result, the court ordered FISI to fulfil its contractual obligations, prohibiting FISI from entering into supply and sponsorship contracts with third parties other than BasicItalia and from using in its competitive activities clothing items with trademarks other than those indicated in the contract between BasicItalia and FISI.

Regarding damages, the Court ruled that the damage resulting from FISI's breach of duty can only be fully assessed and quantified following the last competitive season until at least 2025/2026.

FISI appealed the judgment by writ of summons served on March 27, 2023, requesting to suspend and/or revoke the provisional enforceability of the judgment and to uphold the appeal on the basis of the conclusions advanced by FISI in the first instance judgment and, by way of counterclaim, to establish BasicItalia's failure to comply with the provisions of the Contract and to declare the termination of the Contract for non-performance with an order to pay damages.

On July 20, 2023, FISI's request for a stay of the enforceability of the first instance ruling was granted by the Court of Appeals.

In a ruling published on September 17, 2024, the Milan Court of Appeals did not uphold the first instance ruling regarding BasicItalia's demands and declared that BasicItalia's acceptance of the proposal received from FISI in application of the right of first refusal would not have established a contract between BasicItalia and FISI.

BasicItalia appealed the ruling in the Court of Cassation, notifying FISI on March 17, 2025, while FISI filed a counter-appeal on April 28, 2025. A date for the Council Chamber meeting is still awaited, following which the Court of Cassation will rule. The Court of Cassation will grant a deadline to the Public Prosecutor at least 20 days before the Council Chamber meeting and a deadline to the parties at least 10 days before the meeting to file briefs.

Dispute with Audi AG

A dispute is ongoing between the BasicNet Group and Audi regarding the use of Audi trademarks on replica products connected to the FISI sponsorship. In 2025, the Turin Court of First Instance issued a judgment ordering BasicItalia S.r.l., jointly and severally with BasicNet S.p.A., to pay Euro 1,450,589. The Company considered that valid grounds existed to challenge the decision and accordingly lodged an appeal, seeking its reversal or, in the alternative, a reassessment of the amount awarded. Audi entered an appearance and in turn filed a cross-appeal. The case is currently pending before the Turin Court of Appeal, with the hearing for submission to judgment scheduled for January 2027. The proceedings are therefore at the second-instance stage, and developments will be monitored in future years.

It should be noted that, although this dispute has been pending since prior financial years, it had not previously been the subject of specific disclosure, as on the basis of assessments carried out with the support of legal counsel a provision considered adequate to cover the related risk had been recognised.

OTHER INFORMATION

ESSENTIAL INTANGIBLE RESOURCES

The BasicNet Group defines the following resources, which are without physical substance, on which the business model of the organisation fundamentally depends, and which are a source of value creation for the Group, as essential intangible resources:

Human Capital, which includes sharing in and supporting the organisation's model of governance, approach to risk management, and ethical values; the ability to understand, develop, and implement the organisation's strategy; loyalty and commitment to the improvement of processes, goods, and services, including their ability to lead, manage, and collaborate; and the value provided by employees by way of the application of their skills, experiences, and know-how.
Social and Relational Capital, which includes common rules, behaviours, and values; relationships with key stakeholders, and the trust and commitment that the organisation has developed and strives to build and protect for the benefit of external stakeholders; the intangible assets associated with the brands and reputation developed by the organisation; and the intrinsic value of relationships with customers, suppliers, business partners, investors, and other key stakeholders.
Intellectual Capital, which includes intellectual property, such as trademarks, patents, copyrights, software, and other rights and licenses; organisational capital, such as implicit knowledge, systems, procedures and protocols; and value created through innovations and processes.

See the note "Intangible assets" in the consolidated and separate financial statements for information on the assets reported in the financial statements.

For information on unrecognised assets and how these resources are a source of value creation, see the BasicNet Group's Sustainability Statement, paragraph 1 – General Information and paragraph 3 – Social Information.

HUMAN RESOURCES AND THE ENVIRONMENT

Human Resources and the environment are explored in specific sections of the Sustainability Statement as per Legislative Decree 254/2016, respectively at paragraphs 3 and 4, to which reference should be made.

TREASURY SHARES

Under the treasury share buy-back programme, authorised by the Shareholders' AGM of April 17, 2025 and concluding at the date of the Shareholders' AGM for the approval of the 2025 Annual Accounts, at the date of this report 1,438,665 treasury shares had been acquired (2.664% of the Share Capital) at an average price of Euro 7.43, for a total of Euro 10,684,037.

BasicNet today holds a total of 6,252,000 treasury shares (equal to 11.578% of the Share Capital and 7.786% of the voting rights), for an investment of over Euro 32.7 million. The Group intends to continue the share buy-back programme in 2026 and proposes to the Shareholders' AGM to renew the authorisation. The proposal is submitted in order to provide the Company with a instrument to assist projects developed upon the strategic guidelines under which share swap opportunities are presented or as a guarantee for financing operations, or to service any incentive and loyalty plans adopted by the Company,

STOCK OPTION PLANS

The Board of Directors, in their meeting of February 12, 2025, approved the Regulations for the 2024-2027 Stock Grant and Incentive Plan for directors and employees of the Company or Group companies (as approved by the shareholders last year) and granted powers for its implementation.

OPT-OUT REGIMES

The Board of Directors of BasicNet decided on December 19, 2012, in accordance with Consob motion No. 18079 of January 20, 2012, to apply the opt-out as per Article 70, paragraphs 8 and 71, paragraph 1-bis of the Issuers' Regulation, applying therefore the exception from publication of the required disclosure documents concerning significant merger, spin-off, share capital increase through conferment of assets in kind, acquisition, and sales operations.

SHARES HELD BY DIRECTORS AND STATUTORY AUDITORS

The shares held by the Directors and Statutory Auditors are reported in the Remuneration Report, available together with the documentation for the 2025 Shareholders' AGM on the website www.basicnet.com, to which reference should be made.

TRANSACTIONS WITH HOLDING COMPANIES, ASSOCIATES, OTHER INVESTMENTS AND RELATED PARTIES

The information on transactions with related parties are presented in Note 49 of the consolidated financial statements.

The transactions with related parties are not atypical or unusual and form part of the ordinary business activities of the companies of the Group. These transactions were at normal market conditions.

The operations between Group companies, which substantially involve the purchase of goods and provision of services, under normal market conditions, are not of an atypical or unusual nature, but within the normal business activities of the companies of the Group and are eliminated on consolidation.

The effects deriving from transactions between BasicNet S.p.A. and its subsidiaries are reported in the financial statements of the Parent Company and in the explanatory notes to the financial statements.

The Italian Group companies took part in the tax consolidation of BasicNet S.p.A. as per Articles 117 and subsequent of the Income Tax Law - Pres. Decree December 22, 1986 No. 917.

The Board of Directors approved on October 29, 2010 and updated most recently in June 2021 the procedure for transactions with related parties, which are summarised in the Corporate Governance and Ownership Report. The procedure is also available in its full version on the Group website (www.basicnet.com in the section "BasicNet Corporate Governance").

Governance of subsidiaries outside of the European Union

In accordance with Article 15 of the Markets' Regulation, the company and its subsidiaries utilise administrativeaccounting systems which enable the provision to the public of the financial statements used for the purposes of the preparation of the consolidated financial statements of the companies falling within the scope of this regulation and permit management and the auditors of the Parent Company to access the data necessary for preparation of the consolidated financial statements.

The conditions of the above-stated Article 16, letters a), b) and c) of the Markets' Regulation issued by Consob are therefore complied with.

The composition of the Board of Directors of the companies is available on the website www.basicnet.com/ilgruppo/organisociali.

RESEARCH AND DEVELOPMENT

In keeping with its economic goals and its responsibility to its stakeholders, the Group regards research and innovation as key to its growth and success.

The Group's research and development activity focuses on three main fields of inquiry:

product research aimed at developing collections of athletic and casual apparel and footwear;
IT research aimed at developing data collection and transmission systems;
research and development of communication and marketing guidelines.

These fields of inquiry – the pursuit of which involves most internal personnel – translate into three main types of research and development activities:

creating and designing products to suit market needs and the performance specifications set by clients for articles of apparel;
designing and testing the software and applications that comprise the IT platform, taking account of the needs expressed by licensees;
drafting and implementing global "marketing communication" guidelines to be made available on the web portal to licensees for the development of local marketing.

Creating garment models and designs

This category includes product research aimed at developing collections of athletic and casual apparel and footwear, from material research to the styling and graphical design of garments, the identification of specific production techniques and the creation of garment prototypes and samples, with a focus on environmental sustainability in materials and processing research. K-Way, Kappa, Superga, Briko and Sebago develop models and designs for all of the Group's brands with the goal of marketing products that provide high added value and are strongly appreciated by consumers for their aesthetic qualities, such as their colour, materials and shape. Designs and models are validated through prototyping (in some cases involving the use of 3D printers), which allows designs to be shared with licensees and Sourcing Centers, often – and most importantly – before actual production begins. In particular, concepts are created, basic designs are prepared and prototypes are produced for all unique, individual designs and models. Early designs form a "meta-collection" which then becomes a "mega-collection" (a set of approved articles) on the basis of feedback from the various licensees. The "megacollection" is then made available on the online platform for the purchase of samples by the licensees. The selection of articles purchased makes up the "collection" distributed to the market.

New software development

This category includes IT research in terms of the development of proprietary information systems connecting the companies of the BasicNet Network licensees both to each other and externally. The software and apps developed fall into three major categories by intended use:

Software and applications used in business management i.e. vertical IT solutions for various company functions that can be automated and/or monitored within a business, thus allowing users to operate in a uniform, integrated environment;

E-commerce software and applications, i.e. highly innovative business solutions that meet a wide range of needs in terms of multichannel interface and marketing;
Web-integration software and applications, which are innovative platforms to manage information exchange within the network and to connect with the licensee and sourcing systems.

This type of software is generally used in specific functional areas to carry out activities such as selecting, negotiating and entering into licence agreements, managing the procurement of goods and services, managing ecommerce sales, managing all administrative activities, managing personnel, managing workplace health and safety obligations, managing cash flows, managing institutional and commercial communication, carrying out sponsorship activities and activities involved in designing new collections and making them available to network member companies.

Brand exploitation and sponsorship

This category includes research regarding communication and marketing, i.e. the means that licensees or owners of the Brand use to inform end users of their products and what sets them apart from the competition or the state of the art, as well as to advertise their products and brands. Communication and marketing contribute to brand value and drive sales by increasing brand visibility, supporting positive views or perceptions of brands and increasing customer loyalty. It follows that in order for a brand to grow in the long term, marketing must be appropriately organized so as to satisfy the needs of an increasingly large audience and to take account of multiple objectives. Each company [brand] for its own brand are responsible for setting the Group's commercial strategy and managing the proper combination of distribution channels. Local licensees are responsible for carrying out marketing activities in accordance with the Group's guidelines. The activity performed in this regard is thus attributable to the following communication channels: promotion of sales, public relations, advertising and interactive marketing.

In conducting business, the BasicNet Group is committed to ensuring ethical, transparent relations with all of its stakeholders, and with its shareholders, employees and business partners in particular. Development of BasicNet's business is centred on compliance with laws and regulations, combating bribery and corruption, ethical values and respect for human rights. The following Corporate Governance and Ownership Structure Report and Consolidated Non-Financial Report are key to ensuring transparency and responsibility towards all of the Group's stakeholders.

SUBSEQUENT EVENTS TO THE YEAR-END AND OUTLOOK

Among the significant events occurring after the close of the financial year, it should be noted that, following preliminary consultations with trade union representatives in December, a draft agreement was reached in late January 2026 regarding the project to consolidate operations at the Turin headquarters, ahead of the subsequent closure of the Bologna and Milan offices. The agreement, reached in concurrence with the relevant authorities, was subsequently put to a referendum among employees and approved by a majority vote. The parties accordingly signed the trade union agreement on February 25, 2026.

The Company is therefore proceeding with implementation of the agreement by issuing individual notices to the affected employees, giving each employee the option of accepting the transfer to the new headquarters, enrolling in a voluntary incentivised departure programme with multiple time windows, or temporarily retaining their current employment at the Bologna or Milan offices until March 31, 2027. The Company has also initiated collective redundancy procedures for employees who have not indicated their willingness to transfer.

By March 31, 2026, the Company expects to have a full picture of employees' choices. Transfers will take effect from September 1, 2026, while any departures will occur progressively in accordance with the time windows set out in the agreement. Based on the commitments collected so far, the expected expenditure is approximately in the range of Euro 6.5 to 7 million.

***

This year begins amidst a highly uncertain economic and geopolitical environment. The potential impacts from the international tensions and regional conflicts may affect global market performances and trade flows.

The progressive integration of the recently-acquired Woolrich® and Sundek® brands will be a key factor throughout the year. This will require an organisational and managerial commitment focused on enhancing industrial, distribution and operational synergies. This process will take place gradually, so as to protect the brand's distinctive identity and positioning.

The strategy remains focused on enhancing the overall brand portfolio, selective development on those markets with the greatest potential and the strengthening of the direct and digital channels, while maintaining a prudent and sustainable approach to value creation over the medium-term.

* * *

PROPOSAL TO THE SHAREHOLDERS' AGM TO APPROVE THE FINANCIAL STATEMENTS FOR THE YEAR

Dear Shareholders,

We submit the following:

MOTION

the Shareholders' Meeting of BasicNet S.p.A., having reviewed the 2025 results, the Directors' Report, including the Sustainability Statement for 2025 drawn up as per Legislative Decree No. 125/2024 and having noted the Board of Statutory Auditors' Report and that of the Independent Audit Firm EY S.p.A.,

RESOLVES

to approve the Financial Statements at December 31, 2025, in relation to each individual part and in its entirety.

PROPOSAL FOR THE ALLOCATION OF NET PROFIT FOR THE YEAR 2025 AND DIVIDEND DISTRIBUTION RESOLUTIONS THEREON.

Dear Shareholders,

We propose the allocation of the net profit of Euro 126,280,329.21 as follows:

	to each of the 47,748,000 ordinary shares in circulation (excluding the 6,252,000 treasury shares held at March 11, 2026), a dividend of Euro 0.16 before withholding taxes for an amount of	Euro	7,639,680.00
	to unrealised exchange gains reserves, for a total of	Euro	1,465.91
	to retained earnings the residual amount, for a total of	Euro	118,639,183.30

The amount will be paid from April 29, 2026, with record date of April 28, 2026 and coupon date (No. 19) of April 27, 2026.

We also propose that, if at the dividend coupon date the number of shares with dividend rights is lower than indicated above due to any share buy-backs by the company, the relative dividend will be allocated to retained earnings, as will any rounding made on payment.

We propose therefore the following:

MOTION

the BasicNet S.p.A. Ordinary Shareholders' Meeting

RESOLVES

to approve the proposed allocation of the net profit for the year of Euro 126,280,329.21, as presented above, and the proposed payment of a dividend of Euro 0.16 to each of the ordinary shares in circulation and entitled to receive dividends on the coupon date.

Turin, March 11, 2026

for the Board of Directors

The Chairperson

Marco Daniele Boglione

CORPORATE GOVERNANCE REPORT

Introduction

Pursuant to Article 123-bis of Legislative Decree No. 58/1998 (Consolidated Finance Act, hereinafter "CFA"), listed companies are required to annually issue a "Corporate Governance and Ownership Structure Report" which includes information on voluntary compliance to a code of conduct promoted by regulated market management companies or trade associations, giving reasons for any failure to comply to one or more provisions. In this report, listed companies must in any case indicate the corporate governance practices "effectively applied by the company beyond its obligations under laws or regulations."

Article 89-bis of the Consob Issuers' Regulation issued by Resolution No. 11971 of 1999 (as amended) on issuers (hereafter the "Consob Regulation"), in regulating the above obligation, stipulates that listed companies that have not complied with or intend not to continue to comply with codes of conduct must disclose such in a report to be published annually, including on the company's website, together with the Directors' Report.

BasicNet has its own governance model, which is constantly updated in relation to changes in the regulations on listed companies. In addition, since the listing BasicNet has always complied with the Self-Governance Code promoted by Borsa Italiana and, in line with EU Recommendation No. 208/2014 and as provided in Paragraph IV of the "Guiding Principles" of the Corporate Governance Code, has always provided evidence and explanation, in the Annual Report made available to the Market, where any principles or application criteria have been disregarded.

Starting from the 2022 financial year, BasicNet decided not to continue compliance with the Corporate Governance Code except to the extent that its recommendations correspond to those introduced by the legislation in force for listed companies, namely the Civil Code, the Consolidated Finance Act and the related regulations issued by Consob, Borsa Italiana and the applicable European regulations.

The Company, having assessed how its corporate governance model, which has been gradually introduced following the entry into force of new rules, has always ensured full transparency and fairness in conducting its activities, in addition to a balanced and effective system of controls and risk monitoring, considering certain provisions of the Corporate Governance Code, to effectively form, with regard to the size and composition of the shareholder base, an overarching structure in terms of compliance, obliging the company to repeat the reasons for non-compliance of one or more provisions of the code.

The existing Board of Directors and the Internal Board Committees maintain continuity with the skills, organisation and functions performed in previous financial years, consistent with the governance approach already adopted.

The recommendations of the Corporate Governance Code were followed where deemed useful and appropriate for the Company.

For ease of reading, the format suggested by Borsa Italiana to issuing companies in its latest edition of December 2024 was followed in drafting this Report, with appropriate adaptations to BasicNet S.p.A.'s corporate governance model.

1. ISSUER PROFILE

The BasicNet Group operates in the apparel, footwear and accessories sector through the brands Kappa®, Robe di Kappa®, K-Way®, Superga®, Briko®, Jesus®Jeans, Sebago®, Woolrich® and Sundek®.

Group activities involve driving brand enhancement and product distribution through a global network of independent licensees. This business network is defined as the "Network". And from which the name BasicNet derives. The Network of licensees encompasses all key markets worldwide.

In its operations, BasicNet has always sought to create value for its shareholders and, more generally, all those who have a stake in the Group's business. The main stakeholders include groups directly linked to business activities, such as Group Resources, the Network of licensees, Investors, Shareholders and the Financial Community, the PA, Governmental and Control Bodies and the Local Communities in which the Group operates.

The sustainable success is achieved through BasicNet's Business System, which offers business opportunities to a worldwide network of independent companies that do business with the Group, namely its manufacturing licensees (sourcing centres) and its commercial licensees (licensees). Accordingly, BasicNet is aware that the Group's economic growth is closely linked to the economic development of its licensees, and that this link represents an initial important factor of sustainability that is inherent to the nature of the Group's business.

For years now, the Group has been working to innovate the design and quality of their collections and to find sustainable products and materials. This activity began with the brands Kappa® and Robe di Kappa® and continued with K-Way®, the collections of which include environmentally sustainable processes and materials, as well as with Superga®, with Sebago®, whose winning features are strength and durability, and Briko®. The Group plans to gradually align Woolrich® and Sundek®, which were acquired in late 2025, with the product development, quality and sustainability standards already adopted at the brand portfolio level.

BasicNet S.p.A. is the parent company of the Group – with headquarters in Turin - listed on the Italian Stock Exchange.

The Governance of BasicNet S.p.A. is represented by the Shareholders' Meeting, the Board of Directors and the Board of Statutory Auditors.

The Company has prepared the Consolidated Sustainability Statement in accordance with Legislative Decree No. 125 of September 6, 2024, which is published together with the Directors' Report and Annual Financial Report and may be found at www.basicnet.com.

The average capitalisation in 2025 was Euro 404.6 million. As such, the Company continued to fall under the definition of SME in Article 1, paragraph 1, letter w-quater.1) of the CFA and 2-ter of the Consob Issuers' Regulation, as per the criteria published by Consob on its website at the following link: https://www.consob.it/web/area-pubblica/emittenti-quotati-pmi.

1. DISCLOSURE ON THE OWNERSHIP STRUCTURE AT MARCH 11, 2026 (pursuant to Article 123-bis, paragraph 1 of the CFA)
a) Share capital structure (pursuant to Article 123-bis, paragraph 1, letter a), CFA)

On May 30, 2022, the Extraordinary Shareholders' Meeting of the company approved the elimination from Article 5 of the By-Laws - Share Capital - the reference to the nominal value of the shares, to cancel 6,993,602 treasury shares with no nominal value held by the Company, maintaining the amount of share capital unchanged. Consequently, the Share Capital, fully subscribed and paid-in, amounts to Euro 31,716,673.04 and comprises 54,000,000 ordinary shares listed on the Euronext Milan (EXM).

At the date of this Report, the Company holds 6,252,000 treasury shares, equal to 11.578% of the total shares constituting the share capital and 7.786% of the voting rights.

The Company has not issued financial instruments that attribute the right to subscribe to new share issues.

No share-based incentive plans have been introduced which would resulted in an increase, including through scrip issues, of the share capital.

b) Restriction on the transfer of shares (pursuant to Article 123-bis, paragraph 1, letter b), CFA)

At the date of the present Report, there are no restrictions on the transfer of shares.

c) Significant holdings (pursuant to Article 123-bis, paragraph 1, letter c), CFA)

As stated above, with reference to Article 1, letter w-quater 1) of the CFA, BasicNet qualifies as a "Small-Medium-sized enterprise" (SME). The significance threshold is 5% of the share capital with voting rights.

The increased voting rights came into effect on September 1, 2023, pursuant to Article 127-quinquies of the Consolidated Finance Act and in compliance with the provisions of the By-Laws and the Regulations for multi-voting rights, adopted by the Company on July 29, 2021. As a result of voting rights increases and waivers exercised by certain shareholders, voting rights currently total 80,293,591.

The list of parties holding, directly or indirectly, more than 5% of the share capital with voting rights according to the shareholders' register, supplemented by the communications received in accordance with Article 120 of Legislative Decree No. 58 of 1998 and other information held by the Company, is as follows:

Shareholder	% held of share capital (1)	% of voting rights (2)	Notes
Marco Boglione	37.996%	51.107%	Owned directly and indirectly through Marco Boglione e Figli S.r.l., which in turn owns the entire share capital of BasicWorld S.r.l.
Helikon Investments Limited	11.730%	7.889%	Held by way of discretionary asset management. The company in addition holds "cash settled equity swaps" financial instruments on BasicNet shares equal to 1.081% of voting rights.
BasicNet S.p.A.	11.578%	7.786%	Treasury shares in portfolio.
Francesco Boglione	5.281%	7.103%	Part-owned directly and indirectly through San Vito 175 S.r.l. (formerly Francesco Boglione S.r.l.).

3) Calculated on 54,000,000 shares of its share capital

4) Calculated on 80,293,591 total voting rights.

d) Shares which confer special rights (pursuant to Article 123-bis, paragraph 1, letter d), CFA)

There are no shares which confer special control rights.

The Extraordinary Shareholders' Meeting of July 29, 2021 approved the amendments to the By-Laws to introduce the increased voting rights mechanism, as per Article 127-quinquies of Legislative Decree No. 58/98. This mechanism permits the assignment of two votes for each ordinary BasicNet share held by the same Shareholder of the Company for a continuous period of at least 24 months from their enrolment in a special Register set up and maintained by the Company.

On the same date, the Board of Directors, based on the mandate conferred by the Extraordinary Shareholders' Meeting, adopted the regulation for the governance of the registration, maintenance and updating of the Special Register in compliance with the applicable regulation, the Company By-Laws and market best practice. At present, and in consideration of the date on which the mechanism was introduced, 26,293,591 shares enjoy increased voting rights.

The list of shareholders with an interest of more than 5% of the share capital expressed in voting rights of BasicNet S.p.A. that are registered in the special list for the legitimacy of increased voting rights (Article 127-quinquies, paragraph 2, of the CFA) and who have achieved double voting after 24 months from the date of enrolment is available on the Company's website at https://www.basicnet.com/contenuti/corporate/votoMaggiorato.asp?menuSelectedID=2h.

e) Employee participation rights: method of exercise of voting rights (pursuant to Article 123-bis, paragraph 1, letter e), CFA)

At the date of this Report, no employee share ownership mechanisms were in place.

The Board of Directors meeting of March 8, 2024 resolved to submit for approval to the BasicNet Shareholders' Meeting of April 16, 2024, the introduction of an incentive plan providing for the free allocation, to employees and Directors of the Group headed by the Company, of a maximum of 2,000,000 (two million) ordinary shares of the Company, to be taken from the treasury shares held in portfolio - the "2024 - 2027 Stock Grant" (the "Plan").

The Plan is for the Directors and employees of the BasicNet Group who will be identified, from among the members of the Board of Directors and employees of BasicNet S.p.A. and the companies it - directly or indirectly - controls with the aim of incentivising them, retaining their loyalty and setting the conditions for attracting additional talented people.

The aspects related to implementation of the Plan have been defined by the regulations approved by the Board of Directors at their meeting of February 12, 2025, as explained in greater detail at point 8 below, concerning Director remuneration and the Remuneration Committee.

Information regarding the share-based incentive plan is also provided in accordance with the guidance for the prospectus under Schedule No. 7-bis of Annex 3A to the Issuers' Regulation issued by Consob, which is available to the public at the Company's offices, on the Company website at www.BasicNet.com (in the section "Financial data/Information Documents and other documents/2024-2027 Stock Grant Plan") and on the authorised storage mechanism "1info" (www.1info.it).

f) Voting restrictions (pursuant to Article 123-bis, paragraph 1, letter f), CFA)

There are no restrictions on voting rights.

The issuer has exclusively issued ordinary shares; each share provides one vote (pursuant to Article 6 of the By-Laws), without prejudice to the multi-voting rights mechanism described in paragraphs c) and d) above, up to a maximum of two votes per share. Article 21 of the By-Laws excludes the right to withdrawal with regards to motions concerning the extension of the company's duration or the introduction or the removal of restrictions on the circulation of equities.

g) Shareholder agreements (pursuant to Article 123-bis, paragraph 1, letter g), CFA)

On February 28, 2025, BasicWorld S.r.l., registered office in Turin, Italy, at Largo Maurizio Vitale, 1, Marco Daniele Boglione and Permira Strategic Growth Topco S.à r.l. RAIF, headquartered in Luxembourg, 488 Route de Longwy, LEI code no.: 254900POENVC0J2ALR30, signed a shareholder agreement pursuant to Article 122, paragraph 1, of the CFA concerning the shares directly and indirectly held by BasicWorld S.r.l. and Marco Daniele Boglione.

The aforementioned shareholders have committed to Permira Strategic Growth Topco S.à r.l. RAIF to exercise their respective voting rights at the Shareholders' Meetings of BasicNet S.p.A. for the approval of a spin-off or any other transaction (or series of transactions) aimed at transferring interests in K-Way (or in any company that, directly or indirectly, controls K-Way, the "K-Way Vehicle") to BasicNet and from the latter to its shareholders. The foregoing is agreed in the event that the shares of K-Way (or the K-Way Vehicle)

are admitted to trading on a regulated market or multilateral trading facility.

h) Change of control clause (pursuant to Article 123-bis, paragraph 1, letter h), CFA) and statutory provisions on public purchase offers (pursuant to Articles 104, paragraph 1-ter and 104-bis, paragraph 1, CFA)

The contractual conditions of the loans in place at the date of the present Report include typical clauses for such loans, such as the maintenance of some conditions concerning the holding of the majority shareholder of the Company.

Within the scope of the acquisition by Permira Strategic Growth Topco S.à r.l. RAIF of a minority shareholding in K-Way S.p.A., agreements have been made such that if the amount of total voting rights held directly or indirectly by Marco Boglione and his descendants in BasicNet falls below 40%, Permira will have the right to sell its entire shareholding to BasicNet, which will be obliged to purchase it, at fair market value, on a pro rata basis.

Statutory provisions in relation to Takeovers

The Extraordinary Shareholders' Meeting of April 29, 2011 approved, among other matters, the amendment of Article 16 of the Company By-Laws – Powers of the Board of Directors and legal representation – in order to recognise to the Board of Directors the right to implement, at any moment and without prior authorisation of the Shareholders' Meeting, defensive measures in the case of public offers or exchanges, pursuant to Article 104 of the CFA, as amended by Article 1 of Legislative Decree No. 146 of September 25, 2009. In particular Article 16 includes two paragraphs as follows:

"the Board of Directors, and any executive boards, also have the right to undertake, without a Shareholders' Meeting authorisation, all acts and operations against the objectives of a public tender or exchange offer, from the moment in which the communication in which the decision or the obligation arises to promote the offer was made public until the termination or expiry of the offer".

"the Board of Directors, and any executive boards, also has the right to implement decisions, not yet implemented in full or in part and which are not within the scope of the normal activities of the Company, undertaken before the communication as described above and whose implementation could negate the achievement of the objectives of the offer".
i) Power to increase the Share Capital and authorisation to purchase treasury shares (pursuant to Article 123 bis, paragraph 1, letter m), CFA)

Powers to increase the Share Capital

The Board of Directors do not have powers to increase the Share Capital pursuant to Article 2443 of the Civil Code.

Authorisation of share buy-back plan

The Shareholders' Meeting of April 17, 2025 authorised the Board of Directors to purchase, on one or more occasions, a maximum number of ordinary shares, taking account of those already held by the Company, not exceeding the legal limits, for a period beginning from the date of the Shareholders' Meeting until the date of the Shareholders' Meeting called to approve the 2025 financial statements. On the basis of this authorisation, the Board of Directors, meeting on the same date, initiated a plan concerning a maximum number of treasury shares equal to 20% of the share capital, for a maximum amount of Euro 30 million, in compliance with all legal limits and taking account of the treasury shares already in portfolio.

Under the treasury share buy-back programme of the Shareholders' Meeting of April 17, 2025, at the date of this report, 1,438,665 treasury shares had been acquired (2.664% of the Share Capital) at an average price of Euro 7.43, for a total of Euro 10,684,037.

Excluding the shares allocated as consideration for the acquisition of the Woolrich and Sundek brands, respectively 1,200,000 and 1,385,965 shares, BasicNet today holds a total of 6,252,000 treasury shares (equal to 11.578% of the Share Capital and 7.786% of the voting rights), for an investment of over Euro 32.7 million.

l) Direction and co-ordination activities (pursuant to Article 2497 and subs. of the Civil Code)

BasicNet S.p.A. is not subject to management and coordination pursuant to Article 2497 and thereafter of the Civil Code and has full authority to implement its general and operating strategies.

In particular, neither BasicWorld S.r.l., which holds 37.419% of the company's shares, nor Marco Boglione and Figli S.r.l., which holds the entire share capital of BasicWorld S.r.l., exercise management and coordination over the Company, as: (i) they do not issue directives to their subsidiary, and (ii) there is neither in contractually defined form nor through organisational procedures any rule that limits BasicNet S.p.A.'s or its subsidiaries decision-making autonomy;

BasicNet S.p.A carries out direction and coordination activities, pursuant to Article 2497-bis of the Civil Code, for the directly and indirectly held Group subsidiaries. This activity involves oversight of the general strategic directives and in the definition and amendment of guidelines for the Internal Governance and Control model.

The parent company BasicNet S.p.A. undertakes the "Powered by" activities serving the subsidiaries.

These "Powered by" activities mainly include:

Information Technology, i.e. the creation of new software for the online management of all supply chain processes;
co-ordination of production and commercial activity information flows on the licensees' Network;
strategic finance.

All Group companies adopt and respect the Ethics Code.

m) Other information

It is noted that:

the disclosures required by Article 123-bis, paragraph 1, letter i) ("the agreements between the Company and Directors – which provide for indemnity in the case of dismissal without just cause or in the case in which the employment services cease after a public offer") are contained in the Remuneration Policy and Report pursuant to Article 123-ter of the CFA, available on the Company's website www.basicnet.com/contenuti/datifinanziari/assembleeazionisti.asp;

the disclosures required by Article 123-bis, paragraph 1, letter l) ("applicable regulations concerning the appointment and replacement of Directors, in addition to the amendment of the By-Laws if differing from applicable law and regulations) are illustrated in the Board of Directors section (Section 4.2) of this Report;
the disclosures required by Article 123-bis, paragraph 1, letter l), second part (applicable regulations concerning the amendment of the By-Laws if differing from applicable law and regulations) are illustrated in the section of the report concerning Shareholders' Meetings (Section 13).
1. COMPLIANCE (pursuant to Article 123-bis, paragraph 2, letter a), CFA)

The Corporate Governance system adopted by BasicNet S.p.A. incorporates the rules and procedures within the Company's By-Laws and provisions of law, which outlines the system of management and control of the Company and of the Group.

As already reported in the Introduction, BasicNet has decided not to comply with the Corporate Governance Code except to the extent that its recommendations coincide with obligations already set forth in current regulations for listed companies, including the Civil Code, the CFA, regulations issued by Consob and Borsa Italiana, and applicable European regulations.

The Company has determined that its corporate governance model, progressively implemented in line with the evolution of the regulatory framework, is suitable to ensure transparency and fairness in the sustainable management of the business, in addition to being a balanced and effective system of controls and risk monitoring. As such, it was felt that certain provisions of the Corporate Governance Code, given the size and shareholder structure of the Company, may result in overlaps in terms of compliance, effectively making it necessary to reiterate the reasons for not complying with specific recommendations.

Information on the corporate governance of BasicNet S.p.A is available on the Company's website at www.basicnet.com. The site is updated regularly to include all regulatory and corporate information on the Group, including sections dedicated to sustainability, investors, and shareholders.

Specifically, the documents relating to the corporate governance system are published in the section called "Corporate Governance BasicNet". The Annual Report, which is published on the website www.basicnet.com/contenuti/corporate/corporategovernance.asp, illustrates the governance structure of the Group.

The "Group" subsection, on the other hand, publishes the following information: significant shareholders, Group structure, composition of the corporate boards, Group activities, and the video presentation.

The subsection "Corporate Boards" includes the qualifications of the Directors and other members of the Boards of Statutory Auditors of the companies of the Group.

Neither BasicNet S.p.A. nor its strategic subsidiaries are subject to laws in force outside Italy which affect the corporate governance structure.

4. BOARD OF DIRECTORS

4.1. ROLE OF THE BOARD OF DIRECTORS

The Board of Directors of BasicNet:

1. determines and pursues the Company's strategic, commercial and financial objectives;
1. pursues the objective of creating medium-/long-term value for its shareholders and, more generally, for all those who have a stake in the Group's activities by promoting growth that is economically, environmentally and socially sustainable;
assesses the organisational, administrative and accounting adequacy so that full transparency and fairness in conducting business, in addition to a balanced and effective system of controls and risk monitoring, are always ensured, in accordance with applicable laws and regulations;

promotes dialogue with shareholders and all other relevant stakeholders for BasicNet and for the Group.

Within this context, the Board of Directors:

a) examines and approves the Company and the Group's economic and financial forecasts; the enactment of the plans and the monitoring of performance are, as a rule, reviewed at the meetings called for the approval of the interim financial statements;
b) defines the organisational structure of the companies of the Group and the corporate governance system of BasicNet;
c) monitors business risks. The Board examines and approves operations of the Company and its subsidiaries prior to being carried out, when such operations have a significant strategic, economic, equity and financial impact on the Group to which the Company belongs;
d) periodically assesses the adequacy of the Company's organisational, administrative and accounting structure, following consultation with the Internal Audit function and the Control and Risks Committee on the suitability and adequacy of the Internal Control and Risk Management System;
e) assigns and revokes the delegation of powers to the executive boards, establishing the limits and manner of exercising such power and the frequency, normally not less than quarterly, with which the executive boards must report to the Board on the exercise of the powers conferred, in accordance with Article 13 of the Company By-Laws;
f) assesses the general operating performance, taking into account, in particular, the information received from Executives, as well as periodically comparing the results with the budgets;
g) by adopting procedures for the handling of inside information, defined the management of the internal and external publication of inside information and documentation concerning BasicNet and its strategic subsidiaries.

In view of that outlined above, the following companies are considered as "strategically significant" subsidiaries: Kappa S.r.l., owner of the Kappa®, Robe di Kappa® and Briko® brands, K-Way S.p.A., Superga S.r.l., Sebago S.r.l., Woolrich Europe S.p.A. and Sundek S.p.A., owner of the brands of the same name, BasicVillage S.p.A., a company engaged in the management of the Group's properties, and BasicItalia S.r.l., formerly the licensee for the group brands, which following the reorganisation took on the new role of logistic hub for the Group distribution companies, and operations, legal and administrative service provider.

For details of the information required by ESRS Principles 2 - Par. 19 and 20(b) and 22 regarding the roles and responsibilities of the Boards of Directors and management in overseeing the procedures designed to manage material risks, impacts and opportunities, see the Sustainability Statement, sections "SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model" and "IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities".

For details on the information required by ESRS 2 - Par. 24 and 26 on how the administrative and management bodies are informed of sustainability matters and how these issues were addressed during the reporting period, please refer to the Sustainability Statement, sections "GOV-1 The role of the administrative, management and supervisory bodies" and Section "GOV-2 Information provided to and sustainability matters addressed by the undertaking's administrative, management and supervisory bodies".

On March 11, 2026, the Board confirmed the adequacy of the organisational, administrative and accounting structure of the Company and its "strategically significant" subsidiaries, prepared by the Chief Executive Officers, with particular regard to the control and risks system and the general operating performance.

In expressing its opinion, the Board relies not only on the quarterly information received from the executive bodies at the Board meetings, but also on the reports issued by the Control and Risks and Related Parties Committee at the meetings to approve the draft annual and half-year financial report. These meetings provide a summary of the activities carried out, in addition to an assessment regarding the adequacy of the Internal Control and Risk Management System.

Risk assessment is carried out on the basis of a document containing the model for identifying the nature and risk compatible with the Company's strategic objectives, prepared by the Internal Audit Manager.

4.2. APPOINTMENT AND REPLACEMENT (pursuant to Article 123-bis, paragraph 1, letter l), CFA)

The norms applied in the appointment and replacement of the Directors are set out in Article 13 of the Company By-Laws, in relation to which reference should be made to the Company's website www.basicnet.com/contenuti/gruppo/statuto.asp

The Company is administered by a Board of Directors, made up of between five and fifteen members. The Shareholders' Meeting, before their appointment, establishes the number of members of the Board of Directors and the duration of office in accordance with that permitted by law. The By-Laws provide that at least one member of the Board of Directors, or two if the Board of Directors is comprised of more than seven members, should be considered independent in accordance with law. Each slate should include at least one candidate considered independent.

The procedure for appointment as per Article 13 provides:

the filing, at the registered office of the Company, within the terms required by legislative and regulatory provisions, of the slates of candidates with indication of the shareholders presenting the candidates and the overall shareholding held, together with disclosure on the personal and professional details of the candidates;
that the minority shareholders that either alone, or together with others, hold shares with voting rights representing a percentage not lower than that required by the Company under current regulations and indicated in the call notice of the Shareholders' Meeting called to resolve on the appointment, will be reserved the appointment of one Director. For 2025, this percentage was set at 2.5% (Consob Executive Resolution No. 155 of January 27, 2026);
that the procedure for electing the Directors shall be as follows: i) from the slate which obtained the highest number of votes, based on the progressive order with which they are listed in the slate, all the members necessary are elected to fill the number of Directors established for the Shareholders' Meeting, while ensuring the gender balance provisions are complied with, except one; ii) from the slate which obtained in the Shareholders' Meeting the second highest number of votes one member is elected of the Board of Directors as the first candidate on this slate;
consideration is not taken of the slates which have not obtained at least the number required by the Company By-Laws for the presentation of the slates;
should two slates receive the same number of votes, a second vote of the entire Shareholders' Meeting is taken to decide between them with the candidate being elected through a simple majority of the votes. In the case of presentation of only one slate, or in the case of no slate presented, the Shareholders' Meeting deliberates by statutory majority.

Should one or more vacancies occur on the Board, Article 2386 of the Civil Code shall be applied, as follows:

a. the Board of Directors appoints the replacements from the same slate to which the previous Directors belonged, choosing where necessary a replacement considered independent as per applicable law, with the Shareholders' Meeting voting upon such by statutory majority, respecting this principle;
b. when the above-mentioned slate does not contain candidates not previously elected or, where required, candidates considered independent as per applicable law, the Board of Directors makes the replacement without satisfying the previous point a). by statutory majority;
c. when the above-mentioned slate does not contain candidates not previously elected or, where required, candidates such as to ensure compliance with the applicable gender equality legislation, the Board of Directors makes the replacement without satisfying the previous point a)., as does the Shareholders' Meeting, also by statutory majority.

4.3. COMPOSITION OF THE BOARD OF DIRECTORS (pursuant to Article 123-bis, paragraph 2, letter d), and d-bis), CFA)

The Board of Directors in office was appointed by the Shareholders' Meeting of April 17, 2025 and its mandate concludes with the approval of the 2027 Annual Accounts. It comprises fourteen members, as shown in the table below:

Structure of the Board of Directors whose members were appointed on the basis of slates presented by Shareholders
Office	Member	Year of birth	Date first appoint ment (*)	In office from	In office until	Slate (M/m) (**)	Exec.	Non	Exec. Ind. Code Ind.	CFA	No. of other offices (***)	Attendan ce (****)
Chairperson	Marco Boglione	1956	1999	17/04/202 5	Approv. 2027 accounts	M	X				-	8/8
Non-executive Vice Chairperson	Daniela Ovazza	1956	1999	17/04/202 5	Approv. 2027 accounts	M		X			-	8/8
Chief Executive Officer	Alessandro Boglione	1988	2019	17/04/202 5	Approv. 2027 accounts	M	X				-	8/8
Chief Executive Officer	Lorenzo Boglione	1986	2019	17/04/202 5	Approv. 2027 accounts	M	X				-	8/8
Chief Executive	Maria Boglione	2003	2022	17/04/202 5	Approv. 2027 accounts	M		X				7/8
Chief Executive	Veerle Bouckaert	1966	2019	17/04/202 5	Approv. 2027 accounts	M	X				-	8/8
Non-Executive Independent Director, member of the Remuneration Committee and Chairperson of the Control and Risks and Related Parties Committee	Piera Braja	1964	2022	17/04/202 5	Approv. 2027 accounts	M		X	X	X	5	8/8
Chief Executive	Paola Bruschi	1967	2007	17/04/202 5	Approv. 2027 accounts	M	X				-	8/8
Non-Executive Independent Director, member of the Remuneration Committee and of the Control and Risks and Related Parties Committee	Francesco Calvo	1977	2022	17/04/202 5	Approv. 2027 accounts	m		X	X	X	-	8/8
Non-Executive Independent Director, member of the Control and Risks and Related Parties Committee	Cristiano Fiorio	1972	2019	17/04/202 5	Approv. 2027 accounts	M		X	X	X	-	8/8
Chief Executive	Monica Gamberoni	1968	2022	17/04/202 5	Approv. 2027 accounts	M	X				-	8/8
Chief Executive	Marco Enrico	1987	2025	17/04/202 5	Approv. 2027 accounts	M	X				-	6/6
Non-Executive Director Chairperson of the Remuneration Committee	Carlo Pavesio	1956	1999	17/04/202 5	Approv. 2027 accounts	M		X			3	7/8
Chief Executive	Federico Trono	1973	2019	17/04/202 5	Approv. 2027 accounts	M	X				-	8/8

(*) The first appointment of each Director refers to the date on which the Director was appointed for the first time to the Board of BasicNet S.p.A..

(**) This column indicates whether the slate for each Director is selected from a "majority" slate" - "M", or a "minority" slate - "m".

(***) This column indicates the number of offices a Director or Statutory Auditor holds in other listed companies or large enterprises. (****) This column indicates the number of Board meetings attended by each Director, compared with the total number of meetings held during the year.

The curricula vitae of the Directors in office, which describe their personal backgrounds and professional qualifications, are available on the Company's website at www.basicnet.com/contenuti/gruppo/organisocialisocieta.asp.

The Board of Directors, in its current composition, complies with the "gender quota" rules applicable on the appointment date.

Diversity policies in board composition and company organization

The Company has not adopted specific diversity policies in relation to the composition of the management and control bodies with respect to such aspects as age, gender, disability, educational and professional background, as the statutory and regulatory provisions and the provisions of the by-laws guarantee a sufficiently high level of diversity profiles, and as the slates submitted by Minority and Majority Slates have always featured a broad range of profiles.

For details on the information required by ESRS 2 - Par. 23 regarding the description of how the administrative, management, and supervisory bodies determine whether adequate capacity and skills are available or will be developed to monitor sustainability matters, see the Sustainability Statement, section "GOV-1 The role of the administrative, management and supervisory bodies".

Regarding the seniority of the Board of Directors members: one member is under 30 years old, nine members are between 37 and 59, and four members are over 60.

The management of the corporate organisation, as also stipulated in the Group's Ethics Code, focuses on ensuring equal opportunities and guaranteeing the professional growth of each individual. There is no difference in treatment relating to gender (considering equivalent roles and seniority) or in the composition of the Group's workforce.

The Company believes that the provisions of current legislation, the Ethics Code, and the whistleblowing procedure for reporting alleged wrongdoing and irregularities are valid instruments for the countering of discrimination, including harassment, so as to promote equal opportunity and other solutions in support of diversity and inclusion.

For more details regarding this policy under ESRS - Par. 24, see the Sustainability Statement, sections "S1-1 Policies related to own workforce" and "S1-6 Characteristics of the undertaking's employees".

Maximum number of offices held in other companies

The Board of Directors does not consider it necessary to limit the maximum number of offices which each Director may hold, also in view of the consistently high and fruitful participation of all members at meetings of the Board of Directors.

Induction Programme

The Directors, in practice, have the facility to participate in meetings subsequent to their appointment and during their mandate with the Chairperson and Management, in order to improve their understanding of the organisational structure and corporate processes and to ensure that they remain informed regarding corporate affairs and developments. They also continually have access to financial and operational information from the BasicManagement portal.

4.4. ROLE OF THE BOARD OF DIRECTORS (pursuant to Article 123-bis, paragraph 2, letter d), CFA)

The Board, in managing its own operations, acts in accordance with and applies the provisions of the law and the Company's By-Laws. For this reason and in view of the smooth functioning of Board business, it did not consider it necessary to define any further specific rules. For completeness, the role played by the Board of Directors, even if not formally governed by a specific Regulation, is described below.

The Board of Directors meets whenever the Chairperson deems it to be necessary or appropriate, or when requested by at least two members of the board or by the Board of Statutory Auditors. Meetings may also be held off-site, either in Italy or abroad (Article 14 of the Company By-Laws).

Meetings are to be called by the Chairperson, or by another party vested with such powers, by way of registered mail or electronic mail at least five days prior to the date set for the meeting, unless urgent circumstances make this advance notice impossible.

It is standard practice for the Board of Directors to meet at least five times each year to examine financial performance for the period and to provide updates on the activities conducted by the executive boards. In 2025, the Board of Directors met eight times.

Meetings of the Board of Directors may also be validly held by way of teleconferencing, so long as it is possible to determine the exact identification of the persons entitled to attend may be verified, and for all participants to contribute verbally, in real time, on all matters and to receive and send documents.

Executives of the Company may participate at the Board meetings, on the invitation of the Chairperson, where there is a need to provide guidance on the matters on the Agenda.

The documentation concerning the matters under discussion was made available in advance to the Directors and Statutory Auditors. Since 2019, a dedicated section called "My Documents" has been set up on the corporate website where documents are uploaded for discussion on Agenda items. In accordance with the Code, the Board of Directors, considering the operating dynamics of the Company and the Group, identified the period of two days as appropriate for the sending of preliminary meeting material, except in the cases of urgency, in which case the documentation shall be made available and adequately presented during the meeting. The above-stated deadline for Board meetings was generally met ahead of schedule in 2025.

As mentioned above, the Board held eight meetings in 2025, lasting an average of two hours each.

In January 2026, the Company published its financial calendar, which established the days for the five Board meetings for 2026, for the review of the preliminary results, the approval of the 2025 separate and consolidated financial statements, the approval of the half-year report and the review of the quarterly disclosure to the market. As established by Article 82-ter of the Issuers' Regulation, BasicNet will continue to publish the quarterly results on a voluntary basis, until any differing assessment. During its meeting on October 29, 2020 and in order to provide more complete and timely disclosure, the Board of Directors decided to combine its quarterly reporting on commercial performance with market disclosure regarding movements in its main operating and financial performance indicators, which are constantly monitored by the Group. The quarterly disclosure shall be published in a press release to be issued on conclusion of the Board of Directors' meetings called to approve the above results. Typically on the same day, a conference call is scheduled during which the Investor Relator/Chief Financial Officer/Executive Officer for Financial Reporting explains the data approved by the Board of Directors.

The financial calendar is available on the website www.basicnet.com

On February 12, 2026, the first meeting was held to examine the preliminary 2025 data and review corporate affairs as per Article 150 of the CFA and Article 13 of the By-Laws.

4.5. ROLE OF THE CHAIRPERSON OF THE BOARD OF DIRECTORS

The Chairperson promotes and coordinates the proper functioning of the system of corporate governance in pursuit of the Company's interests.

The Chairperson ensures that the handling of each matter on the agenda is allocated the necessary time and thoroughness to allow for constructive debate, also encouraging discussion among the Board as a useful contribution for the decisions to be made, including by providing information prior to the meeting, as further detailed in the previous point. The Chairperson also ensures the efficacy of the Agenda of Board meetings, adapting the length of discussion to the importance of the items to be discussed.

Secretary to the Board of Directors

A Secretary to the Board of Directors is appointed by the Board of Directors in order to help organise the Board's activities. This Secretary may be selected from among the members of the Board of Directors, employees of the Company, or other individuals from outside the Company.

The Secretary (generally the Corporate Affairs manager) supports the activities of the Chairperson, in particular in the preparation of board and Shareholders' Meetings, in the drafting of the relevant motions, in ensuring the adequacy, completeness and clarity of the information flows to the Board, in the communication with the Directors.

The Secretary assists the Chairperson in relations with the Board and provides impartial assistance and advice to the Board of Directors on any aspect relevant to the proper functioning of the corporate governance system.

The Secretary also coordinates the activities of the Internal Board Committees and provides related support.

The Secretary drafts the minutes of each Board meeting, signs them along with the Chairperson, and ensures that they are archived in the Company's records.

4.6. EXECUTIVE DIRECTORS

The Chairperson and Chief Executive Officers

The Shareholders' Meeting of April 17, 2025 confirmed Marco Boglione as the Executive Chairperson of the Board of Directors. On the same date, the Board of Directors appointed Daniela Ovazza - Non-Executive Vice-Chairperson and Lorenzo and Alessandro Boglione - Chief Executive Officers.

In accordance with Article 13 of the By-Laws, the Vice-Chairperson executes the role of Chairperson in the case of the latter's temporary absence or unavailability.

The Board of Directors meeting of April 17, 2025 delegated to the Chairperson all powers for ordinary and extraordinary administration with sole signature, within a limit of Euro 4 million for the acquisition and/or sale of quotas or shares in companies, enterprises, business units or brands, Euro 5 million with reference to the annual cost of sponsorship contracts and financial debt transactions with a value within a limit of 60% of the consolidated equity, and Euro 4 million for the granting of all secured and unsecured guarantees and third-party interest patronage letters (with the exception of the subsidiary companies).

The decision to grant executive powers to the Chairperson, the founding member of the Group, is an acknowledgement of the central importance of the role to the sustainability of the Company. There is no doubt that he still plays a role in the design of the Company's strategic interest and in inspiring, guiding and coordinating the actions and behaviours for achievement of the objectives.

At the same meeting, the Board of Directors delegated:

− to the Chief Executive Officers Lorenzo Boglione and Alessandro Boglione, severally, all powers for ordinary and extraordinary administration with sole signature, within a limit of Euro 3 million for the acquisition and/or sale of quotas or shares in companies, enterprises, business units or brands, Euro 3.5 million with reference to the annual cost of sponsorship contracts and financial debt transactions with a value within a limit of 50% of the consolidated net equity, and Euro 3 million for the granting of all secured and unsecured guarantees and third-party interest patronage letters (with the exception of the subsidiary companies);
− to the Director Marco Enrico, as Group Finance Director, the role of Executive Officer for Financial Reporting, and powers for the administrative and financial management of the Company.
− See paragraph 6 below for information concerning the appointment of the internal Board committees.

Executive Committee (pursuant to Article 123-bis, paragraph 2, letter d), CFA)

The Board of Directors did not set up an Executive Committee.

Reporting to the Board

The executive boards reported to the Board and the Board of Statutory Auditors at their meetings, on a quarterly basis, with regards to the activities carried out in the exercise of their powers, on the general operating performance and the outlook and also on the most significant operations undertaken by the Company and its subsidiaries.

Other Executive Directors

As of today, in addition to the Chairperson Marco Boglione, the following are Executive Directors: Chief Executive Officer Alessandro Boglione (also Chairperson of the Board of Directors of Kappa S.r.l., KappaRetail S.r.l, Kappa France S.a.s., Sebago S.r.l., SebagoRetail S.r.l., K-Way Retail Suisse S.A., SupergaRetail S.r.l., BasicNet Asia Ltd. and Tow S.p.A., and Chief Executive Officer of BasicItalia S.r.l. and Superga S.r.l, and Executive Director of K-Way S.p.A., Woolrich Europe S.p.A. and Sundek S.p.A., and member of the Strategic Committee of K-Way France S.a.s)., Chief Executive Officer Lorenzo Boglione (also Chairperson of the Board of Directors of Superga S.r.l, BasicAir S.r.l. and K-Way S.p.A., Chief Executive Officer of Sebago S.r.l. and Tow S.p.A., Chief Executive Officer of Kappa S.r.l., Woolrich Europe S.p.A. and Sundek S.p.A., Chairperson of Basic Properties America Inc. and member of the Strategic Committee of K-Way France S.a.s.), Director Federico Trono (also Chairperson of the Board of Directors of K-Way Topco S.r.l and K-Way Midco S.p.A., Chief Executive Officer of Kappa S.r.l. and Kappa France S.a.s., Sole Director of GLD Brands Limited, Director of BasicNet Asia Ltd. and member of the Strategic Committee of K-Way France S.a.s.), Director Marco Enrico, Group CFO (also Sole Director of BasicInvestments S.r.l., Executive Director of Kappa S.r.l., Sebago S.r.l., Woolrich Europe S.p.A. and Sundek S.p.A., Director of K-Way S.p.A., K-Way Topco S.r.l, K-Way Midco S.p.A., Woolrich Footwear S.r.l., Woolrich Germany GmbH, Woolrich France and Woolrich Netherlands) the Director Paola Bruschi (Executive Director of Superga S.r.l., K-Way Topco S.r.l. and K-Way Midco S.p.A.).

Veerle Bouckaert, Head of Legal Affairs (also Executive Director of Kappa S.r.l., Sebago S.r.l. and Superga S.r.l.), is also an Executive Director.

For details on the information required by ESRS Principles 2 - Par. 19 and 20(b) and 22 regarding the roles and responsibilities of the Boards of Directors and management in overseeing the procedures designed to manage material risks, impacts and opportunities, see the Sustainability Statement, sections "SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model" and "IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities".

4.7. INDEPENDENT DIRECTORS

The Board of Directors includes three Independent Directors: Piera Braja, Francesco Calvo and Cristiano Fiorio.

Once each year, and upon the appointment of new members, the Board assesses the independence of its members based on the circumstances defined in the CFA and in the Corporate Governance Code.

At its meeting on March 11, 2026, the Board of Directors, assessed, on the basis of their declarations, the independence of the aforementioned Directors.

As stated in the report to the Shareholders' Meeting called for the approval of 2025 Annual Accounts, the Board of Statutory Auditors has verified the correct application of the criteria and procedures adopted by the Board of Directors to assess the independence of its members.

5. MANAGEMENT OF CORPORATE INFORMATION

The Board approved the procedure for the handling of confidential information, subsequently updated with the regulations on Market Abuse. The policy was updated on February 19, 2018, incorporating the Guidelines upon the management of inside information published by Consob in October 2017.

This procedure contains the regulations for the internal management and external communication of confidential documents and inside information, for the management of delayed disclosure, in addition to the setting up and management, based on a specific IT procedure, of the Register for persons with access to inside information and a Register of persons possessing "relevant information".

Since April 1, 2006, the Internal Dealing Code has been applicable, updated in 2016 to incorporate new provisions of the Regulation of the European Parliament and Council of April 16, 2014 No. 596/2014, and subsequently in 2024 to implement the provisions of the "Capital Decree". The Code governs the procedures for disclosure to the market on operations on BasicNet S.p.A. shares by "Significant Persons" of the Group, as identified by Article 114 and thereafter of the CFA.

The procedure is available on the website: www.basicnet.com/contenuti/gruppo/internaldealing.asp. No Internal Dealing communications were received during 2025.

6. INTERNAL COMMITTEES TO THE BOARD (pursuant to Article 123-bis, paragraph 2, letter d), CFA)

The Board meeting of April 17, 2025 appointed the Remuneration Committee and the Internal Control and Risks Committee, which continued to act also as the Related Party Transactions Committee.

It is standard practice for the committees to meet when called by the committee Chairperson, in coordination with the Company's Corporate Affairs function. All committee members have access to the company information needed for their activities. Materials regarding the items on the agenda for the Committees are published on the company website in a dedicated section called "My Documents", by the Corporate Affairs function, at least two days prior to the meeting, unless otherwise established (in the procedure for the examination of related party transactions, documentation must be provided at least 15 days prior to the meeting at which the Committee is called to express its opinion on a specific transaction). The minutes of the Committee meetings are prepared by the respective Chairpersons and are archived in the respective minute books by the Corporate Affairs unit.

The average length of committee meetings is one hour thirty minutes for the Control and Risks and Related Parties Committee and one hour for the Remuneration Committee.

B.o.D.			Control and Risks and Related Parties Committee	Remuneration Committee
Office	Member		(*) CRC RPC		(*)	(**)
Independent Non-Executive Director as per CFA and Corporate Governance Code (reconfirmed by BoD on April 17, 2025)	Piera Braja	6/6	4/4	C	4/4	M
Independent Non-Executive Director as per CFA and Corporate Governance Code (reconfirmed by BoD on April 17, 2025)	Francesco Calvo	6/6	4/4	M	4/4	M
Independent Non-Executive Director as per CFA and Corporate Governance Code (reconfirmed by BoD on April 17, 2025)	Cristiano Fiorio	6/6	4/4	M	4/4	M
Non-Executive Director (reconfirmed by BoD on April 17, 2025)	Daniela Ovazza	-	-		4/4	M
Non-Executive Director (reconfirmed by BoD on April 17, 2025)	Carlo Pavesio	-	-		4/4	C
Number of meetings held in the year:			4		4

STRUCTURE OF THE INTERNAL BOARD COMMITTEES AT YEAR-END

KEY

Office: Office within the Board of Directors.

(*) This column indicates the attendance of the Director in relation to the Committee meetings (indicates the number of meetings attended compared to the total number of meetings for the duration of the appointment.).

(**) This column indicates the position of the Director on the Committee: "C": Chairperson; "M": member.

7. SELF-ASSESSMENT AND SUCCESSION OF DIRECTORS - APPOINTMENTS COMMITTEE

The Board of Directors considers that the choice of appropriate professionals to sit on the Board of Directors is the duty of the shareholders - both minority and majority - on the basis of the slates presented.

8. DIRECTORS' REMUNERATION - REMUNERATION COMMITTEE

For further information on the present section reference should be made to the Remuneration Policy and Report published pursuant to Article 123-ter of the CFA.

8.1. REMUNERATION OF DIRECTORS

Remuneration Policy

On March 11, 2026, the Board approved the Report, which is available on the company website, together with the Shareholders' Meeting documentation, at www.basicnet.com/contenuti/datifinanziari/assembleeazionisti.asp

The Group recognises the central importance of human resources, in the firm belief that the principal factor determining the success of the business is the individual acting in an environment which supports professional and human growth. In this context, BasicNet's Remuneration Policy is determined by taking into consideration aspects of the compensation and working conditions of the Company's employees. Both respond to the aim of attracting, retaining and motivating human resources with the necessary skills to oversee and develop the Company's activities and to lay the foundations to pursue the long-term interest and sustainability of the Company.

Employees and collaborators are offered opportunities for growth based on merit, professional skills and participation in the company's development processes, including through an automatic, scheduled system that allows periodic performance evaluation and position review.

In line with BasicNet's philosophy, employees' working conditions play a decisive role, alongside compensation, in fostering a sense of belonging to the Group and building corporate identity, which in turn is recognised as a critical success factor. Working activities are carried out at the BasicVillage, designed to put the person at the centre, who can enjoy a series of services and recreational spaces.

Additional information about BasicNet's policies regarding the management of social and Human Resources-related issues can be found in the Consolidated Sustainability Statement, included in the Directors' Report, published at www.basicnet.com, Financial data/Financial Statements section.

The Remuneration Policy adopted for the corporate boards requires the Shareholders' Meeting to approve the annual remuneration of all Board of Directors and Statutory Auditors members; the remuneration of the Senior Directors and the members of the Internal Board Committees is determined by the Board of Directors, pursuant to Article 2389 of the Civil Code, having heard the opinion of the Remuneration Committee and considering the advice (where necessary) of the Related Parties Committee and the Board of Statutory Auditors. The compensation of Senior Executives is proposed by the Chairperson and submitted to the Board of Directors for approval, after consultation with the Remuneration Committee. Finally, the Remuneration Committee and the Related Parties Committee shall intervene in cases where the allocation of remuneration does not comply with, but deviates from, the Remuneration Policy most recently approved by the Shareholders' Meeting. The remuneration comprises:

• a fixed remuneration, commensurate with responsibilities and deemed appropriate to remunerate the skills, experience and commitment associated with the position held by each Director/Senior Executive. The fixed component is adequate to remunerate the performance of the Director with delegated powers/Senior Executive in line with the responsibilities of his/her office. These fixed fees have been updated to reflect the increased powers and responsibilities of certain Directors within the Group;

• for the Executive Directors of BasicNet there is no variable component in the contractual remuneration structure. The Board of Directors, on the proposal of the Chairperson, after consultation with the Remuneration Committee and the opinion of the Related Parties Committee and the Board of Statutory Auditors, reserves the right to establish an additional one-off bonus, based on results achieved or on the completion of corporate transactions to the sustainable success of the Group, or for retention purposes.

Executive Directors are eligible for the 2024-2027 Stock Grant Plan approved by the shareholders on April 16, 2024. The maximum number of shares that can be allocated to the beneficiaries is 2,000,000 (two million) and their related targets will be determined by the Board of Directors, in accordance with the provisions of the relevant Regulations approved by the Board at their meeting of February 12, 2025. In that same meeting, the Board of Directors conferred on the Vice-Chairpersons of the Board of Directors, severally, with the power for this purpose to appoint proxies, all powers necessary to specifically identify the beneficiaries of the plan and the related conditions for the vesting of rights, in accordance with the criteria set out in the Regulations. This is without prejudice to the Board's purview where the beneficiary is a member of the Board of Directors.

For the purposes of the Remuneration Policy, the Board of Directors has identified BasicNet S.p.A.'s Executive Directors who also hold executive positions in its subsidiaries as Senior Executives.

Within the context of the acquisition by Permira Strategic Growth Topco S.à r.l. RAIF of a minority interest in K-Way S.p.A., agreements have been made regarding the selection of management of the K-Way Group companies and their relative remuneration. The agreements include a fixed fee and variable remuneration. In terms of the latter, annual financial MBOs targets have been set and consist of the achievement of certain levels of sales, EBIT and financial position (representing 50% of the MBO) and personal targets (representing 50% of the MBO) determined by the Board of Directors of K-Way S.p.A. The total amount of the bonus shall not exceed 30% of the fixed gross annual salary for the relevant year.

The remuneration policy adopted by BasicNet does not include specific incentive schemes and remuneration policies linked to sustainability matters for members of its administrative, management and supervisory bodies.

The Board also establishes the remuneration of the Supervisory Board and of the Executive Officer for Financial Reporting.

A third-party D&O - Directors' & Officers' Liability civil liability policy in addition covers the Directors, Statutory Auditors and Executives for circumstances relating to the exercise of their functions, excluding incidences of fraud. This concerns insurance cover (structurally not consisting of consideration) signed independently of the Company for the benefit of all Group Directors and Statutory Auditors in office.

Indemnity of the Directors in case of dismissal and termination of employment following a public tender offer (pursuant to Article 123-bis, paragraph 1, letter i), CFA)

The disclosures required by Article 123-bis, paragraph 1, letter 1) ("the agreements between the Company and Directors – which provide for indemnity in the case of dismissal without just cause or in the case in which the employment services cease after a public offer") are contained in the Remuneration Policy and Report published pursuant to Article 123-ter of the CFA, available on the Company's website http://www.basicnet.com/contenuti/datifinanziari/assembleeazionisti.asp?menuSelectedID=4 ?

8.2. REMUNERATION COMMITTEE

Composition and Operation of the Remuneration Committee (pursuant to Article 123-bis, paragraph 2, letter d) CFA)

At its meeting on April 17, 2025, the Board confirmed the composition of the Remuneration Committee in the persons of Non-Executive Directors Carlo Pavesio (Chairperson) and Daniela Ovazza and Non-Executive and Independent Directors Piera Braja and Francesco Calvo as described in the table in Par. 6 of the Report above. Committee meetings may be attended, as is generally the case, by members of the Board of Statutory Auditors. The workings of the Committee are usually recorded by the Chairperson Carlo Pavesio, who reports to the Board of Directors at the first available meeting.

The Committee makes proposals to the Board concerning the remuneration policy, also taking into account the vote expressed by the Shareholders' Meeting; periodically assesses - when preparing the annual remuneration report - the adequacy of the general policy adopted for the remuneration of Executive Directors and Senior Directors; submits proposals to the Board concerning the remuneration of Senior Directors and expresses its opinion on the remuneration issues of Executive Directors and Senior Executives; examines the remuneration proposals and expresses its opinion in case of exceptions to the remuneration policy approved by the Shareholders' Meeting.

The Committee has access to the information and departments necessary for the carrying out of its remit.

In 2025, the Committee met to review the draft Remuneration Report to be submitted to the Shareholders' Meeting; the proposal to award an extraordinary bonus in connection with the acquisition by Permira Strategic Growth Topco S.à r.l. RAIF of a minority stake in K-Way S.p.A. to the Chairperson, Vice Chairpersons, Chief Executive Officer, certain Executive Directors and a number of Group employees who have contributed to the development of the K-Way brand; the proposal regarding remuneration due to Senior Directors following their renewal/appointment and the allocation of Stock Grants related to the "2024-2027 Stock Grant" Plan to certain members of the Board of Directors and other employees of the company and the Group. Finally, it met in late December to consider the award of special remuneration to a Woolrich Director who also sits on the BasicNet Board.

The meetings were attended by members of the Board of Statutory Auditors.

9. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM - CONTROL AND RISKS COMMITTEE

The Internal Control and Risk Management System consists of a set of rules, procedures and organisational structures aimed at the effective and efficient identification, measurement, management and monitoring of the main risks, in order to contribute to the sustainable success of the Company.

The Board of Directors establishes its guidelines in line with the Company's strategy, periodically verifying their adequacy and effective functioning, ensuring that the principal corporate risks are identified and adequately managed.

This activity is carried out with the support of a number of boards, corporate structures and functions which, each according to their own areas of competence, oversee the identification, monitoring and management of risks and which together make up the Internal Control and Risk Management System. The individuals involved are the Director in charge of the Internal Control and Sustainability System, who is also the COO (Chief Operating Officer), the Control and Risks and Related Parties Committee, the Internal Audit Manager, the control body, and the Supervisory Board.

An Internal Control System on sustainability reporting, necessary following the entry into force of the CSRD, has been established to ensure compliance with the reporting requirements of the new ESRS.

For the disclosures required by ESRS 2 - Par. 22(a) and 22(d), 24 and 26 regarding the roles and responsibilities of the administrative and management bodies overseeing procedures to manage material risks, impacts and opportunities, as well as how the administrative and management bodies are informed on sustainability matters, in addition to that stated in this Report, see the Sustainability Statement, sections "GOV-1 The role of the administrative, management and supervisory bodies" and "GOV-2 Information provided to and sustainability matters addressed by the undertaking's administrative, management and supervisory bodies" and to par. 4.1 of the Report.

For details on the information required by ESRS Principles 2 - Para. 19 and 20(b) and 22 regarding the roles and responsibilities of the Boards of Directors and management in overseeing the procedures designed to manage material risks, impacts and opportunities, see the Sustainability Statement, sections "SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model" and "IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities".

For details on the information required by ESRS Principles 2 - Par. 36 regarding the main features of internal control and risk management systems, see the Sustainability Statement, section [GOV-5] "Risk management and internal controls over sustainability reporting".

The Ethics Code and the Code of Conduct for Sourcing Centres, which include social compliance principles, together with the organisation, management and control model as per Legislative Decree No. 231/2001 (including the procedure for reporting alleged unlawful acts and irregularities - so-called whistleblowing) and subsequent amendments, are an integral part of the Internal Control and Risk Management System.

With regard to the assessment of the Internal Control and Risk Management System, the Board of Directors, at its meeting on March 11, 2026, confirmed the adequacy of the organisational, administrative and accounting structure of the Company and its "strategically significant" subsidiaries, prepared by the Chief Executive Officers, with particular reference to the control and risk system and general operating performance.

9.1. CHIEF OPERATING OFFICER

The Director Paola Bruschi was appointed as Director in Charge of the Internal Control and Sustainability System. In that role, she is therefore responsible for identifying the Company's primary risks - taking account of the characteristics of the activities conducted by the Company and by its subsidiaries - for the planning, realisation and management of the Internal Control and Risk Management System, constantly verifying its adequacy and efficiency, and adapting it to changes in operating conditions and legal and regulatory frameworks. Furthermore, she is responsible for co-ordinating the Sustainability Statement preparation process, managing reporting activities and sustainability initiatives at the Group level. Paola Bruschi has entrusted the head of the Internal Audit function with the task of carrying out checks on specific operational areas and on compliance with internal rules and procedures in the execution of corporate transactions; these checks have been included in the Audit Plan examined by the Control and Risks Committee and approved by the Board of Directors.

9.2. CONTROL AND RISKS AND RELATED PARTIES COMMITTEE

Composition and operation of the Control and Risks Committee (pursuant to Article 123-bis, paragraph 2, letter d) CFA)

The Control and Risks Committee was appointed at the Board meeting of April 17, 2025. The Committee is composed of three Independent and Non-Executive Directors: Piera Braja (Chairperson), Francesco Calvo and Cristiano Fiorio, as described in the table in Par. 6 of the Report above. The Board deems that the members have adequate expertise in the Company's business sector in order to assess related risks, and in accounting and finance and risk management.

Control and Risks Committee Functions

The Committee supports through an adequate preliminary activity the assessments and decisions made by the administrative body concerning the Internal Control and Risk Management System, in addition to the activities relating to the approval of periodic financial and non-financial reports.

In 2025, the Committee met 10 times with an average meeting duration of two hours and 30 minutes. During the year, the meetings of the Control and Risks and Related Parties Committee were attended by the members of the Board of Statutory Auditors, the Chief Financial Officer and Executive Officer for Financial Reporting, the Director responsible for the Internal Control and Sustainability System, the Internal Audit Manager, the Chairperson and members of the Supervisory Board and the company appointed to audit the Group's accounts.

The workings of the Committee are usually recorded by the Chairperson Piera Braja, who reports to the Board of Directors at the first available meeting.

During the meetings, the Committee:

met periodically with the Internal Audit Manager, reviewed the Internal Audit Plan and periodic reports;
examined the reports of the Supervisory Board and acknowledged the evaluations expressed with regard to updating the 231 Model, the absence of censurable events or violations of the Organisational Model or of the provisions contained in Legislative Decree No. 231/2001;
carried out the activities within its remit relating to financial disclosure as regards the Financial Statements at December 31, 2025, meeting with the Executive Officer for Financial Reporting and the independent audit firm in the presence of the Board of Statutory Auditors. This sought to assess the correct use and uniformity of the accounting standards adopted in preparing the financial statements and the consolidated financial statements for 2025, expressing a favourable opinion on approval of the accounting documents to the Board of Directors;

reviewed during the year the preliminary activities for the assessment, design and implementation of the actions necessary for the evolution and adaptation of reporting according to the obligations of Directive No. 2022/2464 - Corporate Sustainability Reporting Directive - CSRD and the Italian implementing legislation, Legislative Decree No. 125 of September 6, 2024;
received information on the Double Materiality assessment and the methodological and procedural profiles adopted, aimed at defining the relevant material aspects, as well as the planning of activities necessary for the preparation of the Sustainability Statement;
examined, at the meeting held on March 10, 2026, with the support of the consultant appointed by the Company, the Sustainability Statement 2025; took note, at the meeting held on the same date, of the verifications conducted by the independent audit firm EY S.p.A. as the external auditor in charge of certifying the compliance of the Sustainability Statement in accordance with Legislative Decree No. 125/2024, for the purpose of issuing its Limited Assurance; at the conclusion of these analyses, the Committee finally issued a favourable opinion on the approval of the Sustainability Statement by the Board of Directors;
monitored compliance with the Related Parties Procedure and expressed opinions where requested, regarding less significant transactions and the awarding of extraordinary remuneration to Senior Executives;
monitored the Group's compliance with the European NIS2 regulation, assessing initiatives to strengthen cyber security and cyber risk management.

9.3. INTERNAL AUDIT MANAGER

The task of verifying the operation, consistency and suitability of the Internal Control and Risk Management System is entrusted to the Appointee of the Internal Audit function. In particular, considering that some activities are centralised at the Parent Company, this function contributes to verifying the regularity and functionality of the information flows coming from the subsidiaries with strategic relevance, as well as verifying the adequacy of the information systems to ensure the quality of the reporting information of the various company functions.

The Internal Audit Manager, who does not report to any operating department, has access to all information considered necessary to carry out the role. S/he reports on his/her activities to the Board of Directors, the Control and Risks Committee and the Board of Statutory Auditors, to which the periodic reports are addressed, and at Committee meetings.

Control activities are carried out on the basis of the annual audit plan approved by the Board of Directors, which is risk-based in nature, and verification activities are also carried out through an online reporting tool available on the corporate portal. This report constitutes an important monitoring instrument in real-time of the accounting activities and business performance: the data is available for each Group company and analysed by individual account item.

Internal Audit assesses the adequacy of the IT systems and the reliability of information available in view of the complexity of the operating environment, the size and the territorial reach of the company and verifies the adequacy of the organisational processes adopted by the Company for the security of the IT system. S/he collaborates with the other actors involved in issues of compliance and risk management, in order to monitor the exposure level and vulnerability of the Company to risks. The Internal Audit function was entrusted to an external company (Progesa S.a.s.), assisted by support activities that focused on process design. The activities were outsourced as it was considered that the head of the company, who has already undertaken work within the Group, possesses the necessary attributes to undertake such work efficiently on an independent and professional basis.

The Appointee of the Internal Audit function prepared periodic reports on the activities carried out in accordance with the Plan and their outcome, providing a positive assessment to the control body, the Control and Risks Committee, the administrative body and the Director responsible for the Internal Control System and Sustainability on the suitability of the Internal Control and Risk Management System.

9.4. ORGANISATION MODEL PURSUANT TO LEGISLATIVE DECREE No. 231/2001

The Board of Directors at the meeting of April 17, 2025 appointed the members of the Supervisory Board. The Supervisory Board is tasked with overseeing the correct functioning of the Model and updates. The Supervisory Board reports on at least a half-yearly basis to the Control and Risks Committee and to the Board of Statutory Auditors.

As part of the Internal Control and Risk Management System, the Parent Company BasicNet S.p.A. and the proprietary companies of the Brands Kappa S.r.l., K-Way S.p.A., Superga S.r.l., Sebago S.r.l., Woolrich Europe S.p.A., BasicItalia S.r.l. and Basic Village S.p.A. have adopted an "Organisation and management model as per Legislative Decree No. 231/2001" (hereinafter also the "231 Model"), which is continually updated in line with the introduction of new offences under the framework regulation and the application of which is monitored by the respective Supervisory Boards.

The provisions of the Model complete the Group Ethics Code and the Code of Conduct for Sourcing Centres, which set out the rules and ethical responsibilities for the conducting of business and relations between the Company and the various interest holders.

To promote awareness of and respect for the Ethics Code and the organisation and control model these have been published on the Company's website at https://www.basicnet.com/contenuti/gruppo/modello231.asp?idcompany=29&menuSelectedID=2f and www.basicnet.com/contenuti/corporate/codiceetico.asp, respectively, and on the BasicGuys platform (attendance tracking system) reserved for Group staff.

In preparing the Model, account was taken of the existing and operating control systems and policies at the Company and considered an integral part of the Model: the Internal Dealing Code and the Related Party Transactions Policy. The model, continually evolving, integrates and strengthens the corporate control system through the preparation and continual updating of the related procedures. It also provides for a disciplinary system which appropriately sanctions non-compliance with the measures and principles contained in the above-stated documents.

In 2025, the Organisation Model was updated in implementation of the new offence provisions.

The update of the Model also involved a review of the risk areas for commission of offences, and the related processes and controls, also considering the conclusion of the Group's reorganisation.

The Whistleblowing Procedure, which is an integral part of the Model and is available on the corporate website, identifies in detail the whistleblowing channels, the steps involved in submitting a whistleblowing report, the confidentiality of the information, the guarantees of non-retaliation and the whistleblowing management process. No reports were received in 2025.

In 2025, the Supervisory Board met three times.

Ethics Code

The Ethics Code is presented on a video to all new employees of the Group and to all consultants.

The BasicNet Group Ethics Code was updated and approved, in its latest version, by the Board of Directors at the meeting of October 2017.

The Code is designed to control the conduct of the addressees, identified as the members of the Boards of Directors and Boards of Statutory Auditors, in addition to all BasicNet Group personnel, collaborators and consultants, suppliers and all others acting in the performance of name of and/or on behalf of the BasicNet Group.

As reported in this document, the BasicNet Group, in pursuing its objectives, considers a number of conduct principles as critical, including:

a commitment to internally and externally comply with the laws applicable in the states in which operations are carried out, in addition to the ethical principles of transparency, correctness and fairness in the conducting of business;

to refrain from illegal or improper conduct (against the community, the public authorities, clients, personnel, investors and competitors) in the pursuit of business objectives;
to establish organisational tools to prevent the violation of the principles of legality, transparency, correctness and fairness by personnel and collaborators and oversee compliance with these principles;
to assure the market, investors and the community in general, while protecting the competitivity of the respective businesses, of full transparency in operations;
to commit to the promotion of fair competition in support of its interest and that of all market operators and the stakeholders in general;
to pursue excellence and market competitiveness, offering clients high quality services which efficiently meet their demands;
to protect and support personnel;
to responsibly employ staff with a view to sustainable development, respect for the environment and the rights of future generations;
to protect workplace health and safety conditions and consider human rights as a fundamental aspect of business activity.

The Group does not justify in any way the adoption of conduct conflicting with law and these principles.

In this regard, the Supervisory Board oversees compliance with the Ethics Code, promptly reporting to the Control and Risks Committee and the Board of Directors any violations thereof. All stakeholders may report, in compliance with the procedure for reporting alleged offences and irregularities, known as whistleblowing, any violation or suspected violation of the Ethics Code to the Supervisory Board. Violations of the principles of the Ethics Code, where verified, will result in sanctions.

To promote awareness of and respect for the Ethics Code and the Organisation and Management model pursuant to Legislative Decree No. 231/2001, these have been published on the Company's website at the addresses indicated above and on the BasicGuys platform (attendance tracking system) reserved for Group staff.

Code of Conduct for Sourcing Centres

The Code of Conduct for Sourcing Centres is a document that establishes the minimum requirements for the working conditions that must be met by all Sourcing Centers selected by the BasicNet Group or by affiliated companies. The Group undertakes to ensure that each stage of the production chain fully complies with the principles and conditions of the Ethics Code. Sourcing Centres are therefore at all times held accountable for suppliers' full compliance with the principles of the Ethics Code.

Through the Code, BasicNet encourages its business partners to adopt the highest international standards of ethics and best practices in business. Respect for human rights and international labour standards – including the fundamental conventions of the International Labour Organization and the Universal Declaration of Human Rights – were taken as an inspiration and foundation, and many of the guidelines included in the Ethics Code were based on them. BasicNet reserves the right to stop doing business with Sourcing Centres that are incapable of complying – or reluctant to do so – with the principles and conditions enshrined in the Ethics Code.

The principles cited in the Code of Conduct for Sourcing Centres include:

a ban on the use by Sourcing Centres of child labour (under the age of 16) and an incentive for them to verify the age of their workers, keep proof of such verification and comply with all laws and regulations governing working hours and general labour conditions;
a ban on the use by Sourcing Centres of involuntary labour, defined as work or service done by any person under threat, subject to penalty in the event of non-compliance, where a worker does not offer service voluntarily, a category that includes mandatory, forced prison labour under a binding contract;
a ban on the use by Sourcing Centres of corporal punishment or any other form of intimidation or physical or mental coercion of its workers;

a requirement that Sourcing Centres comply with all laws and regulations applicable to the conduct of their business, including the principles set out above. All references to "applicable laws and regulations" in the Code of Conduct extend to national and local codes, rules and regulations, as well as to voluntary Treaties relevant to the sector.

Other principles enunciated in the Ethics Code of Conduct that the Sourcing Centres are required to guarantee include non-discrimination, the protection of health and safety, environmental protection and freedom of association. BasicNet is committed to full and complete compliance with laws and regulations applicable to its business activity and expects that Sourcing Centres will co-operate fully and with due diligence in implementing this commitment.

To guarantee awareness of the Ethics Code, Sourcing Centres are required to take appropriate measures to ensure that workers familiarise themselves with the contents of the Ethics Code and to post the Ethics Code, translated into the workers' local language, at each production facility in a highly visible location readily accessible to all workers. Sourcing Centres are also required to select their suppliers carefully and only to do business with suppliers that ensure respect for human rights and full compliance with the principles enshrined in the Ethics Code. To ensure compliance, BasicNet is authorised to audit Sourcing Centres by conducting scheduled or unscheduled inspections of Sourcing Centres' facilities aimed at monitoring compliance with the Ethics Code. During such inspections, BasicNet and its representatives may examine books and registers relating to employees and conduct private interviews of the Sourcing Centre's employees. If a violation is found to have been committed, BasicNet and the Sourcing Centre are required to agree on a Corrective Action Plan aimed at remedying the violation promptly. If a Sourcing Centre commits repeated and/or deliberate violations of the Ethics Code, BasicNet may take the necessary corrective measures, up to and including the cancellation of orders and/or termination of business arrangements with the Sourcing Centre concerned.

Conflicts of interest and prevention of bribery and corruption

The Company adopted as per Legislative Decree No. 231/2001 an Organisation Model and specific internal procedures to establish ethical rules and responsibilities in the conduct of its business and in dealings with its various stakeholders (there are, for example, specific procedures for proper management of dealings with the public administration and the European Union). In particular, operations are governed by procedures organised in a way that ensures that there is effective oversight by the individual company units (".com") concerned. With particular reference to the public sector (and the European Union), in Italy and other countries, the Group always ensures clear, transparent and ethical relations. As stated in the Ethics Code, addressees of the Code are required to refrain from improperly influencing the decisions of the public sector by offering money or other benefits, such as employment or commercial opportunities in favour of public officials or those providing a public service, in addition to their family members. The Group companies may not provide direct or indirect contributions of any type, nor set up funds in support of public officials, except where permitted and in accordance with applicable law and regulations and on the condition that (i) they are properly approved by the competent company functions, (ii) they are properly documented from an accounting and operating viewpoint, (iii) they do not put anyone in a position of conflict of interest. Untruthful statements may not be made to national or EU public bodies for the awarding of public funds, public grants or subsidised financing, or to obtain concessions, permits, licenses or other administrative acts for the benefit of the Group. Neither is it permitted to mislead, by artifice or deception, the public sector to obtain an unfair profit for the Group to the detriment of the public sector. The direction of funds received from national or EU authorities as disbursements, contributions or financing for objectives other than those intended is forbidden, or to utilise them in violation of the applicable regulations and rules. The altering of computer or IT systems or the manipulation of data contained therein in order to obtain unjust profit and causing damage to the Public Administration is prohibited. In commercial relations with the Public Administration, including participation in public tenders, conduct should always be in compliance with law and proper commercial practice, while conduct which is undertaken to induce the committal of an offence in seeking advantage for the Group is expressly prohibited.

The financial reports, financial statements and corporate communications required by law and regulations should be prepared with clarity and present a true and fair view of the Group company financial statements, without omitting any important or significant information. No payments (in any form) may be made in the interest of the Group in the absence of corresponding adequate documentation. Related party transactions, including inter-Company transactions, should comply with the criteria of substantial and procedural correctness. Those undertaking transactions in conflict of interest are required to report such to their superior or in accordance with that set out in the adopted procedures. The internal control system concerns the control activities undertaken to protect company assets, effectively manage operations and clearly provide information on the Group financial statements, in addition to those activities undertaken to identify and contain company risks.

In addition, the Group operates in compliance with applicable anti-money laundering regulations and the provisions issued by the Competent Authorities and for such purposes commits to refraining from undertaking suspect transactions from a correctness and transparency viewpoint. Similarly, the Supervisory Board deemed it appropriate to supplement the Special Section of the relative Organisational Models with the offence of "fraudulent transfer of valuables", as specified under Article 512-bis of the Penal Code, introduced as a predicate offence under the administrative liability of legal entities pursuant to Legislative Decree No. 231/2001.

As part of its efforts to prevent acts of corruption and bribery committed by or targeting Group personnel, the Group complies scrupulously with Italian and international legislation and has adopted a Legislative Decree No. 231/2001 Organisation Model that establishes the general principles of the fight against bribery and corruption. All company activities and units are subject to the controls and verification relating to bribery and corruption mandated by the 231 Model.

Following the enactment of the new offence of "corruption between individuals" punished under paragraph three of Article 2635 of the Civil Code, the Supervisory Board decided to modify the Legislative Decree No. 231/2001 Organisation Model so that management of the sales process was considered to be one of the Group's "sensitive" activities, especially as regards:

authorisation powers within the process;
setting the price of sale;
setting payment conditions and terms;
setting client discounts;
managing the tills of directly operated stores;
managing returns.

It is therefore forbidden to offer, promise or give undue money or other benefits to Directors, General Managers, Executive Officers for Financial Reporting, Statutory Auditors, liquidators - or those subject to the management or supervision of those individuals - to incite them to perform or not perform an act which violates the obligations of their office or obligations of loyalty.

Training on corruption and bribery is extended to the entire organisation, regardless of an individual's role or function. The functions identified as potentially at risk are covered by training programmes, thereby reinforcing a systemic approach to corruption prevention and integrity within the organisation.

In addition, a clause upon anti-corruption practices is present in the licensing contracts of all Sourcing Centres and Licensees (respectively Sourcing Agreements and Distribution Agreements).

For the information required by ESRS G1 principles related to business conduct, see the Sustainability Statement, sections "G1-1 Corporate culture and business conduct policies" and "G1-3 Prevention and detection of corruption and bribery".

9.5. AUDITOR

Audits of the accounts and activities aimed at issuing certifications of the conformity of the Sustainability Statement are carried out by an independent audit firm registered in the relevant registrar. The Shareholders' Meeting of April 27, 2017 appointed EY S.p.A. to audit the accounts for the 2017-2025 period.

The Shareholders' Meeting of April 17, 2025 appointed PricewaterhouseCoopers S.p.A as the independent audit firm for the legally-required audit for the financial years 2026-2034 and for the certification of compliance of the consolidated Sustainability Statement for the financial years 2026-2028.

The proposal to the Shareholders' Meeting regarding the new appointments, in accordance with Legislative Decree No. 135 of July 17, 2016 and Regulation (EC) No. 537/2014, included, on the outcome of a selection process created and carried out by the Company, the recommendation and the preference expressed by the Board of Statutory Auditors.

The selection process was brought forward from the conclusion date of the current engagement to allow the incoming auditor to comply with the provisions of EU Regulation 537/2014 (hereinafter also the "Regulation"), which prohibit the provision of certain services other than the legally-required audit from the financial year immediately preceding the first year of the audit ("cooling-in").

9.6. EXECUTIVE OFFICER FOR FINANCIAL REPORTING AND OTHER CORPORATE ROLES AND FUNCTIONS

The Board meeting of April 17, 2025 appointed Marco Enrico, Group Finance Director, as the Executive Officer for Financial Reporting for three years, with the favourable opinion of the Board of Statutory Auditors. Marco Enrico possesses the requirements established by the Company's By-Laws for the role of Executive Officer for Financial Reporting, namely many years of experience in the administrative, financial, control and sustainability areas, in addition to the legal requirements of good standing for the holding of the office of Director.

In undertaking her duties, Marco Enrico has the power to approve the corporate procedures impacting upon the financial statements, on the consolidated financial statements and on other documents which may be audited, and may participate in the design of the IT systems which impact upon the financial position of the company; he may develop an adequate organisational structure to undertake his activities, utilising internal resources available and, where necessary, outsourcing; he may also, where necessary, utilise the financial resources of the company, providing adequate information to the Board of Directors, and he may utilise the Internal Audit department for the mapping and analysis of processes and to carry out specific checks.

The Executive Officer for Financial Reporting periodically reports to the Control and Risks Committee and the Board of Statutory Auditors on the activities carried out and communicates on an ongoing basis with the Independent Audit firm.

The Board believes that this Executive Officer for Financial Reporting is impartial in relations with the other functions involved in the control process.

In addition, the next Shareholders' Meeting on April 16, 2026 is also called in extraordinary session to deliberate on the proposed amendment to Article 20 of the By-Laws (Executive Officer for Corporate Reporting). The proposed amendment to the By-Laws is designed to increase the Company's organisational flexibility by introducing the option to appoint, subject to the opinion of the control body, an executive other than the Executive Officer for Financial Reporting with specific expertise in sustainability reporting in accordance with the procedures and in compliance with the good standing requirements specified in the By-Laws.

9.7. COORDINATION OF THE PARTIES INVOLVED IN THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM

The information generated within the internal control system called BasicManagement and risk management shared on the web in a dedicated operating control section. The meetings of the Control and Risks Committee, usually attended by the CFO, the Internal Audit Manager, a member of the Supervisory Board, the Board of Statutory Auditors, and by the independent audit firm, as per the attendance described in the minutes, also provide an opportunity for the parties involved in the system to meet and coordinate.

Control and Risk Management System in relation to the financial reporting process (pursuant to Article 123 bis, paragraph 2, letter b), CFA)

1) Introduction

The Internal Control and Risk Management System in relation to the financial reporting process (hereafter the System) is the set of overall rules and corporate procedures adopted by the various company departments to permit, through an adequate identification process of the principal risks related to the preparation and dissemination of financial information, the reaching of the corporate objectives of true and fair disclosure.

The System seeks to provide reasonable certainty that the financial reporting – including consolidated reporting - communicated to the public is reliable, transparent, fair, true and timely, providing the users with a true and fair representation of the operational facts, permitting the issue of the declarations required by law that they correspond to the documented results, accounting records and underlying accounting entries of the facts and of the communications of the Company to the market and also relative interim financial reporting, as well as the adequacy and effective application of the administrative and accounting procedures during the period to which the accounting documents refer (Annual Accounts and Half-Year Report) and in accordance with applicable international accounting standards.

In defining the System, a risk assessment was undertaken in order to identify and evaluate the risk areas which could arise such as to compromise the achievement of the control objectives and the efficacy of disclosure provided by the corporate boards and to the market. The risk assessment also took into account the risk of fraud. Identification and assessment processes were carried out both for the Group as a whole and at the operational process level. Once the risks were identified an evaluation was undertaken, considering both qualitative and quantitative aspects, and the identification of specific controls in order to reduce the risk related to the non-achievement of the objectives of the System to an acceptable level, both at Company and process level.

2) Description of the principal characteristics of the Internal Control and Risk Management System in place in relation to financial disclosure.

The System provides for:

a set of rules and procedures for the preparation of financial statements and monthly reporting and a financial calendar for an efficient exchange of information between the Parent Company and its subsidiaries;
a process of identification and assessment of the Group's "strategically relevant" subsidiaries and of the principal company processes for the preparation of the income statement and balance sheet, through qualitative and quantitative analysis;
a process of identification and evaluation of the principal risks of errors of the accounting and financial information, based on a control process, implemented on a company web platform with levels of protected access, which flags any errors;
a process of periodic evaluation of the adequacy and effective application of controls. The Internal Control and Risk Management System relating to financial reporting is coordinated and managed by the Executive Officer for Financial Reporting, in concert with the Internal Audit department, for the verification of control system operations.

The Executive Officer for Financial Reporting periodically reports to the Board of Statutory Auditors and the Control and Risks Committee on the adequacy, also in organisational terms, and on the reliability of the administrative-accounting system, on the activities carried out and on the efficacy of the internal control system with regards to financial reporting risks. The Board of Statutory Auditors generally takes part in the work of the Control and Risks Committee, thus ensuring timely, effective exchange of information relevant to the performance of its duties.

10. DIRECTORS' INTERESTS AND RELATED PARTY TRANSACTIONS

The Board of Directors, in accordance with Consob Regulation No. 17221 of March 12, 2010 adopted, with the favourable opinion of the Independent Directors, the Related Party Transactions Policy. The procedure was subsequently updated in October 2016 in order to be more flexible, over time, to differing organisational features and the size of the Company and most recently in June 2021 to update the provisions introduced by the Consob Regulation. In 2024, the Control and Risks and Related Parties Committee found the procedure to be in compliance with Consob regulations and guidelines, as well as effective in its application, with no need for updating.

BasicNet is identified, for the purposes of the Consob Regulation incorporating related party transaction provisions, as a "smaller company" (companies presenting both assets written to the balance sheet and revenues as per the last approved consolidated financial statements not in excess of Euro 500 million) and, therefore, utilises a simplified system for the approval of significant transactions, in line with the rules for the approval of less significant transactions.

The approval of the transactions with related parties is the responsibility of, both in relation to significant transactions, as BasicNet falls within the application of Article 3, paragraph 1, letter f) of the Related Party Regulations, and in relation to minor transactions, to the Board of Directors, or the executive boards, provided they are not a related party in the transaction, within the limits of their delegated powers, and in any case with prior non-binding opinion of the Control and Risks Committee acting as the Related Parties Committee. For more information on the Related Parties Committee, please see the table in Par. 6 and 9.2 of the Report, above.

In general, exempted from the procedure, in addition to all the matters expressly indicated by the Related Party Regulation issued by Consob, are minor transactions (amounts not above Euro 150 thousand for natural persons and Euro 200 thousand for legal persons), provided they are undertaken at market or standard conditions within the ordinary transactions of the business and of the related financial activities; the operations concluded with or between subsidiaries, including joint ventures, by BasicNet, provided in the subsidiary companies there are no counterparties in the operation that have interests, qualified as significant, of other related parties of the Company; the transactions with associates provided that the associated company counterparties in the transaction do not have interests, qualified as significant, of other related parties of the Company.

Significant interest is not considered to exist by the mere sharing of one or more Directors or one or more Senior Executives between BasicNet and its subsidiaries.

In application of the procedure, a process was implemented through the "procurement" order collection IT system that sends an alert e-mail when an order is uploaded to the web for a related party, as identified on the basis of declarations received from related parties or parties closely linked to them (members of the Board of Directors and the Board of Statutory Auditors) and identified in the database management system.

The procedure is available on the Company's website: www.basicnet.com/contenuti/corporate/particorrelate.asp

11. BOARD OF STATUTORY AUDITORS

11.1 APPOINTMENT AND REPLACEMENT

The regulation applicable for the appointment of the members of the Board of Statutory Auditors is in accordance with legislative and regulatory provisions and Article 17 of the Company By-Laws, in relation to which reference should be made to www.basicnet.com/contenuti/gruppo/statuto.asp.

The Board of Statutory Auditors consists of three Statutory Auditors and two Alternate Auditors.

As the minority shareholders, as identified by the legal and regulatory provisions, are reserved the election of a Statutory Auditor - who assumes the role of Chairperson - and an Alternate Auditor, the procedure at Article 17 of the By-Laws provides that the appointment of the Board of Statutory Auditors takes place on the basis of slates presented by shareholders, in which the candidates are listed by progressive numbering.

The slate is composed of two sections: one for the candidates for the office of Statutory Auditor and the other for candidates for the office of Alternate Auditor. The slates must be drawn up so as to ensure that the resultant Board of Statutory Auditors complies with the applicable gender balance regulations in force.

Only shareholders which individually or together with other Shareholders hold shares with voting rights representing the share capital percentage required by the Company, which will be indicated in the call notice of the Shareholders' Meeting for the approval of the Board of Statutory Auditors, may present slate. For 2025, this percentage was set at 2.5% (Consob Executive Resolution No. 155 of January 27, 2026).

Together with the filing of slates, the Shareholders must present or deliver to the registered office of the company documentation declaring the ownership of the number of shares with voting rights necessary for the presentation of the slate.

Each shareholder, in addition to shareholders belonging to the same group, in accordance with Article 2359 of the Civil Code and the parties belonging to, also through subsidiaries, a shareholder agreement in accordance with Article 122 of Legislative Decree No. 58 of February 24, 1998, may not present, nor vote upon, nor through nominees of trust companies, more than one slate. Should this rule be violated, the shareholder's vote for any of the slates submitted shall be disregarded.

Each candidate may be presented on only one slate at the risk of being declared ineligible.

Candidates may not be included on the slates if they already hold a greater number of Statutory Auditor positions than permitted by the regulatory or legal provisions. The outgoing Statutory Auditors may be reelected.

In accordance with Article 1, paragraph 3, of the Ministry for Justice Decree No. 162 of March 30, 2000, the sectors closely related to those in which the Company operates are:

the research, developments, styling, production and sale of products and services, in particular textile products, clothing, footwear, eyewear, leatherwear, sporting equipment and goods, in addition to accessories for these sectors;
the management and development of brands.

The areas closely related to the Company's sector are:

industrial, commercial and tax law, in addition to economics and business, accountancy and corporate finance.

The slates, accompanied by exhaustive disclosure on the personal and professional characteristics of the candidates, with indication of the presenting shareholders and the overall share capital percentage held, in addition to the declaration of shareholders other than those who hold, also jointly, a controlling or relative majority holding, declaring the absence of connecting relationships as per the applicable regulations, with these latter, must be filed at the registered office of the Company by the deadline established by applicable legislative and regulatory provisions.

Together with each slate, within the regulatory and legally established timeframe, a declaration in which the individual candidates accept their candidature, must be filed at the Company's registered office, stating under their own responsibility, the inexistence of reasons for ineligibility and incompatibility, as well as the existence of the requisites for the respective assignments, in addition to those required for directorships held in other companies.

Slates presented that do not comply with all of the above formalities are considered as not presented.

The procedure for electing Statutory Auditors are as follows:

a. from the slate which obtained the highest number of votes at the Shareholders' Meeting, based on the progressive order on the slate, two Statutory Auditors and one Alternate Auditor are elected;
b. from the slate which obtained the second highest number of votes at the Shareholders' Meeting, the remaining standing members and the other alternate member are elected, based on the progressive order on the slate.

The Chairperson of the Board of Statutory Auditors is the first candidate indicated on the slate that obtained the second highest number of votes.

In the case of parity of votes between slates, the candidates from the slate having a higher equity investment are elected or, subordinately, with the greater number of shareholders.

In the case of presentation of only one slate, all candidates will be taken from that slate, with the Chairperson the first listed on the slate.

Where it is not possible to proceed with the appointment according to the above system, the Shareholders' Meeting deliberates by statutory majority.

Where his/her legal requisites no longer exist, the Statutory Auditor must leave office.

In the case of the replacement of a Statutory Auditor, including the Chairperson, where possible the Alternate Auditor belonging to the same slate as the discontinuing Auditor joins the board and in the case of the replacement a Statutory Auditor elected from the Minority Slate, the first candidate on the Minority Slate receiving the second highest number of votes joins the Board in their place. In the cases in which a replacement results in non-compliance with the legally established gender balance criteria, the Board of Statutory Auditors shall be supplemented.

For the supplementation of the Board of Statutory Auditors:

for the supplementation of the Statutory Auditors from the Majority Slate the appointment is made through a relative majority of the share capital represented at the Shareholders' Meeting, choosing from among the candidates indicated on the Majority Slate, ensuring that the composition of the Board of Statutory Auditors complies with the legally-required gender balance provisions;

for the supplementation of the Statutory Auditors from the Minority Slate, including the Chairperson of the Board of Statutory Auditors, the appointment is made through a relative majority of the share capital represented at the Shareholders' Meeting, choosing from among the candidates indicated on the Minority Slate, ensuring that the composition of the Board of Statutory Auditors complies with the legally-required gender balance provisions;

for the simultaneous supplementation of the Statutory Auditors, elected both from the Majority Slate and Minority Slate, including the Chairperson of the Board of Statutory Auditors, the appointment is made through a relative majority of the share capital represented at the Shareholders' Meeting, choosing from among the candidates indicated both on the Majority Slate and on the Minority Slate, of a number of Statutory Auditors equal to the number of Auditors whose mandate concludes from the same slate, ensuring that the composition of the Board of Statutory Auditors complies with the legallyrequired gender balance provisions.

Where it is not possible to proceed in accordance with the previous paragraph, the Shareholders' Meeting to supplement the Board of Statutory Auditors votes according to a relative majority of the share capital represented at the Shareholders' Meeting, while ensuring that the right to representation of the minority has been complied with, in addition to the regulatory required gender balance provisions.

11.2. COMPOSITION AND OPERATION OF THE BOARD OF STATUTORY AUDITORS (pursuant to Article 123-bis, paragraph 2, letters d) and d-bis) CFA)

The Board of Statutory Auditors, whose mandate concludes with the approval of the 2027 Annual Accounts, comprises:

Office	Member	Year of birth	Date first appointment (*)		In office from In office until	Slate (M/m) (**)	Ind. Code	Attendance at Board meetings (***)	No. other offices (****)
Chairperson	Ugo Palumbo	1983	13/04/2022	17/04/2025	Approv. 2027 accounts	m	X	12/12	--
Statutory Auditor	Gianna Luzzati	1962	13/04/2022	17/04/2025	Approv. 2027 accounts	M	X	12/12	2
Statutory Auditor	Alberto Pession	1965	27/04/2017	17/04/2025	Approv. 2027 accounts	M	X	11/12	1
Alternate Auditor	Riccardo Garbagnati	1961	13/04/2022	17/04/2025	Approv. 2027 accounts	m	X	N/A	1
Alternate Auditor	Simonetta Mattei	1967	13/04/2022	17/04/2025	Approv. 2027 accounts	M	X	N/A	--

(*) The first appointment of each Statutory Auditor refers to the date on which the Statutory Auditor was appointed for the first time to the Board of Statutory Auditors of BasicNet S.p.A.
(**) This column indicates whether the slate from which each Statutory Auditor is selected is a "majority" slate ("M"), or a "minority" slate ("m").
*** This column indicates the attendance by Statutory Auditors at meetings of the Board of Statutory Auditors with reference to the appointment date.
(****) This column indicates the number of offices, in addition to BasicNet S.p.A., of Director or Statutory Auditor in accordance with Article 148-bis of the CFA and the relative enacting provisions in the Consob Issuers' Regulation. The complete list of offices held is published by Consob on its website pursuant to Article 144 quinquiesdecies of the Consob Issuers' Regulation.

Diversity criteria and policies

Reference should be made to paragraph 4.3 concerning the Board of Directors.

The Board of Statutory Auditors, in its current composition, complies with the "gender quota" rules applicable on the appointment date.

For details on the disclosures required by ESRS 2 - Par. 19, 20(a) and (c), 21, and 23 regarding the composition and diversity of the Board of Statutory Auditors with particular reference to sustainability responsibilities, see the Sustainability Statement, section "GOV-1 The role of the administrative, management and supervisory bodies".

Independence

The Board of Statutory Auditors met immediately after the Shareholders' Meeting appointment of April 17, 2025 and, according to the Consob Issuers' Regulation, verified for all of its members compliance with the independence requirements established by Law (Article 148, paragraph 3 of the CFA) and by the Corporate Governance Code for the Statutory Auditors of companies with listed shares, confirming the inexistence of reasons for the ineligibility, incompatibility and/or lapse as per the applicable regulation, the company By-Laws and the Corporate Governance Code.

For the purposes of the audit, the Board of Statutory Auditors decided to refer to: (i) the list of existing administration and control positions, previously communicated to the Company pursuant to Article 2400 of the Civil Code, together with exhaustive information on their personal and professional characteristics, and (ii) declarations of acceptance of the candidature and possession of the requirements provided by the By-Laws and the statutory law issued pursuant to Article 144-sexies, paragraph 4, of the Issuers' Regulation.

The Board of Statutory Auditors immediately informed the Company of the outcome of these checks, which was communicated to the market through a press release issued upon conclusion of the Shareholders' Meeting in which the Board was appointed.

The Board of Statutory Auditors also carried out an assessment to verify the suitability of its members and the adequate composition of the Control Board, with reference to the requirements of professional standing, competence, good standing and independence as per the regulation, set out in the "Conduct Rules for Boards of Statutory Auditors of Listed Companies" issued by the National Council of Certified Public Accountants.

On conclusion of the self-assessment process, the Board found the composition of the body to be adequate, also noting the correctness and effectiveness of its functioning, and informed the Board of Directors of the Company of the positive outcomes of the self-assessment.

The documentation filed for the purposes of the appointment, including the updated curriculum vitaes of the Statutory Auditors, is available on the website www.basicnet.com/contenuti/gruppo/organisocialisocieta.asp.

The Statutory Auditors, within their duties, acquired information also through meetings with the independent audit firm, with the Supervisory Board and through attending the Control and Risks Committee meetings.

The Statutory Auditors may participate in meetings subsequent to their appointment and during their mandate with the Chairperson and Management, in order to remain updated on corporate affairs and developments. They also continually have access to financial and operational information from the BasicManagement portal.

Remuneration

The Company considers that the remuneration of the Statutory Auditors is appropriate with regard to the competence, professionalism and commitment required by the role held in relation to the size of the Company.

Management of interests

Any Statutory Auditor who, on his/her own behalf or that of third parties, has an interest in a certain transaction of the issuer shall inform the other Statutory Auditors and the Chairperson of the Board, in a timely and comprehensive manner, regarding the nature, terms, origin and extent of his/her interest. This event however has never occurred.

As already indicated in the preceding paragraphs, the Board of Statutory Auditors, in undertaking its activities, liaise with the Internal Audit department and the Control and Risks Committee.

The Shareholders' Meeting on appointment established the remuneration of the Statutory Auditors, as a fixed amount, in line with that of the previous mandate and with the role covered and the commitment required, in addition to the size of the Company.

11.3 ROLE

During the year, 12 meetings of the Board of Statutory Auditors were held with an average duration of 2 hours. As for 2026, one Board of Statutory Auditors meeting has already been held, and 9 more are planned.

The Board of Statutory Auditors, in carrying out its functions, has co-ordinated and regularly co-ordinates with the Control and Risks and Related Parties Committee, attending joint meetings at which the Internal Audit, the Director responsible for the Internal Control and Sustainability System, the Executive Officer for Financial Reporting, and the independent audit firm participate. The board also has a direct meetings with these corporate bodies when necessary.

In addition, members of the Board of Statutory Auditors attended meetings of the Remuneration Committee. In 2025, it issued a favorable opinion at the board meeting regarding the award of an extraordinary bonus - in relation to the acquisition by Permira Strategic Growth Topco S.à r.l. RAIF of a minority shareholding in K-Way S.p.A. - to the Chairperson, Chief Executive Officers, some Executive Directors and some Group staff who contributed to the enhancement of the K-Way brand and completing the transaction.

The Board of Statutory Auditors, in its capacity as the Internal Audit Committee, was informed of the conferment of consulting assignments to companies in the EY network, separate from the audit activity; EY S.p.A. was only paid the fee for the report required by Article 2501-bis of the Civil Code, as a legally required activity.

The Board of Statutory Auditors further developed, with the support of consultants, the project activities for the preparation of the 2025 Sustainability Statement, as well as the Double Materiality assessment, aimed at providing information regarding both the impact of its activities on people/environment (inside-out) and how sustainability matters affect them (outside-in).

For further details on the role and main activities carried out by the Board of Statutory Auditors during the year, see the Report prepared by the Board in accordance with Article 153 of the CFA.

For details on the disclosures required by ESRS 2 - Paras. 19, 20(b), 22, 24, and 26 regarding the composition and diversity of the Board of Statutory Auditors with particular reference to sustainability responsibilities, see the Sustainability Statement, sections "GOV-1 The role of the administrative, management and supervisory bodies" and "GOV-2 Information provided to and sustainability matters addressed by the undertaking's administrative, management and supervisory bodies".

12. RELATIONS WITH SHAREHOLDERS AND OTHER RELEVANT STAKEHOLDERS

Access to information

On the website of the Company www.basicnet.com financial information of interest to Shareholders and other major stakeholders may be found (Annual Reports and periodic reports, Sustainability Statement, press releases and notices, presentations), in addition to updated data and documents concerning Corporate Governance and regulated information (composition of the Corporate Boards, the By-Laws, the Shareholders' Meeting regulation, the Ethics Code and the Corporate Governance and Ownership Structure Report). The press releases relating to the Brands and Companies of the Group are also available.

Shareholders may communicate with the Company through the address [email protected].

The Board of Directors identified the Chairperson of the Board of Directors Mr. Marco Boglione and the Director Mr. Marco Enrico as the individuals responsible for managing relations with shareholders (Investor Relator), assigning them the task of maintaining relations with the financial community, the Stock Exchange, Consob and the press representatives.

Dialogue with Shareholders and major stakeholders

The Group is cognisant of the importance that correct operational information has for the market, investors and the community in general.

For this reason, in view of the transparency required for conducting business, the Group considers transparency as an objective in relations with all stakeholders. In this regard, the Group communicates with the market and investors in compliance with the criteria of correctness, transparency and equal access to information, and in any case in accordance with the procedures for the management of material and inside information as approved by the Board of Directors of BasicNet.

The Company has not currently deemed it necessary to adopt a formalised policy for dialogue with shareholders, as its size and organisational structure allow for effective and timely management of discussions through established operating practices, in compliance with current regulations.

Dialogue between the Company, through the Investor Relator, and the financial community mainly involves:

the publication of periodic information including the Annual Financial Report, including the Sustainability Statement, the Half-Year Report and additional periodic information;

the dissemination, by way of the distribution and storage system used by the Company, and subsequent publication online of press releases concerning periodic financial or inside information;
one-on-one meetings when requested by current or potential investors.

Furthermore, in 2025 the communication activity with analysts and investors, which began in 2018, continued with the establishment of a conference call in which the Investor Relator presented the Company's periodic results to analysts and asset managers, supported by dedicated presentations. The Board of Directors also resolved to report the main income statement and balance sheet indicators on a quarterly basis in order to provide the market with timely information and greater transparency regarding the Company's performance. Meetings with individual investors also continued and were extended to include a number of Italian and overseas operators.

For more information on how the Company takes into account the interests and opinions of stakeholders in its strategy and business model, in accordance with ESRS Principles 2 - Paras. 43 and 45, see the Sustainability Statement, section "SBM-2 Interests and views of stakeholders".

SHAREHOLDERS' MEETINGS (pursuant to Article 123-bis, paragraph 1, letter I) and paragraph 2, letter c), CFA

The Shareholders' Meetings provide opportunities to meet and communicate with the shareholders. During the Shareholders' Meetings, the Chairperson and the Chief Executive Officer provide the shareholders with all the necessary information for the undertaking of motions.

The Ordinary Shareholders' Meetings undertake their duties in accordance with Article 2364 of the Civil Code and the Extraordinary Shareholders' Meetings in accordance with Article 2365 of the Civil Code.

In accordance with Article 2365, paragraph 2, of the Civil Code, as incorporated in Article 16 of the By-Laws, the following duties are conferred to the competence of the Board of Directors:

resolutions regarding mergers or spin-offs pursuant to Articles 2505, 2505-bis and 2506-ter of the Civil Code;
the establishment or closing of secondary offices;
indication of which Directors may represent the Company;
modify the company By-Laws in compliance with law;
the reduction of share capital in the event of return of shares by shareholders;
re-locating the registered office within the national territory.

In accordance with Article 2410, paragraph 1 of the Civil Code and Article 16 of the By-Laws, any issue of bonds is decided by the Directors.

The Shareholders' Meeting of April 16, 2024 approved the proposal to amend Article 9 (Shareholders' Meetings) of the By-Laws, containing the provision that Shareholders' Meetings may also be held exclusively through the designated agent, and Article 16 (Board of Director's Powers and legal representation) of the By-Laws, attributing resolutions concerning spin-offs in the cases provided by law to the competence of the Board of Directors.

The Board of Directors, and any executive boards, also have the right to undertake, without a Shareholders' Meeting authorisation, all acts and operations against the objectives of a public tender or exchange offer, from the moment in which the communication in which the decision or the obligation arises to promote the offer was made public until the termination or expiry of the offer. The Board of Directors, and any executive boards, also has the right to implement decisions, not yet implemented in full or in part and which are not within the scope of the normal activities of the Company, undertaken before the communication as described above and whose implementation could negate the achievement of the objectives of the offer.

The Shareholders' Meeting (June 30, 2000, and for supplementation and/or modifications subsequently on April 29, 2011) approved the Shareholders' Meeting Regulation in order to permit the orderly functioning of the meetings and to guarantee the right of each shareholder to take the floor on matters under discussion. The Shareholders' Meeting Regulation is available on the Company website at www.basicnet.com/contenuti/gruppo/regolamento.asp

As per Article 2 of the Shareholder' Meeting Regulation, those holding shares in accordance with applicable legislation and the By-Laws, or their proxies or representatives, may attend and speak at the Shareholders' Meetings. Proof of personal identity is required for attendance at the Shareholders' Meeting. Unless otherwise indicated in the Call Notice, the personal identification and the verification of the right to attend takes place at the location of the Shareholders' Meeting at least one hour before the time fixed for the meeting.

Attendees are assured the possibility to follow and take part in the discussion and to exercise their right to vote using the technical methods established on each occasion by the Chairperson: usually time is allowed for contributions be shareholders after the presentation of each matter on the Agenda.

All Directors generally attend the Shareholders' Meetings. The Board of Directors is available to shareholders to provide any further necessary information for the undertaking of fully informed decisions.

One Shareholders' Meeting was held in 2025, called without use of the designated agent.

FURTHER CORPORATE GOVERNANCE PRACTICES (pursuant to Article 123-bis, paragraph 2, letter a), CFA)

There are no corporate governance practices further to those indicated in the previous points applied by the Issuer, other than those required by legislation and regulation.

15. CHANGES SUBSEQUENT TO THE YEAR-END

There have been no changes since the close of the fiscal year.

for the Board of Directors

The Chairperson

Marco Daniele Boglione

BASICNET 2025 Consolidated Sustainability Statement

GENERAL DISCLOSURES (ESRS 2)

METHODOLOGICAL NOTE

[BP-1] General basis for preparation of the Sustainability Statement

The Consolidated Sustainability Statement of the BasicNet Group (hereinafter the "Statement") pursuant to Legislative Decree No. 125/2024 was prepared on a consolidated basis, covering all legal entities consolidated in the financial statements. In December of the reporting year, the companies Woolrich Europe S.p.A., Sundek S.p.A. and Sebago France S.a.s. were included in the BasicNet Group's consolidation scope. Given the timing of their entry, which resulted in their inclusion for only a limited portion of the reporting period, this Sustainability Statement does not fully include the qualitative and quantitative disclosures required by the ESRS for these entities, except where they are significant. Sustainability data and information on these entities will be included in future reporting years. The Consolidated Sustainability Statement has been prepared in accordance with Directive (EU) 2022/2464 (Corporate Sustainability Reporting Directive – CSRD) and the European Sustainability Reporting Standards (ESRS) adopted with Commission Delegated Regulation (EU) 2023/2772, also taking into account the amendments and clarifications introduced by Commission Delegated Regulation (EU) 2025/1416 ("quick fix").

The information contained in this document is based on the double materiality analysis, which enabled the identification of material impacts, risks and opportunities (IROs) for BasicNet. Further details on double materiality assessment activities can be found in "The Group's Double Materiality" section. The definition and assessment of IROs takes into account both the Group's own operations and the entire value chain in which BasicNet operates. This includes actors both upstream and downstream of the Company, with particular attention paid to upstream activities and Tier 1 suppliers. The extent to which policies, actions and targets involve the value chain depends on the double materiality analysis. The value chain-related metrics for ESRS E3 and ESRS E5 will be integrated over the next three years, as stipulated in ESRS 1 Section "10.2 Transitional provision related to chapter 5 Value Chain". See the topic sections for further information.

No information related to intellectual property, know-how or innovation results has been omitted. [ESRS 2 MDR-M 77b] In addition, unless otherwise stated, none of the metrics in this document have been validated by an external body other than the independent audit firm.

[BP-2] Disclosures in relation to specific circumstances

Time horizons

The time horizons adopted by BasicNet have been defined and applied in alignment with the Company's Enterprise Risk Management (ERM) framework.

short term: up to one year;
medium term: 1-3 years;
long term: more than three years.

Estimates used and sources of uncertainty in results

The use of estimates for metrics, particularly in relation to data on Scope 3 emissions (E1-6), is addressed in the following sections. Metrics related to own operations are primarily based on primary data. For estimated data, while standardised calculation methodologies based on industry best practices were adopted, a high level of uncertainty remains due to potential variations in available data, differences in the reporting criteria adopted by partners and future regulatory changes. The Group is committed to continuously monitoring the reporting methodologies adopted by its partners and potential regulatory developments to reduce the uncertainty of reported information where possible. All assumptions and potential uncertainties are described in the sections of the Sustainability Statement where the metrics are presented. Specifically, estimates were used for the quantitative information reported in the following sections:

E1-3 Actions and resources in relation to climate change policies (reduced consumption due to replacement of neon lamps with LED lamps);
E1-5 Energy consumption and mix (energy consumption from nuclear sources, energy consumption within the US, energy consumption of BasicVillage Milano based on surface area allocation, and consumption of fuel used by the BasicAir aircraft);
E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions (indirect Scope 3 emissions for all categories considered, emissions calculated based on estimated energy consumption);
S1-14 Health and safety metrics (hours worked abroad).

Forward-looking information, such as projections on when new policies, actions and targets will be implemented, is inherently uncertain. Statements in the document with reference to forward-looking information are based on current plans, estimates, opinions, views, and projections. Although BasicNet believes that the expectations reflected in these forward-looking statements are reasonable, there is no guarantee that they will prove to be correct. By nature, forward-looking statements involve risks, uncertainties and assumptions, both general and specific, and actual results may materially differ for those contemplated, expressed or implied in any forward-looking statement.

In accordance with the ESRS guidelines and in light of the Regulation of July 11, 2025 ("quick fix"), the Group decided to defer reporting on the expected financial effects. Changes in preparation or presentation of sustainability information

No changes have been made to the preparation and presentation of sustainability information compared to previous reporting periods.

Reporting errors in prior periods

This document does not include any modifications due to material reporting errors in prior periods, disclosures stemming from other legislation or generally accepted sustainability reporting pronouncements BasicNet does not follow any additional reporting standards beyond the information required by the ESRS standards.

Incorporation by reference

Some elements of the Disclosure are incorporated by reference into other sections of this document and are listed in Table 29, in the "Annex" section.

SUSTAINABILITY GOVERNANCE

[GOV-1] The role of the administrative, management and supervisory bodies

BasicNet has its own governance model, which is constantly updated in relation to changes in the regulations on listed companies. In addition, since the listing, BasicNet has always complied with the Self-Governance Code promoted by Borsa Italiana and, in line with EU Recommendation No. 08/2014 and as provided in Paragraph IV of the "Guiding Principles" of the Corporate Governance Code, has always provided evidence and explanation in the Annual Report made available to the Market, where any principles or application criteria have been disregarded.

Since 2022, BasicNet has decided not to continue to comply with the Corporate Governance Code, except to the extent that its recommendations correspond to those introduced by the legislation in force for listed companies, i.e. the Civil Code, the Consolidated Finance Act and the related regulations issued by Consob, Borsa Italiana and the applicable European Regulations.

The Board of Directors, unchanged from 2024, consists of 14 members, including six female Directors (43%), eight Executive Directors (57%), six Non-Executive Directors (43%), and three Independent Directors (21%).

Table 1 - Composition and Diversity of the BoD

Composition and Diversity of the Board of Directors
		2025
	Unit	Male	Female	Total
Members of the Board of Directors	no.	8	6	14
of which
Executive members	no.	5	3	8
Non-executive members	no.	3	3	6
How many of the Non-Executives listed above are Independent Members	no.	2	1	3

For further information on the composition and diversity of the administrative, management and supervisory bodies, see sections "4.3. COMPOSITION OF THE BOARD OF DIRECTORS", "6. INTERNAL COMMITTEES" and "11.2. COMPOSITION AND FUNCTIONING OF THE BOARD OF STATUTORY AUDITORS" of the "Directors' Report".

BasicNet does not provide for formal and direct employee representation within its administration, management and supervisory bodies. This reflects a governance structure in which worker involvement is managed through alternative mechanisms, such as trade unions, Trade Union Representative Bodies (RSAs) and General Workers' Representative Bodies (RSUs), rather than through direct participation in corporate boards or decision-making bodies.

BasicNet's Board of Directors possesses adequate and diverse expertise to effectively fulfil its role in overseeing the governance processes, controls and procedures used to monitor, manage and oversee impacts, risks and opportunities, including ESG-related matters. The Board of Directors assesses its organisational, administrative and accounting adequacy so that full transparency and fairness in conducting business is always ensured. This includes reviewing and approving the Double Materiality assessment and Sustainability performance reported in the Sustainability Statement, following the favourable opinion of the Control and Risks Committee. For further details on the roles of the Group's Board of Directors, please refer to section "4.1 ROLE OF THE BOARD OF DIRECTORS" of the Directors' Report.

Board members contribute their technical and specialised expertise, when necessary, to address business needs and the management of sustainability-related matters, drawing on their educational backgrounds and professional experience, including in sectors other than the one in which the Company operates. In addition, to ensure a comprehensive understanding of the Group's values, an induction session on the Group's Ethics Code and the principles of the 231 Model is conducted at the time of appointment, with additional input from external experts where necessary to support Directors' decisions. The objective is to enable more precise oversight and understanding of BasicNet's potential impacts, risks, and opportunities. Directors who are also employees or executives of the Group participate in the training courses provided for staff, which include ESG topics. The curricula vitae of the Directors in office, which describe their personal and professional qualifications, can be consulted on the Company's website.

The Board of Directors is responsible for strategic direction and the ongoing monitoring of the effectiveness of the Internal Control and Risk Management System of the Group, ensuring that corporate risks, along with ESG-related impacts and opportunities, are properly identified and managed in alignment with the corporate strategy. In addition to risk management, the Board oversees impacts and opportunities, evaluating how they could influence the Company's growth and sustainability. Although no formal ESG objectives are currently in place, Directors are committed to incorporating ESG considerations into their decisions and activities to support the Company's long-term sustainability and interests.

To ensure proper oversight of corporate management and operations, the Board of Directors also relies on several bodies and structures, including the Chief Executive Officer, the Control and Risks and Related Parties Committee, the Internal Audit Manager, the Control Body and the Supervisory Board, each of which has specific responsibilities in monitoring and overseeing corporate risks. The system is also based on key documents, such as the Ethics Code, the Code of Conduct for Sourcing Centres and the Organisation, Management and Control Model pursuant to Legislative Decree No. 231/2001, which provide detailed guidance on managing social compliance issues and whistleblowing reports.

The Control and Risks Committee consists of three Independent Directors: Piera Braja (Chairperson), Francesco Calvo and Cristiano Fiorio.

One of the primary objectives of BasicNet's Board of Directors is to create medium- to long-term value for shareholders and all stakeholders involved in the Group's activities, fostering sustainable economic, environmental and social development. Against this backdrop, the Board is responsible for defining the Group's corporate structure and governance system, while also monitoring risks and impacts arising from its business operations.

The responsibilities related to impacts, risks and opportunities are allocated as follows:

CEO: they are responsible for major executive decisions, overseeing business operations and representing the Company before the Board of Directors, stakeholders and external institutions.
Control and Risks and Related Parties Committee (CRRPC): an internal governance body composed of members of the Board of Directors, responsible for overseeing and evaluating risk management processes. The Committee ensures that risks are identified, assessed and managed effectively, integrating sustainability initiatives into corporate strategies while promoting transparency and regulatory compliance.
The Chief Staff Officer (CSO), who is also the Internal Control and Sustainability Director, is responsible for coordinating the Sustainability Statement preparation process, managing reporting activities and sustainability initiatives at the Group level.
The Executive Officer for Financial Reporting certifies, together with the responsible bodies, pursuant to Article 154-bis, paragraph 5-ter, of Legislative Decree No. 58 of February 24, 1998, that the Sustainability Statement included in the Directors' Report has been prepared:
a) in accordance with the reporting standards applied pursuant to Directive 2013/34/EU of the European Parliament and of the Council of June 26, 2013, and Legislative Decree No. 125 of September 6, 2024;
b) with the specifications adopted under Article 8(4) of Regulation (EU) 2020/852 of the European Parliament and of the Council of June 18, 2020.

The CSO of BasicNet, under delegation from the Chief Executive Officers, has the primary responsibility for the Internal Control System, managing and overseeing the processes, controls and governance procedures aimed at the management of impacts, risks and opportunities including those related to ESG topics. The CSO reports to the Control and Risks Committee (CRC) on a quarterly basis, which is responsible for monitoring the system's effectiveness and ensuring that corporate risks are adequately managed in line with the Group's strategic objectives.

The hierarchical structure of the administrative, management and supervisory bodies is designed to ensure that each level of responsibility is clearly defined, with the Board of Directors outlining strategic guidelines and periodically monitoring the effectiveness of the Internal Control and Risk Management System. Operational and supervisory responsibilities are divided among the CEO, the Control and Risks Committee, the CSO, Internal Audit, and the Supervisory Board, ensuring the integrated management of risks and impacts, while maintaining a constant focus on opportunities.

Dedicated controls and procedures are systematically applied and integrated with other internal functions, ensuring that risk and impact management is an integral part of corporate strategic decisions.

BasicNet's administrative, management and supervisory bodies leverage internal sustainability expertise, particularly through specialised functions within the Group's various brands, which focus on the double materiality topics identified. Sustainability expertise is acquired through dedicated training programmes and the support of external experts, with particular emphasis on environmental impacts. For example, sector experts provide specific environmental expertise, while other sustainability areas are addressed through ongoing training courses. The Directors, in practice, have the facility to participate in meetings subsequent to their appointment and during their mandate with the Chairperson and Management, in order to improve their understanding of the organisational structure and corporate processes and to ensure that they remain informed regarding corporate affairs and developments. Specifically, the Board of Directors receives communication, when requested, with respect to the main activities in the field of sustainability carried out by the Company. Where deemed necessary, communications are conducted during training inductions. When appointed, the Boards of Directors and of Statutory Auditors receive an induction set from the Company that includes the Group's Ethics Code and the Model of Organisation and Management as per Legislative Decree No. 231/2001.

[GOV-2] Information provided to and sustainability matters addressed by the undertaking's administrative, management and supervisory bodies

The Control and Risks and Related Parties Committee of BasicNet meets on average every quarter and, when necessary, dedicates part of its discussions to sustainability updates. During these meetings, the Committee receives reports and updates from the Occupational Health and Safety Manager and the Supervisory Board (SB) to monitor material impacts, risks and opportunities, and to evaluate the effectiveness of the policies and actions adopted by the Company. This process ensures ongoing verification of the implementation of measures and targets, ensuring the effective management of sustainability topics.

BasicNet's administrative, management and supervisory bodies constantly integrate impacts, risks and opportunities into their strategic decision-making processes. Every significant operation and the risk management process are evaluated in light of these factors to ensure sustainable growth and the creation of long-term value for all stakeholders, including shareholders, licensees, investors, local communities and public institutions. Specifically, BasicNet acknowledges that the Group's success is inherently linked to the economic development of its network of licensees, recognising that their performance significantly contributes to the sustainability of the business. The governance bodies are aware of the potential trade-offs associated with these impacts, risks and opportunities, and take them into account when defining the strategy and making critical decisions for the Group's future.

During the year, the CRRPC of BasicNet addressed, during three meetings, ESG-related risks which were subsequently assessed as material through the double materiality assessment.

In particular, the governance bodies reviewed the double materiality assessment conducted by the Company, with the support of external consultants, to identify material impacts, risks and opportunities to be included in this document.

[GOV-3] Integration of sustainability-related performance in incentive schemes

[E1 GOV-3] Integration of sustainability-related performance in incentive schemes

At present, there are no incentive systems linked to ESG targets or climate-related targets allocated to BasicNet's administrative, management and supervisory bodies.

[GOV-4] Statement on due diligence

As part of the preparation for this Sustainability Statement, BasicNet initiated a process of collecting and analysing information related to its due diligence practices, while acknowledging that this is not yet a formalised process. Within the management of its supply chain, BasicNet adopts an approach aimed at preventing and mitigating potential negative impacts, taking into account those impacting its workers along the value chain. This approach includes assessment activities during the qualification stage, conducted on a voluntary basis through questionnaires. This supply chain process is ongoing, with continuous monitoring of supplier performance and compliance with the Code of Conduct, thereby fostering improvements along the entire supply chain. These assessments are not exclusively focused on sustainability matters, although they are taken into account within control procedures. While inspired by international principles of corporate responsibility, the processes adopted across the value chain do not formally align with the Due Diligence models outlined by the United Nations Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises.

BasicNet continues to monitor regulatory developments and international best practices, with the goal of progressively strengthening its risk assessment and management procedures along the supply chain.

The initiatives and projects listed in the table below represent a key contribution in building a reference framework for managing the environmental, social and governance impacts that the Group could generate or is already generating.

	DUE DILIGENCE ELEMENTS	BACKGROUND INFORMATION	REFERENCE PARAGRAPHS
a)	Integration of due diligence into governance, strategy and the business model.	As a foundation for integrating responsibility in line with ESG aspects, the Group adopts various policies, with its commitment reflected in the following policies: Ethics Code o Code of Conduct for Sourcing Centres o Procedure for reporting offences and o irregularities (whistleblowing) In addition, due diligence governance activities are incorporated and defined through the roles of the Control and Risks Committee and Internal Audit, each responsible for identifying, assessing and managing the impacts generated by the Group's activities.	#Ref MDR-P for the indicated • policies #Ref Internal Audit and • CRRPC role description
b)	Engagement of relevant stakeholders in all key phases of due diligence.	Stakeholder engagement is conducted through various channels and methods (see section SBM2). Specifically: engagement with suppliers and Sourcing Centres • through initial alignment checks with technical requirements and the Group's values, stipulation of the Sourcing Agreement and subscription to the Code of Conduct and the Product Restricted Substances List. engagement with customers through platforms. •	#Ref SBM-2 •
c)	Identification and assessment of negative impacts	The Group's double materiality process placed • particular emphasis on evaluating and prioritising impacts, seeking to identify those deemed most material for the organisation and its stakeholders (IRO-1 and SBM-3). The customer service complaints channel serves as • a key source for identifying potential negative impacts caused by the Group's products on consumers, in addition to promptly detecting non conformities that could pose risks to safety, quality and the environment. The counterfeiting reporting channel allows the • Group to receive reports identifying counterfeit products and consequently assess their impact on consumers Additional counterfeiting reports may be received • directly from the Postal Police, the Finance Police and the Customs Agency • The Group's whistleblowing channel is a key	#Ref SBM-3 / IRO-1 • • #Ref S4 #Ref Whistleblowing (S1) •

Table 2 - Group Due Diligence Reference Elements

		resource for receiving reports from all stakeholders. These reports may cover potential or actual negative impacts caused by BasicNet's operations.
d)	Adoption of measures to mitigate negative impacts.	The Group's whistleblowing procedure defines the • investigation process to be followed after receipt of a report. The management of counterfeiting reports • includes technical assessments and the removal of illegal e-commerce websites • To prevent counterfeiting, BasicNet's products include a label guaranteeing traceability and authenticity	#Ref Whistleblowing (S1) • #Ref Counterfeiting (S4) • • #Ref Sourcing Centre (S2) / "Main risks and uncertainties" (Directors' Report)
e)	Monitoring the effectiveness of actions taken and communicating results	The Group's whistleblowing procedure requires an • annual report be submitted to the SB on the complaints received and corrective actions taken for monitoring purposes Counterfeiting reports are centrally managed • through continuous market monitoring	# Ref Whistleblowing (S1) • • # Ref Sourcing Centre (S2) / "Main risks and uncertainties" (Directors' Report)

[GOV-5] Risk management and internal controls over sustainability reporting

In 2024, a Sustainability reporting and ESG governance reporting procedure was developed to define roles and responsibilities, establish specific procedures to ensure data collection, validation and reporting, and provide assurance that the main risks associated with the Sustainability Statement are covered by internal control activities. The processes described and formalised within this document are based on previously nonformalised data collection, validation and reporting activities, also carried out for the 2025 Statement. This procedure identifies the EOSP, who plays a central role and is responsible for:

defining the Sustainability Statement's consolidation scope
planning the activities necessary for the preparation of the Sustainability Statement
managing the double materiality process and consolidating its results to identify the Disclosure Requirements (hereinafter also "DRs")
involving data owners in data collection
verifying and validating data completeness and accuracy
preparing the Sustainability Statement
reviewing the Sustainability Statement and ensuring the overall consistency of the document
managing the review and approval steps involving the CEO, CRRPC and BoD.

Risks linked to sustainability reporting are assessed within the Enterprise Risk Management activity and therefore follow the same methodology; the main risk factors identified include regulatory compliance, data accuracy and data completeness.

These risks were exacerbated following the introduction of the CSRD and ESRS Standards. This resulted in both an expansion of the scope of required data and the inclusion of new information in the Sustainability Statement. To mitigate the risk of including inaccurate or incomplete data in the Sustainability Statement, the reporting procedure described above was developed and specialist advisory support was used.

The draft Sustainability Statement undergoes multiple reviews by data owners – specialists in their respective reporting areas – before being consolidated for approval by the EOSP.

Subsequently, the EOSP presents the draft Sustainability Statement to the Control and Risks and Related Parties Committee to gather feedback on the document. This Committee performs an in-depth analysis of the content. If non-compliances are detected, they are carefully examined and resolved with the support of the CRRPC, which provides appropriate remarks and observations aimed at supporting the approval process of the draft Sustainability Statement by the Board of Directors.

Finally, the CSO presents the draft Sustainability Statement to the Board of Directors for review and approval via a written resolution.

SUSTAINABILITY STRATEGY

[SBM-1] Strategy, business model and value chain

The Group's products, services, markets and customers

The BasicNet Group operates globally in the apparel, footwear and accessories sector, developing and enhancing its brands Kappa®, Robe di Kappa®, K-Way®, Superga®, Briko®, Jesus® Jeans, Sabelt®, Sebago®. In 2025, the Group acquired two new brands: Woolrich and Sundek. The Group's business focuses on growing brand value and expanding product distribution, both through direct management and a wide network of licensee companies, which ensure presence in key international markets.

The Group comprises Italian and international operating companies, organised in three main business sectors: "clothing, footwear and accessories", "property management" and "investment management".

The clothing, footwear and accessories sector includes all the Group's legal entities, except BasicVillage S.p.A., and focuses on developing and enhancing proprietary brands (Kappa®, Robe di Kappa®, K-Way®, Superga®, Briko®, Jesus® Jeans, Sabelt®, Sebago®, Woolrich and Sundek), in addition to distributing related products directly and through a global network of licensee companies. This sector specifically covers:

the strategic activities and the "Powered by" model developed by BasicNet S.p.A. and by the Group brand-owning companies;
the granting of intellectual property rights to licensee producers and distributors, as well as the management of contracts and the administration of related financial flows;
the direct use and development of the intellectual property rights and of the products of all brands of the Group for the Italian market, of Kappa® in France and Spain, of K-Way® in France, Spain, Switzerland and K-Way Retail in Ireland, and of Sebago in France and Spain;
the operational management of major technical and sports sponsorship and merchandising contracts, some of which offer international visibility for the entire network;
the management of the Group's branded sales points within the plug@sell project in Italy and the direct management of stores in France, Spain, Switzerland, England, Ireland and Portugal.

The parent company BasicNet S.p.A. coordinates and manages the Group's operations, which are structured across four main geographical macro-areas:

Europe
The Americas
Asia and Oceania
Middle East and Africa

Sites	Number of employees
Italy	1,199
France	314
Spain	91
Ireland	6
Monaco	0
United Kingdom	18
Switzerland	17
China	9
Vietnam	8
USA	7
Germany	70
Austria	9
Netherlands	15
Portugal	8
TOTAL	1,771

Table 3 - BasicNet employees by country

The network of stores operating under the BasicNet Group's brands comprises a wide number of sales points, including 1,098 Kappa® and Robe di Kappa® monobrand and shop-in-shop stores, 104 Superga® points of sale, 133 K-Way® stores and 48 Sebago® points of sale. The Group has 1,771 employees at December 31, 2025, distributed across the regions in which it operates, as shown in table 3.

The business model

The BasicNet Group has developed a "networked" business model, based on collaboration with licensees, who serve as key partners for the distribution and sourcing of products worldwide. BasicNet provides them with an integrated service system, offering a business opportunity that extends beyond simple product supply.

This innovative, flexible and modular approach has enabled the Group to grow rapidly while maintaining an efficient and dynamic organisation. At the core of BasicNet's Business System is a fully integrated IT platform that connects the Parent Company with companies in its network, thereby facilitating the real-time sharing of information and optimising operational management. The system is designed to facilitate expansion both internally – through the entry of new licensees and access to new markets – and externally, through brand acquisitions and expansion into new business areas.

The Parent Company BasicNet S.p.A. coordinates "Powered by" activities to support companies owning individual brands. These activities include developing software for the online management of supply chain processes, coordinating information flows related to production and marketing, and managing strategic finance.

Brand-owning companies are responsible for product research and development and global marketing, while retail distribution, regional logistics and local marketing are assigned to directly managed territories and licensees, which are defined based on geographical regions or specific product categories.

The manufacture of finished BasicNet-branded products, which are distributed by licensee companies in their respective areas, is entrusted to Sourcing Centres, operating via the Business System, which connects production sources with distributors. Sourcing Centres are in fact third-party firms to the Group. Their function is to manufacture and market merchandise and are located in various countries worldwide, depending on what type of goods they produce. As part of its Business System evolution, the Group has developed the plug@sell® direct sales model, which is currently active in Italy, Switzerland, Spain, France, England, Portugal and Ireland. This platform integrates retail sales management with the web and corporate systems, enabling real-time monitoring of sales point operations, from logistics to accounting and staff training.

The Retail project offers three different direct-to-consumer sales formats on the European market. The first level comprises Brand Stores, located in city centres, on shopping streets and at shopping centres through franchising models. The second level includes Brand Outlets located in Outlet Villages. Finally, the third level encompasses "Spaccio" discount shops, located in retail parks or converted industrial areas. All three formats are designed to be replicable across different market environments.

The value chain

The BasicNet value chain operates through an integrated ecosystem involving suppliers, partners, production licensees (Sourcing Centres), commercial licensees and end customers, ensuring a highly digitalised and efficient operating model. This approach enables the Group to optimise the management of the entire product life cycle (excluding the use and end-of-life phases), from raw material selection to their distribution and use, with a continuous focus on quality, innovation and sustainability. Specifically, BasicNet's value chain is composed as follows:

Upstream:

• Identification, extraction and processing of raw materials

The process of procuring the raw materials used to manufacture BasicNet brands begins with the research and selection of materials such as cotton, rubber, leather and other textile or synthetic components, based on criteria including quality, availability and compliance with technical standards. This phase is followed by the cultivation, farming and harvesting of raw materials, involving both plant-based and animal-origin sources, which are used in various production applications, including the manufacturing of plastic and synthetic materials. Finally, logistics and the transportation of raw materials to processing facilities are managed by the Sourcing Centre, which coordinates direct suppliers to ensure supply chain reliability and continuity.

• Processing of plastic, synthetic and textile raw materials

The selected raw materials undergo refinement processes to obtain textile and non-textile materials with specific characteristics that meet the quality standards required for the production of BasicNet products. This is followed by a quality control to ensure that the materials' physical properties comply with technical specifications. The refined materials or semi-finished components, including natural or synthetic textiles, zips and other plastic and metal components, are subsequently transported to manufacturing facilities for the next stage in the supply chain.

• Production of BasicNet-branded goods

At the Sourcing Centre, refined materials and semi-finished components are selected for manufacturing, ensuring compliance with the technical and quality requirements established by the Group. The production process involves transforming materials into finished products, followed by labelling and packaging. The pricing of finished goods is then integrated into the Company's marketplace, allowing for efficient supply chain management in terms of quality and production volumes and timelines.

• Packaging production

Alongside product manufacturing, packaging solutions are developed to ensure product safety along the entire logistics chain. Packaging, primarily made from plastic and paper materials, is designed to respond to quality standards while focusing on responsible solutions to reduce the environmental impact. Once produced, the packaging is distributed through a logistics system that ensures supplychain optimisation.

Proprietary operations:

• BasicNet Business System and Retail (Franchisees)

The Group's digital ecosystem is built on an advanced IT infrastructure, enabling the integrated management of all supply chain processes. Through the development of new software and the coordination of information flows between different business functions and licensees, BasicNet ensures effective control over production and commercial operations.

• Proprietary licensees and brand-owning companies

Proprietary licensees and brand-owning companies1 manage the purchase of finished products through the corporate marketplace, using pricing provided by Sourcing Centres based on quality and volume requirements. Once acquired, the products are distributed to target markets through wholesale channels and direct sales at BasicNet-branded sales points, including Brand Stores, Brand Outlets and Discount Stores. Integration with the Group's digital platforms ensures single-channel offer management.

• Product definition and design

The development of BasicNet products follows a structured process, beginning with an analysis of market trends and consumer preferences. The following phases include brainstorming and conceptualisation, with the generation of innovative ideas, followed by technical design to define materials, shapes, colours and features. Prototyping allows for the evaluation of physical product characteristics before large-scale production, while trend analysis enables improvements to be made where necessary. The process concludes with the registration of patents and other forms of intellectual property protection.

• Proprietary operations: Support processes

Business operations are supported by strategic human resource management, which includes recruitment, training and employee development. Technological infrastructure ensures the efficient functioning of business processes, while financial management oversees budgeting and reporting. Legal compliance and intellectual property protection are covered by legal services, while the procurement function handles the sourcing of materials and services necessary for business operations. Finally, property management ensures the maintenance and optimisation of the Group's commercial and residential spaces, which cover over 30,000 square metres.

Downstream:

• Commercial Licensees

Commercial licensees play a key role in the distribution of BasicNet products, purchasing goods through the company marketplace and managing their marketing within their respective regions. This model enables independent entrepreneurs to operate under the Group's brands, ensuring widespread market presence worldwide.

• End customer

BasicNet products are used by end consumers, who benefit from their quality, design and functionality.

¹ K-Way S.p.A., K-Way France S.a.s, Kappa S.r.l., Kappa France S.a.s, Kappa Sport Iberia S.L., Sebago S.r.l., Superga S.r.l., and Basic Properties America Inc.

Brief overview of economic and financial results

During the year, BasicNet achieved positive economic and financial results, with consolidated revenues reaching Euro 415.8 million, marking an increase on the previous year. Direct sales also grew by 0.4% on the previous year, while royalties from commercial and production licensees increased by 4.0% on 2024. EBITDA amounted to Euro 29.3 million, compared to Euro 61.1 million in 2024. Excluding non-recurring items, proforma EBITDA amounted to Euro 54.1 million, reflecting a trend more consistent with the Group's operating performance. For more details on the Group's key economic and financial results, please refer to the "2024 FINANCIAL PERFORMANCE OVERVIEW" section of the Directors' Report.

The Group sustainability strategy

BasicNet's strategy is focused on sustainability, integrating environmental, social and governance (ESG) aspects into all its activities. Although the Group does not have formal, specific targets related to significant product groups, customer categories or geographical areas, it has nonetheless launched numerous initiatives to promote a systemic approach to sustainability. The Group continues to develop and integrate collections using responsible materials, making them available to its network of licensees. In addition, it is committed to the continuous improvement of both its production processes and supply chain. The Group strongly believes that reducing its social and environmental impact is an ongoing journey, with the objective of growing sustainably while offering increasingly responsible products.

A key element of BasicNet's responsible strategy is innovation in design, with a particular focus on materials. Brands within the Group, including K-Way, Kappa, Superga, Briko and Sebago, are committed to developing products that satisfy both aesthetic and functional consumer needs, while adhering to sustainability principles. Additionally, the global network of licensees, which is an integral part of BasicNet's Business System, plays a crucial role in driving sustainable economic development. The relationship with licensees is essential for the mutual growth of the Group and helps to promote sustainable practices across all markets in which BasicNet operates. This approach strengthens the Company's economic standing while also promoting sustainability on a global scale.

The Group focuses not only on improving its products and processes but also on reducing its environmental impact across all operations. Within this framework, BasicNet continues to pursue a sustainable growth model, striving to balance innovation with respect for the environmental.

[SBM-2] Interests and views of stakeholders

In its operations, BasicNet has always sought to create value for its shareholders and, more generally, all those who have a stake in the Group's business. Accordingly, as part of its pursuit of sustainability, in 2022 BasicNet updated the mapping of its main stakeholders, conducting an analysis of its business and with the participation of Group management. In the second half of December 2025, the acquisition of new brands led to a change in the reporting scope, which will result in changes to the mapping process in 2026.

The main stakeholders include groups directly linked to business activities, such as Group Resources, Investors, Shareholders and the Financial Community, the Public Sector, Governmental and Control Bodies and the Local Communities in which the Group operates. Due to the specific nature of BasicNet's business system, Sourcing Centres and Licensees play a significant role. Both are commercial partners to the Group and belong to the broader category of clients and consumers (together with the stores involved in retail activities) and suppliers (a category which includes the Group's non-core suppliers of goods and services and Sourcing Centres, i.e. the core suppliers of the subsidiary BasicItalia S.r.l.., Kappa S.r.l., Sebago S.r.l., Superga S.r.l., K-Way S.p.A. and K-Way France S.a.s. (and its subsidiaries) proprietary licensees). In addition, of particular importance to the Group's activities in Italy are the wholly-owned franchisees of the subsidiaries: KappaRetail S.r.l., K-WayRetail S.r.l., SebagoRetail S.r.l., Superga Retail S.r.l., K-Way France S.a.s. and Kappa France S.a.s.

Figure 1 Basicnet Group stakeholders

To ensure effective, uniform pursuit of its goals that makes the most of the roles and potential of its stakeholders, the Group participates in various trade associations (such as Federazione Manageritalia, the Turin chapter of ASCOM - Confcommercio and the Turin Industrial Union).

BasicNet actively engages with its stakeholder categories using various methodologies. Group employees are involved through training and development programmes, onboarding follow-ups and the promotion of initiatives such as "BasicPress.com", the Group's online press agency, which keeps employees regularly informed about Group news, initiatives and social and sporting events, which are held annually at the Basic Village, including in virtual formats.

Investors, shareholders and the financial community receive updates via regular meetings and Financial and Non-Financial Reports. Suppliers and Sourcing Centres participate in initiatives to improve quality, in compliance with regulations. Licensees and Franchisees are actively involved in marketing and product strategies. Additionally, BasicNet's "Powered by" services oversee the continuous and progressive development of the IT platform, which enables communication between the various network licensees, in addition to designing, developing and coordinating the Group's communication and IT systems. Customers and consumers are engaged through product feedback and loyalty initiatives. Public Authorities, governmental and regulatory bodies are consulted to ensure compliance with public policies and regulations, while local communities are involved through corporate responsibility projects and the sponsorship of sports events.

Stakeholder engagement is carried out through both direct and indirect channels, including regular meetings, public consultations and the integration of stakeholder needs into business strategies. Internal working groups and various regional managers are responsible for managing relationships. The objective in this regard is to foster sustainable growth, ensure that the Group's objectives are aligned with stakeholder expectations and improve economic, social and environmental performance.

BasicNet monitors engagement results by tracking stakeholder satisfaction, using various types of feedback management and performance analysis. The results are integrated into strategic decisions, enabling the Company to adapt its policies based on emerging needs, ensuring transparency and continuous improvement.

THE GROUP'S DOUBLE MATERIALITY

[SBM-3] Material impacts, risks and opportunities and their interaction with strategy and business model.

[IRO-1] - Description of the processes to identify and assess material impacts, risks and opportunities

[IRO-2] Disclosure Requirements in ESRS covered by the undertaking's sustainability statement

Overview

Since 2024, BasicNet has adopted the double materiality principle to identify and assess ESG topics relevant to its business. The double materiality assessment process takes into account two dimensions, as required by the Corporate Sustainability Reporting Directive (CSRD): impact materiality and financial materiality. The first dimension seeks to identify the impacts that BasicNet has, or may have, on each sustainability topic. The second dimension seeks to assess the extent to which these topics could affect the Group's ability to create value and its financial performance (risks and opportunities).

The double materiality assessment identifies a set of impacts, risks and opportunities that are associated with the Group and considered material. This process has been developed for BasicNet in accordance with the European Sustainability Reporting Standards (ESRS), taking into account developments in the current regulatory context.

Identifying impacts, risks and opportunities

In 2024, the process of identifying impacts, risks and opportunities (IRO) was based on a review of topics identified in previous reporting years. In particular:

impacts were defined through a contextual analysis that resulted in the definition of a long list of 40 impacts, with an approach in which mitigation actions are not considered. During this phase, short-, medium- and long-term positive, negative, actual and potential impacts on people and the environment were considered.
[53 c] the risks were identified and reviewed based on the Group's Risk Universe, which is regularly updated through Enterprise Risk Assessment activities;
opportunities were identified based on sector trends and market developments, in addition to ESG initiatives adopted or planned in various areas.

In 2025, the double materiality assessment process was revised in order to update its outcomes. The practices adopted by BasicNet's competitors and industry best practices were also taken into account with a view to updating the impacts, risks and opportunities (IROs) identified in 2024 and better reflecting the requirements of the current reporting year. The outcome of the double materiality assessment resulted in the definition of an updated list of IROs, which in turn informed the identification of material Disclosure Requirements (DRs) to be reported. Compared with the previous year, a long list of 47 impacts was identified. In addition, compared with 2024, reporting was expanded to include ESRS E3 – Water and marine resources, in relation to the Group's upstream activities. Further details are provided in the Annex to this document.

The impacts identified include those related to the Company's own operations and its upstream and downstream value chain, including its products and services and business relationships. The risks and opportunities considered could have, or already have (positive or negative) repercussions for the Organisation in the short, medium or long term and may arise from past or future events.

The level of disaggregation adopted [see ESRS 1 par.55] accounts for both geographical specificities and business diversity, ensuring consistency and sufficient detail for the accurate interpretation of information. In particular, the Group's preliminary analysis indicated that, given its characteristics, it was not necessary to disaggregate the IROs, which are to be considered valid for the Group as a whole. Regarding the activities of Basic Village (Real Estate) and BasicInvestments (investments), the IROs related to property and investment management are already included in the general IROs identified.

Stakeholder engagement

The assessment of impacts, risks and opportunities in 2024 involved the engagement of internal stakeholders, selected for their expert insights into the IROs to be evaluated (CSO, HR, Corporate Affairs, Internal Audit, Purchasing, Sourcing and Operations, Facility Manager, Internal Audit, K-Way, Sebago, Superga, Sebago, Kappa, Robe di Kappa, Briko). These stakeholders provided in-depth knowledge of both the Group's inside-out (impacts) and outside-in (financial risks and opportunities) effects. In conducting daily operational activities, internal stakeholders constantly interact with key stakeholders (e.g., customers and consumers, Group staff and suppliers) in relation to the IROs identified, and with qualified consultants, helping to bring market and external stakeholder perspectives into the evaluation process. Consultations with these functions were carried out through dedicated and direct engagement, enabling an active dialogue on ESG topics. Similarly, for the 2025 reporting year, relevant internal stakeholders were engaged using comparable methods to validate the findings of the 2024 analysis, incorporating considerations that emerged during the activities described above.

The analysis of individual IROs was based on qualitative considerations, including assessments of the geographical areas in which the Group and its value chain operate, production processes and findings from engagement, verification and communication activities with value chain stakeholders to identify material IROs.

In addition, the Group's CSO and the Risk and Internal Audit functions are involved in the entire process. This allows for a comprehensive overview of the Group's IROs and the ability to acquire a solid awareness of the most material ESG topics for the Group.

For this reporting year, the double materiality assessment process did not involve external stakeholders.

IRO assessment methodology

The methodology for assessing and prioritising impacts is based on four parameters:

Scale: how serious the negative impact is or how beneficial the positive impact is for people or the environment;
Scope: how widespread the impact is (in relation to the percentage of employees, geographical locations or affected markets);
Irremediable character: the difficulty remedying the impact in terms of severity of the damage;
Likelihood: the probability of the impact occurring within the considered time horizon. Likelihood is only assessed for potential impacts.

The score assigned to each impact (severity) is determined by the average of the scale, scope and irremediable character factors multiplied by the likelihood of occurrence. The parameters are evaluated using a scale from 1 to 5. In addition, each impact is associated with the most significant time horizon, following the definition and categorisation of timelines aligned with the risk and opportunity assessment, as described below.

Negative impacts linked to human rights are further analysed during the consolidation phase in order to prioritise severity over likelihood (see ESRS 1, section 3.4).

Given the nature of Basicnet's business, negative human rights impacts related to resource management within its own operations (ESRS S1) and the workforce along the value chain (ESRS S2) – mainly considering the supply chain and the sourcing centres – are considered more significant for the latter category.

The methodology for determining financial materiality is aligned with the Group's corporate risk management framework, including the quantitative and qualitative scales and various types of financial effects. The only exception relates to time horizons, which are assessed over a three-year period within the Group's ERM, and are considered across three time horizons for the purposes of the financial materiality assessment:

Short term: one year, aligned with the current reporting period;
Medium term: three years, in line with the Enterprise Risk Management (ERM) framework;
Long term: more than three years.

The risk assessment involves an analysis of both the scale and the likelihood of occurrence, considering the residual risk (except for an intrinsic approach for climate-related risks), defined as follows:

Scale: the scale, be it positive or negative, of financial effects (including those related to operational, reputational or compliance-related impacts) linked to the evaluation of risks and opportunities;
Likelihood: the probability of occurrence of these risks and opportunities.

Definition of materiality thresholds

The assessment of IROs that are potentially material for the Group is supported by materiality thresholds, in order to identify the most significant IROs for the Group. IROs with a score below the materiality threshold are excluded from the final list of material IROs.

Specifically, the materiality threshold for impacts follows a risk-based approach, whereby impacts are considered material when they have both high relevance and low likelihood, or when they have low relevance and high likelihood, on a sliding scale. For risks and opportunities, the Group adopts a materiality threshold maintaining a more cautious approach than that used in the Group's ERM framework, while remaining below the identified Risk Appetite threshold.

Approval and internal control system

The management of Enterprise Risk Management (ERM) and the double materiality assessment are closely interconnected, as both focus on managing risks and opportunities that impact financial performance and sustainability. While corporate risk management adopts a structured approach to identify, assess and address risks that could affect the organisation's objectives, including environmental, social and governance (ESG) risks, the double materiality analysis under the CSRD complements the ERM framework by assessing how sustainability factors influence financial position, and how the Company's activities impact society and the environment. Together, these approaches ensure a comprehensive understanding of risks and opportunities, integrating ESG considerations into the strategic decision-making process and improving transparency for stakeholders.

The outcomes of the double materiality assessment, together with the draft Sustainability Statement, are approved annually by the CSO and are submitted to the CRRPC, which provides its opinion on the work carried out and reports to the Board of Directors for final approval.

Results of the double materiality assessment

Following updates to the double materiality assessment, 20 material impacts, nine risks and six opportunities were identified. The ESRS areas covered by the identified IROs encompass environmental, social and governance aspects and include:

Topical Standard	Impacts	Risks	Opportunity
ESRS E1 - Climate change	4	3	2
ESRS E3 - Water and marine resources	1	-	-
ESRS E5 - Circular economy	3	-	-
ESRS S1 - Own workforce	5	2	1
ESRS S2 - Workers in the value chain	3	2	1
ESRS S4 - Consumers and end-users	1	1	2
ESRS G1 - Business conduct	3	1	-
Total	20	9	6

Table 4 - Material IROs by topic standard

In the next part of this section, a complete list of material IROs is provided, clustered according to the relevant Topical Standard. Each IRO is accompanied by a description that includes an indication of the phase within the value chain where it originates, and its respective time horizons.

BasicNet's double materiality assessment highlighted the materiality of social topics for the Group, including not only its own workforce but also workers in the value chain, and consumers and end-users of products marketed under the Group's brands (ESRS S1, S2 and S4).

From an environmental perspective, the IROs identified are closely linked to climate change (E1), water withdrawal and consumption (E3), and circular economy activities (E5). This is seen in the contribution to greenhouse gas emissions and water consumption, and in relation to the potential impacts on the environment related to raw material use and waste generation along the value chain.

Regarding corporate governance topics (G1), in continuity with the impacts identified during the previous year, issues linked to managing the supply chain and anti-corruption remain material. However, when evaluating issues linked to managing the supply chain, specific information on payment practices has been omitted from the Sustainability Statement as the double materiality assessment determined that these aspects are not material given the characteristics of the Group's supply chain and business.

Finally, we note that the BasicNet Group's double materiality assessment considered all impacts, risks and opportunities related to sustainability topics regulated by the ESRS. Following the materiality assessment, and in accordance with ESRS 1 and ESRS 2, the topics of pollution (E2), biodiversity (E4) and local communities (S3) will not be reported by the Group, as the double materiality assessment did not deem them material for its business, value chain and business relationships.

[48g] Compared to the 2024 double materiality assessment, impact materiality increased from 18 to 20 total impacts. This change is mainly attributable to:

• the updated materiality assessment for the ESRS E3 topic, with specific reference to the impact related to water withdrawal and consumption (within the value chain), under the sub-sub-topics water consumption and withdrawal. This assessment was updated following further refinement of the methodology used and additional analysis conducted during the year;

• the introduction of a new impact for the ESRS E1 topic, sub-topic energy, relating to the reduction of energy use along the supply chain (upstream activities);

• the inclusion of an additional impact for the ESRS S2 topic, relating to workers' rights in the value chain (both upstream and downstream), with reference to the sub-sub-topics: secure employment, working hours, adequate wages, social dialogue, freedom of association, collective bargaining and work-life balance.

In 2024, two separate impacts were identified within the ESRS S2 topic relating to the sub-sub-topics forced labour and child labour. In 2025, these were consolidated into a single impact, with a view to streamlining and ensuring greater consistency.

With regard to financial materiality, the overall number of risks and opportunities remained the same. However, one opportunity previously considered material was reassessed as non-material in 2025, while a new opportunity was introduced under the ESRS S4 topic, relating to the provision of traceable and transparent information, under the sub-topic access to (quality) information.

[SBM3 48d, 48f] Regarding the relevant risks and opportunities identified by the Group, no current financial effects were recorded for the 2025 reporting year. In addition, BasicNet has not yet formalised a specific resilience plan to address material impacts, risks and opportunities, nor has it conducted a quantitative analysis of its capacity to adapt.

The list of disclosure requirements covered in the 2025 BasicNet Sustainability Statement is detailed in the tables included in the Annex to this document.

Below is a complete list of material impacts, risks and opportunities (IROs). This list provides a detailed overview of identified IROs, indicating their connection to the Group's activities (own operations) or value chain (upstream, downstream), in addition to whether each IRO is considered material in the short, medium or long term.

Table 5 - List of all material IROs for BasicNet

E1 CLIMATE CHANGE
			Value chain			Time horizon
Sub-topic and sub sub-topic	Description	IRO	Up str ea m	op Ow er n ati on s	Do wn str ea m	Sh or t-t er m	Me diu m- ter m	Lo ng -te rm
Climate change mitigation	Contribution to climate change through direct and indirect energy GHG emissions related to activities at Group offices and sites	Impact (Negative - Actual)		•		•
Climate change mitigation	Generation of indirect climate-changing emissions produced in the value chain as a result of activities carried out	Impact (Negative - Actual)	•		•	•
Energy	Reduced energy stock, due to energy use (predominantly from non renewable sources) in operational activities (e.g. in the highly energy-intensive retail area)	Impact (Negative - Actual)		•		•
Energy	Reduction of energy stock, resulting from energy use during the extraction of raw materials, production processes and the treatment of fabrics with water or chemical solutions	Impact (Negative - Actual)	•			•
Climate change mitigation	Risk that the Group invests in and manufactures products containing materials that are incompatible with environmental regulations or contribute negatively to greenhouse gas emissions. If the Group fails to adopt measures or adopts inadequate measures and controls to reduce its environmental impact and limit emissions, it could face additional costs, such as fines and penalties, reputational damage, and a	Risk		•			•	•

	loss of image related to its climate change mitigation efforts.
Climate change adaptation	Potential business interruption due to accidents (e.g. fires) or extreme weather events (e.g. floods) that damage sourcing centre facilities, production sites or distribution centres of its suppliers and could reduce the availability of key products or materials.	Risk	•			•	•
Energy	Potential risk of increased operating costs due to increased services used to meet government and/or market requirements related to climate change (e.g. promotion of energy efficiency solutions, use of renewable sources and emission reductions).	Risk	•	•		•	•
Climate change mitigation	The adoption of market best practices with respect to climate regulations may strengthen BasicNet's reputation, thereby attracting more investors, creating stronger partnerships with banks and other financial institutions, suppliers, customers and other stakeholders.	Opportunity		•		•	•
Climate change mitigation	Improving BasicNet's ESG profile may provide opportunities for new financing and better credit terms.	Opportunity		•		•	•
E3 - WATER AND MARINE RESOURCES
Water consumption Water withdrawal	High levels of water withdrawal and consumption in textile processes require significant quantities of water and contribute to water use, with impacts on	Impact (Negative - Actual)	•		•

	the environment and local communities.
E5 - CIRCULAR ECONOMY
Resource inflows, including resource use	The processing and intensive use of natural resources (such as cotton) and non-natural resources (synthetic fibres) to produce clothing and footwear contribute to their depletion and generate a negative environmental impact.	Impact (Negative - Actual)	•			•
Resource outflows related to products and services	Potential negative impact arising from resource outflows associated with production processes, linked to the inefficient use of recycled or recyclable materials, which could contribute to the increased consumption of natural resources. In addition, the use of unnecessary and non biodegradable packaging contributes to the consumption of resources.	Impact (Negative - Potential)	•				•
Waste	Improper management of waste and scrap (both hazardous and non hazardous) during production processes, in addition to unsold and non recyclable materials at the sales stage, generates significant negative environmental impacts	Impact (Negative - Actual)	•		•	•
S1 - OWN WORKFORCE
Working conditions - Work-life balance	Increased overall level of employee well-being and work-life balance satisfaction due to the implementation of specific welfare and well-being programs (e.g. parenting support and services for care givers).	Impact (Positive - Actual)		•		•

Working conditions - Health and safety	Worker injuries or ill health occurring as a result of inadequate maintenance and management of Group assets and work spaces that may expose employees to significant health (i.e. workplace accidents) and safety risks in the course of their activities.	Impact (Negative - Actual)	•	•
Equal treatment and opportunities for all - Gender equality and equal pay for work of equal value	Perpetuation of wage disparities between men and women through the adoption of unequal and discriminatory pay policies, which may lead to dissatisfaction, reduced motivation and loss of qualified female talent.	Impact (Negative - Potential)	•		•
Equal treatment and opportunities for all - Training and skills development	Improving workers' skills through training and professional development activities, general and technical programs, including those linked to growth targets and personal appraisals (e.g. career development plans).	Impact (Positive - Actual)	•	•
Equal treatment and opportunities for all - Gender equality and equal pay for work of equal value	Creation of an inclusive work environment that actively promotes social justice and contributes to the reduction of gender inequality in and beyond the corporate scope, improving people's well-being.	Impact (Positive - Actual)	•	•
Working conditions - Social dialogue	Failure to comply with employee agreements and expectations may damage the company's reputation among current and potential employees, customers, and other stakeholders. Negative publicity and loss of trust may lead to decreased customer loyalty, reduced sales, and difficulties in attracting and retaining top talent.	Risk	•			•

Equal treatment and opportunities for all - Training and skills development	Risk that staff are not adequately trained, or that training may be ineffective because it is delivered without regard to the age and/or educational level of staff. Risk related to the non-existence or discontinuity of investment in staff training, resulting in the inability to learn new skills or improve acquired skills.	Risk		•			•
Working conditions - Work-life balance	Ensuring a competitive benefits package may significantly reduce employee turnover. By offering attractive benefits, the company may retain qualified employees, reducing the costs associated with hiring, training and onboarding new staff. Lower turnover rates also mean fewer business interruptions and business process continuity.	Opportunity		•			•
S2 - WORKERS IN THE VALUE CHAIN
Working conditions – Secure employment, working hours, adequate wages, social dialogue, freedom of association, collective bargaining and work life balance	Failure to safeguard workers' rights in the value chain, including in relation to secure employment, sustainable working hours, adequate wages, social dialogue, freedom of association, collective bargaining and work-life balance, could result in negative impacts on employee well-being and satisfaction	Impact (Negative - Potential)	•		•	•	•
Working conditions - Health and safety	Worker injuries or ill health along the value chain occurring as a result of failure to comply with and/or properly implement H&S standards in the performance of the licensees' and sourcing centres' core operations (e.g. work-related injuries	Impact (Negative - Potential)	•			•	•

Other work-related rights - Child labour and forced labour	Violations of human rights and workers' fundamental rights in the supply chain, including discrimination against vulnerable groups, child labour and forced labour, could result in negative impacts on their quality of life	Impact (Negative - Potential)	•			•
Other work-related rights - Privacy	Risk related to inadequate management and protection of information with regard to Group sensitive information and that of the various stakeholders. Risk of erroneous/unintentional disclosure of confidential information managed by the Group.	Risk		•		•
Working conditions – Secure employment, working hours, adequate wages, social dialogue, freedom of association, collective bargaining and work life balance, health and safety	Risk related to violations of workers' rights (including freedom of association, collective bargaining, adequate wages, overtime payment, fair working hours, health and safety, social dialogue) by business partners along the Group's value chain. Such infractions can damage brand reputation and generate operational impacts, production delays and additional costs related to the need to identify and qualify alternative suppliers.	Risk	•		•	•
Working conditions - Health and safety	Increased competitiveness and reputation in the market through the use of suppliers who provide responsible working conditions, ensuring compliance with occupational health and safety, equal treatment and opportunities for all.	Opportunity	•			•

	S4 - CONSUMERS AND END-USERS
Inclusion of consumers and/or end-users - Responsible marketing practices	Potential inefficiency in combatting counterfeiting may bring to market products that are of poor quality, lack quality and safety controls, and are potentially harmful to consumers.	Impact (Negative - Potential)		•			•
Inclusion of consumers and/or end-users - Responsible marketing practices	Risk of the BasicNet Group's products/brands being copied and marketed by third parties without Group's consent.	Risk	•		•		•	•
Inclusion of consumers and/or end-users - Responsible marketing practices	Opportunity for a communication/marketing activity related to its brands and products/services and particularly related to the Group's sustainability performance/products to positively affect the Group's business and reputation.	Opportunity		•			•	•
Information-related impacts for consumers and/or end-users - Access to (quality) information	Economic, legal and reputational opportunity arising from the ongoing provision of traceable and transparent product information (adoption of BasicLabel project and alignment with the Ecodesign for Sustainable Products Regulation)	Opportunity		•			•	•
G1 - BUSINESS CONDUCT
Management of relationships with suppliers, including payment practices	Transparent and collaborative management of relationships enables sourcing centres to operate in a context of trust, supported by clear communication and continuous access to the information required to enhance their capabilities	Impact (Positive - Actual)		•		•

Management of relationships with suppliers, including payment practices	Potential non-compliance with the principles of fair behaviour and minimum standards of ethical conduct along the value chain, resulting in negative repercussions on the financial community, and consequently reputational damage.	Impact (Negative - Potential)	•				•	•
Corruption and bribery - Prevention and detection including training	Targeted employee training on anti-corruption topics helps raise awareness among employees and foster a corporate culture based on ethics and transparency	Impact (Positive - Actual)		•		•
Management of relationships with suppliers, including payment practices	Risk that alliances or other relationships/collaborations with counterparts (licensees-manufacturers sponsors) are inefficient and/or ineffective and/or the result of inadequate selection, and may adversely affect the achievement of the Group's intended goals and standards (e.g. product quantity and quality).	Risk	•		•			•

ENVIRONMENTAL INFORMATION (ESRS E)

EUROPEAN TAXONOMY

Regulation 2020/852 on the EU Taxonomy provides a classification of economic activities that are considered environmentally sustainable. To qualify as environmentally sustainable, an economic activity must contribute substantially to one or more of the six objectives set out in Article 9 of the regulation. On June 4, 2021, Delegated Regulation 2021/2139 2 was adopted, which defines the technical screening criteria that economic activities must meet to be aligned with the first two climate goals (Climate Change Mitigation and Climate Change Adaptation). The remaining four environmental objectives (Sustainable Use and Protection of Water and Marine Resources, Transition to a Circular Economy, Pollution Prevention and Control, and Protection and Restoration of Biodiversity and Ecosystems) were regulated through the adoption of Commission Delegated Regulation (EU) 2023/24863 on June 27, 2023.

The process of identifying activities aligned with the European Regulation can be divided into three main stages:

The first step is the eligibility analysis, which seeks to determine the activities carried out by the Group that match the activities listed and described in the annexes of the Climate Delegated Act (Annex I on climate change mitigation and Annex II on climate change adaptation) and the Environmental Delegated Act (Annex I on sustainable use and protection of water and marine resources, Annex II on transition to a circular economy, Annex III on pollution prevention and control, and Annex IV on protection and restoration of biodiversity and ecosystems) and that may potentially contribute to the six environmental objectives.

Next, a detailed assessment is made of the alignment of the identified economic activities with the Substantial Contribution criteria, the Do No Significant Harm criteria for Other Environmental Objectives (DNSH), and minimum safeguards.

Finally, the indicators (KPIs) required by the Regulations are calculated, i.e. the shares of turnover, capital expenditures (CapEx) and operating expenditures (OpEx) attributable to the identified economic activities.

These indicators were reported in the tables required by Annex V of the Environmental Delegated Act, which made some changes to the Commission's Delegated Regulation (EU) 2021/2178, also known as the "Disclosure Delegated Act."

The Group has exercised the option not to adopt the measures provided for under Commission Delegated Regulation (EU) 2026/73.

Eligibility analysis

For FY 2025, the BasicNet Group has updated its eligibility analysis, which included the identification of activities carried out by the Group and its subsidiaries, attributable to Ateco codes as reported in the Regulation, which have the potential to contribute to the six environmental objectives. In addition, the Group analysed any eligible activities with reference to CapEx (Annex 1 of Delegated Regulation (EU) 2021/2178, par. 1.1.2.2 (c)) and OpEx (Annex 1 of Delegated Regulation (EU) 2021/2178, par. 1.1.3.2 (c)) related to the purchase of products from eligible economic activities and aligned with the Taxonomy and individual measures that enable the target activities to reduce their emission profile.

Specifically, the analysis did not identify any activities related to the Group's revenue items as eligible. Although BasicVillage and BasicAir (which fall under taxonomy categories 7.7 and 6.19 respectively) are part of the Group, they do not generate revenue (understood as direct sales or royalties), but rather "other income", mainly from intra-group transactions.

However, in relation to CapEx and OpEx associated with the outputs of eligible activities or individual measures, activities 7.7 and 6.19 were included. Overall, the following eligible activities were identified:

2 Climate Delegated Act

³ Environmental Delegated Act divided into Annexes I, II, III, IV, and V.

• 6.19 - Passenger and freight air transport, which contributes to the climate change mitigation target and refers to the activity of leasing the aircraft owned by the company BasicAir to third parties;

7.2 Renovation of existing buildings, which contributes to the climate change mitigation objective and refers to the ongoing renovation activity at BasicVillage4;
7.7 Acquisition and ownership of buildings, which contributes to the climate change mitigation target and refers to the activity of renting out properties owned by BasicVillage to third parties;
6.5 Transport by motorbikes, passenger cars and light commercial vehicles, which contributes to the climate change mitigation target and refers to leased cars that are allocated to Group employees;
7.3 Installation, maintenance and repair of energy efficiency equipment contributing to the climate change mitigation objective;
1.2 Manufacture of electrical and electronic equipment, which contributes to the transition to a circular economy objective and includes capital expenditures for the purchase of computers and business telephones.

Alignment analysis

The Group conducted the alignment analysis against the Substantial Contribution and Do Not Significant Harm (DNSH) criteria for activities identified as eligible. Specifically:

• 6.19 - Passenger and freight air transport:

BasicAir S.r.l. owns a used Cessna Citation VII aircraft with a Maximum Take-Off Weight (MTOW) of approximately 10 tonnes. Expenditures incurred pertaining to activity 6.19 fall under the climate mitigation contribution criteria if the aircraft has a certified CO2 emission value at least 11% below the limit for new types set by the International Civil Aviation Organisation (ICAO) standard. The Group company has not yet carried out such detailed analyses with respect to the volume of CO2 emissions compared to what is required for new aircraft types by ICAO, which is why the Group does not consider the activity to be in line with the Substantial Contribution to climate mitigation criteria. For this activity, Annex I of the Climate Delegated Act provides DNSH criteria on two environmental objectives. Transition to a circular economy: waste generation must be prevented in the use phase and residual waste must be measured in accordance with the waste hierarchy (a key concept covered in Directive 2008/98/EC). In this case, BasicAir and the activities it carries out are compliant as they are in line with current European regulations. Pollution prevention and control: the regulation requires aircraft to comply with certain parameters in terms of noise pollution and essential safety requirements. In this case, although regulatory compliance is met, as no specific study has been carried out on this issue, the Group has taken a conservative approach, deeming the criterion not met.

• 7.2 - Renovation of existing buildings

During the year, renovation work began on the property owned by BasicVillage at 78 Via Padova (Turin). This work will be completed in mid-2026.As regards the criteria for substantial contribution to climate change mitigation, the work complies with the requirements applicable to major renovations. For this activity, Annex I of the Climate Delegated Act provides DNSH criteria on four environmental objectives. Specifically:

− Climate change adaptation: an analysis of vulnerability to acute and chronic physical climate hazards that may impact the business is required. Group companies have not yet conducted

⁴ The activity can also potentially be associated with circular economy objective 3.2; for the purposes of this analysis, it has been considered relevant with respect to the climate change mitigation objective.

such detailed analyses; therefore, adopting a conservative approach, the criterion is considered not met.

− Sustainable use and protection of water and marine resources; Transition to a circular economy; Pollution prevention and control: in the absence of specific evidence and analysis to demonstrate compliance with the requirements of the regulations, the Group has adopted a conservative approach, deeming these criteria not met.

In light of the above, despite meeting the substantial contribution criteria, the activity is not aligned with the EU Taxonomy.

• 7.7 - Acquisition and ownership of buildings

In 2025, the Group did not purchase any new buildings but carried out management activities in buildings it already owned. This refers specifically to buildings owned by BasicVillage (Milan and Turin). Expenditures pertaining to management (rent and administration) are included in the climate mitigation contribution criteria because the buildings, large non-residential buildings, are efficiently managed by monitoring and assessing energy performance through the presence of a building automation and control system (automation of the lighting system and implementation of software to manage the thermofluidic system), in accordance with Article 14(4) and Article 15(4) of Directive 2010/31/EU.

The only DNSH criterion provided for Activity 7.7 is Climate Change Adaptation: an analysis is required to identify and assess the vulnerability of the economic activity to acute and chronic physical climate hazards. Group companies have not yet carried out such detailed analyses, which is why the DNSH criterion is not met.

• 6.5 - Transport by motorbikes, passenger cars and light commercial vehicles

Expenditures incurred for the purchase and rental of Euro V and Euro VI vehicles fall under the climate mitigation contribution criteria only if the vehicles meet the emission limit of 50 grams of CO₂ per kilometre. Group companies have not yet carried out such detailed analyses, and therefore the Group has adopted a conservative approach, considering the criterion not fully met.

For this activity, Annex I of the Climate Delegated Act provides DNSH criteria on three environmental objectives:

o Climate change adaptation: an analysis of vulnerability to acute and chronic physical climate hazards that may impact the business is required. Since this analysis is the responsibility of the vehicle manufacturers and no information on this is available, the Group has taken a conservative approach and considered the activity to be non-compliant with this criterion.
o Transition to a circular economy: vehicles must meet certain requirements for reusability and recyclability, and waste management measures must be in place in the use and end-oflife phases. Since no specific information was obtained from the manufacturers, the Group took a conservative approach and considered the criterion not met.
Pollution prevention and control: the regulation requires vehicles to comply with certain parameters in terms of emissions, type approval and efficiency. In this case, the Group's fleet vehicles are compliant, as they meet current European regulations.1.2 - Manufacture of electrical and electronic equipment

In 2024, the Group made investments in electrical and electronic equipment (e.g. PCs, telephones, etc.) for some Group companies. However, the Group considers the criteria for substantial contribution not met in the absence of sufficient evidence from suppliers. In addition, Annex II of the Environmental Delegated Act provides DNSH criteria with respect to the objectives of climate change adaptation and mitigation, sustainable use and protection of water and marine resources, pollution prevention and control, and protection and restoration of biodiversity and ecosystems. In the absence of sufficient information from suppliers to allow for a full assessment of compliance with the criteria, the Group considers the activity to be unaligned when taking a conservative and precautionary approach.

In conducting activities with respect to the requirements of the Taxonomy, however, the Group has initiated an analysis regarding compliance with the Minimum Safeguards. In particular, BasicNet considered all the issues set forth under Article 18 of the Regulations, analysing their compliance and how they are handled. While the Group does indeed adopt policies, management models and actions through its operations in the areas of human rights, anti-corruption, taxation, and fair competition, it does not reflect the requirements outlined in Regulation (EU) 2020/852 in their entirety.

KPI calculation methodology

Turnover: The numerator for turnover corresponds to the portion of this item for activities considered eligible, which amounts to 0. Specifically, BasicVillage turnover was considered under activity 7.7 and BasicAir turnover under activity 6.19. For both activities, turnover is equal to 0, as they do not generate revenue (understood as direct sales or royalties), but only "other income", mainly from intra-group transactions. The total revenue (denominator), amounting to Euro 414.7 million, corresponds to consolidated direct sales revenue of Euro 348.3 million, and royalties and sourcing commissions of Euro 66.4 million (also considering the currency in which the figure is reported). These amounts are shown in the Notes to the Directors' Report. The KPI stated as required by Regulation (EU) 2020/852 is defined as the proportion of Taxonomy-eligible Turnover (numerator) divided by the value of Total Turnover (denominator).

CapEx: The CapEx numerator corresponds to the portion of this item attributable to the activities carried out by the Group and its subsidiaries, attributable to Ateco codes as reported in the Regulation (activities 7.7) and to any eligible activities with reference to CapEx (Annex 1 of Delegated Regulation (EU) 2021/2178, par. 1.1.2.2 point (c)) or activities 7.2, 6.5 and 1.2. The CapEx denominator, which is equal to Euro 118.7 million, corresponds to changes in investments in tangible fixed assets of Euro 11.2 million and intangible fixed assets of Euro 39.2 million, including those resulting from business combinations, and increases in right-of-use assets of Euro 68.3 million, as reported in the Explanatory Notes to the Directors' Report. KPIs as required by Regulation (EU) 2020/852 are defined as the proportion of Taxonomy-eligible CapEx (numerator) divided by total CapEx (denominator).

OpEx: The OpEx numerator corresponds to the portion of this item attributable to activities 7.7 and 6.19 and to any eligible activities with reference to OpEx (Annex 1 of Delegated Regulation (EU) 2021/2178, par. 1.1.3.2 point (c)) (activity 6.5). Specifically, the following were considered expenses related to repairs and maintenance of buildings and aircraft, short-term hires of company cars, and any other direct expenses related to the day-to-day maintenance of leased property and store equipment, and other miscellaneous costs and services, such as cleaning expenses. The OpEx denominator includes items required by Disclosure Delegated Act (EU) 2021/2178 and amounts to Euro 6.1 million.

NUCLEAR ENERGY AND FOSSIL GAS RELATED ACTIVITIES

The Group does not carry out nuclear energy and fossil gas related activities

	NUCLEAR ENERGY RELATED ACTIVITIES
1	The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.	NO
2	The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.	NO
3	The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.	NO
	FOSSIL GAS RELATED ACTIVITIES
4	The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.	NO
5	The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.	NO
6	The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.	NO

Fin cia l ye an ar	20 25		Sub nti al c tri bu tio rit eri sta on n c a					DN SH ite ria ( Do No t Si ific ly Ha ) ant cr es gn rm
Eco mi ctiv itie no c a s	Code	Revenues	Proportion of Turnover, 2025	Climate change mitigation	Climate change adaptation	Water	Pollution	Circular economy	Biodiversity	Climate change mitigation	Climate change adaptation	Water	Pollution	Circular economy	Biodiversity	Minimum safeguards	turnover, 2024 eligible (A.2) proportion o Taxonomy-aligned (A.1) or f	Category: enabling activity	Category: transitional activity
		Eur o th and ous s	%	Yes ; No ; N/ EL	Yes ; No ; N/ EL	Yes ; No ; N/ EL	Yes ; No ; N/ EL	Yes ; No ; N/ EL	Yes ; No ; N/ EL	/ Yes No	/ Yes No	/ Yes No	/ Yes No	/ Yes No	/ Yes No	Yes / N o		E	T
A. TA XO NO MY -EL IGI BL E A CT IVI	TIE S
lly nab A.1 En vir tai nta on me sus	le a ctiv	s ( lig itie Ta xon om y-a ne	d)
of Tu iro rno ver env nm tai nab le act sus ( lig d) ( ) Ta A.1 xon om y-a ne	ally ent ivi tie s	0	0%	-	-	-	-	-	-	-	-	-	-	-	-	-	0%
Of wh ich abl ing en		0	0%	-	-	-	-	-	-	-	-	-	-	-	-	-	0%	E
Of wh ich nsi tio l tra na		0	0%							-	-	-	-	-	-	-	0%		T
Eli ibl e b A.2 Ta ut xon om y- g no	nvi t e ron	lly nab le a tai nta me sus	s (n ctiv itie	Ta ot xon	lig om y-a	d a ctiv ne	s) itie
				EL; N/ EL	EL; N/ EL	EL; N/ EL	EL; N/ EL	EL; N/ EL	EL; N/ EL
and hip of Acq uis itio n o wn ers bui ldin gs	7.7	-	0.0 0%	N/ EL	N/ EL	N/ EL	N/ EL	N/ EL	N/ EL								0%
f Pas and reig ht air sen ger tra ort nsp	6.1 9	-	0.0 0%	N/ EL	N/ EL	N/ EL	N/ EL	N/ EL	N/ EL								0%
Tu of Ta lig ibl rno ver xon om y-e iro all tai t ent no env nm y sus ivi tie (no n-T -al act s axo no my ivi tie s) ( A.2 ) act	e b ut nab le ign ed	-	0.0 0%	0%	0%	0%	0%	0%	0%								0%
Tu of Ta rno ver xon om y-e tiv itie s ( .2) Ac A.1 +A	lig ibl e	-	0.0 0%	0%	0%	0%	0%	0%	0%								0%
B. T AX ON OM Y-N ON -EL IGI BL E A	CT IVI	TIE S
of -el Tu Ta rno ver xon om y-n on ivi tie act s	ibl ig e	41 4,7 14	10 0%
TO TA L		41 4,7 14	10 0%

Table 6 - % turnover associated with activities aligned with European Taxonomy

Pr io f t / To l t t ta op or n o ur no ve r ur no ve r
	l d by b Ta ig j ive t xo no m y- a ne o ec	l b le by b Ta ig i j ive t xo no m y- e o ec
C C M	0 %	0 %
C C A	0 %	0 %
W T R	0 %	0 %
C E	0 %	0 %
C P P	0 %	0 %
O B I	0 %	0 %

TOTAL 172,389 100%

l ye Fin cia an ar	25 20			Sub al c bu nti tri tio rit eri sta on n c a				( ific ly ) DN SH ite ria Do No t Si Ha ant cr es gn rm
mi ctiv itie Eco no c a s	Code	CapEx	Proportion of CapEx, 2025	Climate change mitigation	Climate change adaptation	Water	Pollution	Circular economy	Biodiversity	Climate change mitigation	Climate change adaptation	Water	Pollution	Circular economy	Biodiversity	Minimum safeguards (17)	eligible (A.2.) CapEx, 2024 aligned (A.1.) or Taxonomy Proportion of Taxonomy	Category: enabling activity	Category: transitional activity
		€k	%	Yes ; No ; N/ EL	Yes ; No ; N/ EL	Yes ; No ; N/ EL	Yes ; No ; N/ EL	Yes ; No ; N/ EL	Yes ; No ; N/ EL	Yes / No	Yes / No	Yes / No	Yes / No	Yes / No	Yes / N o	Yes / N o	%	E	T
A. TA XO NO MY -EL IGI BL E A	CT IVI TIE	S
A.1 En vir lly tai nta on me sus	nab le a	ctiv itie s ( Ta lig xon om y-a	d) ne
Cap Ex of iro env nm nab le tai act sus ( Ta lig d) ( A.1 ) xon om y-a ne	all ent y ivi tie s	0	0%	-	-	-	-	-	-	-	-	-	-	-	-	-	0%
Of wh ich abl ing en		0	0%	-	-	-	-	-	-	-	-	-	-	-	-	-	0%	E
Of wh ich nsi tio l tra na		0	0%							-	-	-	-	-	-	-	0%		T
A.2 Ta Eli ibl e b ut xon om y- g	nvi t e no	lly tai nab nta ron me sus	le a ctiv itie s (n	Ta ot xon AM N/ AM	lig om y-a AM ; N/ A M	d a ctiv ne AM ; N/ A M	itie s) AM ; N/ A M	AM N/ A M	AM ; N/ A M
Acq nd shi uis itio n a ow ner p of bui ldin gs	7.7	590	0.3 4%	AM	N/ A M	N/ A M	N/ A M	N/ A M	N/ A M								2.3 7%
Tra b bik ort tor nsp y mo es, nd lig ht pas sen ger c ars a l ve hic les rcia com me	6.5	54	0.0 3%	AM	N/ A M	N/ A M	N/ A M	N/ A M	N/ A M								0.2 9%
of Ren tion exi stin ova g bui ldin gs	7.2 / CE 3.2	1,,1 17	5% 0.6	AM	N/ A M	N/ A M	N/ A M	AM	A M N/								0.0 0%
nuf f ele l Ma ica act ctr ure o and ele oni uip ctr nt c eq me	1.2	1,3 05	0.7 6%	AM	N/ A M	N/ A M	N/ A M	AM	N/ A M								3.9 0%
of Cap Ex Ta xon om y-e bu iro t t no env nm nab le tai ivi tie act sus s Ta lig d act xon om y-a ne ( ) A.2	lig ibl e all ent y (no n ivi tie s)	3,0 67	1,7 8%	1.0 2%	0%	0%	0%	6 % 0.7	0%								6.5 6%
A. Cap Ex of Ta xon om y-e s ( .2) ivi tie A.1 +A act	lig ibl e	3,0 67	1,7 8%	1.0 2%	0%	0%	0%	6 % 0,7	0%								6.5 6%
ON OM ON IGI B. T AX Y-N -EL BL	CT E A	S IVI TIE
Cap Ex of Ta -el xon om y-n on ivi tie act s	ig ibl e	16 9,3 22	98 .22 %

Table 7 - % of CapEx associated with activities aligned with the European Taxonomy

100

io f / l Pr Ca Ex To Ca Ex t ta op or n o p p
	l d by b Ta ig j ive t xo no m y- a ne o ec	l b le by b Ta ig i j ive t xo no m y- e o ec
C C M	0 %	1. 0 2 %
C C A	0 %	0 %
W T R	0 %	0 %
C E	0 %	1. 4 1 %
P P C	0 %	0 %
B I O	0 %	0 %

Fin cia l ye an ar	20 25			Sub sta	nti al c tri bu tio rit eri on n c a				DN SH ite ria ( Do No t Si ific ly Ha ) ant cr es gn rm
Eco mi ctiv itie no c a s	de Co	Ex p O	Ex p O of n	m ge an ch d	ge an ch	er at W	ti lu ol	o ec ar it	er iv od	ge an ch d	ge an ch	er at W	ti lu ol	o ec ar	er iv	od sa m uo	ax T or )	li ab en i	sit an
		€k	%	Yes ; No ; N/ AM	Yes ; No ; N/ A M	Yes ; No ; N/ A M	Yes ; No ; N/ A M L	Yes ; No ; N/ A M	Yes ; No ; N/ A M	/ Yes No	/ Yes No	/ Yes No	/ Yes No	/ Yes No	Yes / N o	Yes / N o	%	A	T
A. TA XO NO MY -EL IGI BL E A CT	IVI TIE S
l su ble A.1 En vir ina nta sta on me	tiv itie ac	s ( Ta xon om y-a	lig d) ne
Op tin dit era g exp en ure all iro ent env nm y sus ivi tie s ( Ta lig act xon om y-a ne	of nab le tai d) ( A.1 )	0	0%	-	-	-	-	-	-	-	-	-	-	-	-	-	0%
Of wh ich abl ing en		0	0%	-	-	-	-	-	-	-	-	-	-	-	-	-	0%	A
Of wh ich l nsi tio tra na		0	0%							-	-	-	-	-	-	-	0%		T
A.2 Ta Eli ibl e b ut xon om y- g no	nvi t e ron	lly tai nta me sus	nab le a ctiv itie	s (n Ta ot	xon om y-a	lig d a ne	ctiv itie s)
				AM ; N/ AM	AM ; N/ AM	AM ; N/ AM	AM ; N/ AM	AM ; N/ AM	AM ; N/ AM
Acq nd shi f uis itio n a ow ner p o bui ldin gs	CCM 7.7	640	10. 44%	AM	N/ A M	N/ A M	N/ A M	N/ A M	N/ A M								12. 44%
nd fre ht Pas ig air sen ger a tra ort nsp	CCM 6.1 9	1,8 06	29. 48%	AM	N/ A M	N/ A M	N/ A M	N/ A M	N/ A M								29. 45%
tall nd Ins ati ain ten on, m anc e a air f f f icie rep o ene rgy e ncy ipm ent equ	CCM 7.3	-	0.0 %	AM	N/ A M	N/ A M	N/ A M	N/ A M	N/ A M								0.1 1%
by bik Tra ort tor nsp mo es, and lig ht pas sen ger car s l ve hic les rcia com me	CCM 6.5	44 3	7.2 3%	AM	N/ A M	N/ A M	N/ A M	N/ A M	N/ A M								6.0 6%
Op tin dit era g exp en ure lig ibl bu Ta t xon om y-e e iro all ent env nm y sus ivi tie (no Ta act t s xon om y-a ivi tie s) ( A.2 ) act	of t no tai nab le lig d ne	2,8 89	47 .15 %	47. 15 %	0%	0%	0%	0%	0%								48. 07%
of A. Op Ex Ta xon om y-e ivi tie s ( A.1 +A .2) act	lig ibl e	2,8 89	15% 47.	15 % 47.	0%	0%	0%	0%	0%								48. 07%
B. T AX ON OM Y-N ON -EL IGI BL	E A CT IVI	TIE S
tin dit Op era g exp en ure Ta -el ig ibl ctiv xon om y-n on e a	of itie s	3,2 38	52 .85 %
TO TA L		6,1 27	10 0%

Table 8 - % of OpEx associated with Taxonomy-aligned economic activities

Pr io f Op Ex / To l Op Ex t ta op or n o
	l d by b Ta ig j ive t xo no m y- a ne o ec	l b le by b Ta ig i j ive t xo no m y- e o ec
C C M	0 %	4 7. 1 5 %
C C A	0 %	0 %
W T R	0 %	0 %
C E	0 %	0 %
P P C	0 %	0 %
B I O	0 %	0 %

ESRS E1 - Climate change

[E1 SBM-3] Material impacts, risks and opportunities and their interaction with strategy and business model

[ESRS 2 IRO-1] – Description of the processes to identify and assess material climate-related impacts, risks and opportunities

While performing the Enterprise Risk Management analysis and the double materiality assessment process, described in the paragraph "The Group's double materiality" of the General Disclosures (ESRS 2) chapter, BasicNet did not conduct a resilience analysis on the identified physical and transition risks including a scenario analysis. Therefore, although no formal analysis of climate-related scenarios was conducted, the identification and assessment of physical and transition risks were based on analysis of international institutional sources, the regulatory framework, and BasicNet's internal expertise and knowledge.

This analysis assessed the materiality of different climate-related risks and opportunities relevant to BasicNet's direct operations and its value chain (upstream, direct operations, and downstream), [SBM-3 par. 18], identifying only one physical, material risk over the long term:

• Potential business interruption due to accidents (e.g. fires) or extreme weather events (e.g. floods) that damage sourcing centre facilities, production sites or distribution centres of its suppliers and could reduce the availability of key products or materials.

Similarly, two transition risks, also material over the long term, were identified during the activity:

Risk that the Group invests in and manufactures products containing materials that are incompatible with environmental regulations or contribute negatively to greenhouse gas emissions. If the Group fails to adopt measures or adopts inadequate measures and controls to reduce its environmental impact and limit emissions, it could face additional costs, such as fines and penalties, reputational damage, and a loss of image related to its climate change mitigation efforts;
Potential risk of increased operating costs due to increased services used to meet government and/or market requirements related to climate change (e.g. promotion of energy efficiency solutions, use of renewable sources and emission reductions).

Climate risks are mitigated by BasicNet's business model itself. It employs a "network" business model, where BasicNet does not act as a supplier of the product itself, but as a provider of an integrated set of services, minimising the effects of direct GHG emissions. In addition, BasicNet's business features a large presence in many countries around the world and an extensive network of sourcing centres, which enables it to reduce the risks associated with possible business interruption to a business that is highly concentrated in specific regions.

[20 b - i, ii] However, potential long-term deteriorations in environmental conditions considering high emission climate scenarios could pose a risk, which the Group has assessed as material. [20 c - i, ii] Similarly, the rapid change in the regulatory scenario adopted at global level for limiting global change to 1.5° could cause BasicNet to incur increased operating costs and costs related to possible penalties, which were therefore assessed as material, but only over a long-term time horizon.

BasicNet has implemented specific operational mechanisms to properly manage these risks, including:

the use of antitrust controls that require strategic products to be produced by at least two or three Sourcing Centres (if possible in different regions). In addition, after five years, orders are transferred to a new Sourcing Centre, and BasicNet ensures that no factory devotes more than half of its production capacity to Group-branded products;
the use of contracts with Sourcing Centres that stipulate the commitment of the contracting parties to comply with local and international labour and environmental regulations and the signing of a commitment to abide by the Code of Conduct, based on the major conventions of the International Labour Organization (ILO) and the Universal Declaration of Human Rights and the Product Restricted Substances List (PRSL);

During the activities related to the double materiality assessment, detailed in the disclosure in the paragraph "The Group's double materiality" of the General Disclosures chapter (ESRS 2), two opportunities were also identified that could arise from the long-term future implementation of ESG actions focused on climate change issues:

• The adoption of market best practices with respect to climate regulations may strengthen BasicNet's reputation, thereby attracting more investors, creating stronger partnerships with banks and other financial institutions, suppliers, customers and other stakeholders.

• Improving BasicNet's ESG profile may provide opportunities for new financing and better credit terms.

Finally, with regard to the impacts generated by the Group's activities and its value chain, the following current negative impacts were noted:

Contribution to climate change through direct and indirect energy GHG emissions related to activities at Group offices and sites
Generation of indirect climate-changing emissions produced in the value chain as a result of activities carried out
Reduced energy stock, due to energy use (predominantly from non-renewable sources) in operational activities (e.g. in the highly energy-intensive retail area)
Reduced energy stock, due to energy use during the extraction of raw materials, production processes and the treatment of fabrics with water or chemical solutions

The following sections will therefore detail the Group's energy consumption and emissions, as well as BasicNet's overall strategy in its approach to climate change.

[E1-1] - Transition plan for climate change mitigation

[E1-2] Policies related to climate change mitigation and adaptation

[E1-4] - Targets related to climate change mitigation and adaptation

Environmental protection is a key factor in the Group's competitiveness and sustainability, as the Group believes that the environment and nature are fundamental values and assets that belong to everybody which should be protected and defended. As also stated in the Ethics Code, this respect of the environment is primarily consolidated in dutiful and scrupulous compliance with environmental regulations. Secondly, the Group is committed to adopting responsible environmental-protection behaviours, avoiding harmful conduct and promoting the responsible management of the energy resources used. As provided under the Code of Conduct, the Sourcing Centres are also required and obliged - by signing Sourcing Agreements - to comply with all environmental laws and regulations, as well as maintaining procedures to notify the local Authorities in a timely manner of any environmental incidents arising from the work carried out by the Sourcing Centres.

Based on the above, BasicNet has not adopted a transition plan for the current year. Any decarbonisation initiatives that the Group decides to adopt in future years, to achieve the objectives defined in Article 4 of Legislative Decree No. 125/2024, will be appropriately included in a transition plan consistent with what has been approved by the governance bodies and with what will be defined in the Group's strategic plan.

ESRS 2 par. 62; 72] In addition, BasicNet currently has no specific policies in place to manage material impacts, risks and opportunities related to climate change mitigation, adaptation to it, or energy resource management, nor has it formalised targets to do so. The decision not to implement these policies and targets is due to the changing nature of the environment and business in which the Group operates and the need to progressively align with international standards and regulations. The Group adapts as it goes along to the current regulations and does not set additional targets, believing that alignment with the targets is sufficient.

[E1-3] Actions and resources in relation to climate change policies

Over the past few years, BasicNet has implemented a number of initiatives that seek to improve energy efficiency and reduce the environmental impact of its activities. These include the automated management of the lighting system at BasicVillage's offices and the implementation of software for managing the thermofluid system at the BasicVillage and BasicItalia's offices. The latter initiative permits the optimal management and regulation of summer and winter office temperatures according to the type of premises, thus allowing for a theoretical reduction in energy consumption. The implementation of both of these initiatives was completed before 2024 but they have continued to be used since, including during the reporting year.

In 2025, the replacement of neon lighting with LED lamps at the BasicItalia site (warehouse and offices) remained unchanged compared with 2024, stabilising at approximately 70% LED lighting, with an estimated reduction5 in emissions of 1.46 tCO2 /per year.

[E1-5] Energy consumption and mix

Regarding the energy resources used internally within the Group, all stores and locations, both in the Italian and foreign scope, buy electricity from the grid, while natural gas for space heating is used at the BasicVillage Turin and Milan locations (where the parent company BasicNet and BasicItalia are also located), at the KWAY France office and at some retail outlets. A further portion of energy consumption can be attributed to the use of fuels (petrol and diesel) by the Group's fleet of vehicles, which includes company cars and long-term rented vehicles. In 2023, a photovoltaic system was installed at BasicVillage's Milan headquarters. In 2025, as in 2024, the energy produced was fed into the grid at the disposal of other utilities against a semi-annual reimbursement by the operator of the amount sold. Only a residual and insignificant part was directly used by the BasicVillage building in Milan.

Table 9 - Energy consumption and mix (in MWh)

Energy consumption and mix (MWh)	2025	2024
Fuel consumption from coal and coal products	0	0
Fuel consumption from crude oil and petroleum products	1,843	1991
Fuel consumption from natural gas	2,825	2619
Fuel consumption from other fossil sources	0	0
Consumption of purchased or acquired electricity, heat, steam and cooling from fossil sources	4,584	4453
Total energy consumption from fossil sources	9,252	9,063
Total energy consumption from fossil sources		8,969
Share of fossil sources in total energy consumption (%)	93.06%	95.10%
Consumption from nuclear sources	598	467
Share of consumption from nuclear sources in total energy consumption (%)	6.02%	4.90%
Fuel consumption for renewable sources, including biomass (also comprising industrial and municipal waste of biologic origin, biogas, renewable hydrogen, etc.	82	0
Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources	0	0
Total renewable energy consumption	92	0
Share of renewable sources in total energy consumption (%)	0.92%	0%
Total energy consumption	9,941	9,530

⁵ To estimate the reduction in energy consumption, the average consumption of the previously used neon lamps was estimated (base year 2023), from which the actual average consumption of the current LED lamps was subtracted. Average use of 10 hours per day for 253 days per year was assumed, multiplied by the number and wattage of the lamps themselves, resulting in an estimated reduction in consumption of approximately 5 MWh/year.

⁶ Emissions were calculated using the location-based methodology and use the conversion factor proposed by AIB Supplier Mix. Whereas using the Market-based methodology (and the associated AIB Residual Mix conversion factor) resulted in emission reductions of 2.3 tCO2.

Table 10 Energy production

Energy production (MWh)	2025	2024
Non-renewable energy production	-	-
Renewable energy production	11	16

As defined by Commission Delegated Regulation (EU) 2022/1288, some of the BasicNet Group's activities are among the "high climate impact" sectors, particularly considering the sectors [42]:

G WHOLESALE AND RETAIL TRADE, which includes K-Way S.p.A, Kappa S.r.l, Sebago S.r.l, Superga S.r.l., K-Way Retail S.r.l., K-Way France S.a.s, K-Way Iberia S.L., K-Way Retail SUISSE S.A, K-Way Retail Ireland, Ltd, KappaRetail S.r.l., SebagoRetail S.r.l., SupergaRetail S.r.l., Kappa Retail Monaco S.a.r.l., Sport Fashion Retail S.a.r.l., Sebago Iberia S.L., Kappa Sport Iberia S.L., and Kappa France S.a.s.
H TRANSPORT AND STORAGE, to which BasicItalia S.r.l. and BasicAir S.r.l. belong
L REAL ESTATE ASSETS, to which only Basic Village S.p.A. belongs.

Energy intensity is therefore calculated by taking into account the energy consumption of the aforementioned high-impact sectors and the related revenues, and is therefore 0.023 MWh/Euro thousand. (0.022 MWh/Euro thousand in 2024).

To calculate energy intensity, the revenues used in the denominator include consolidated direct sales, royalties and sourcing commissions from high-impact companies only.

Table 11 – Revenue in thousands of Euro

Revenue in Euro thousands	2025	2024
Net revenue from activities in high climate impact sectors used to calculate energy intensity	398,167	394,892
Net revenue (other)	16,546	12,792
Total net revenue (total consolidated direct sales, royalties and sourcing commissions of the Group), as reported in the Explanatory Notes to the Financial Statements	414,713	407,684

[E1-6] Gross Scopes 1, 2, 3 and Total GHG emissions

In 2025, BasicNet incorporated the indirect emissions identified by the GHG Protocol along the value chain (Scope 3) in the calculation of direct and indirect emissions caused by the Group's activities (Scope 1 and 2). Among the 15 Scope 3 emission subcategories identified by the GHG Protocol, 10 of them were found to be material and applicable to the Group7, given the nature of BasicNet's business.

The significant methodologies and assumptions used to calculate and measure the Group's emissions are provided in Table 14 - Accounting Policies.

Scope 1 includes direct emissions from own operations and includes emissions generated by the company car fleet and diesel fuel used for heating in the BasicVillage, BasicItalia and KWAY France locations.

Scope 2 includes electricity consumption at all Group locations, including offices and stores.

The incorporation of the calculation of Scope 3 emissions showed that these account for 98% of the total emissions generated by BasicNet, whereas only 2% is accounted for by Scope 1 and 2 emissions8.

⁷ Following an updated materiality analysis, GHG Protocol category 3.5 Waste generated in operations was considered as not material and therefore excluded from the 2025 Statement.

⁸ Considering Scope 1 + Scope 2 location-based emissions

The emission intensity9 of the Group is:

Table 12 – GHG intensity compared to net revenues

GHG intensity per net revenue	unit	2025	2024
Total GHG emissions (location
based) per net revenue	tCO₂e/Eur	0.238	0.222
(tCO2eq/monetary unit)
Total GHG emissions (market
based) per net revenue	tCO₂e/Eur	0.2404	0.223
(tCO2eq/monetary unit)
Total net revenues ((total
consolidated direct sales, royalties
and sourcing commissions of the	Euro thousands	414,713	407,684
Group), as disclosed in the Notes to
the Financial Statements)

Table 103 - GHG emissions (in tCO2)

	2025	2024
Scope 1 GHG emissions
Gross Scope 1 GHG emissions (tCO2eq)	964	976
Percentage of Scope 1 GHG emissions from regulated emission trading schemes (%)
Scope 2 GHG emissions
Gross Scope 2 GHG emissions (location-based) (tCO2eq)	1,315	1,952
Gross Scope 2 GHG emissions (market-based) (tCO2eq)	2,068	2,272
Significant Scope 3 GHG Emissions
Total Gross Indirect GHG Emissions (Scope 3) (tCO2eq)	96,336	87,509
1 Purchased goods and services	80,413	73,921
2 Capital goods	1,954	2,410
3 Fuel and energy-related activities (not included in Scope 1 or Scope 2)	515	503
4 Upstream transportation and distribution	6,693	3,694
5 Waste generated during operations	n.d.	427
6 Business travelling	1,343	1,086
7 Employee commuting	2,139	1,613
12 End-of-life treatment of sold products	1,543	1,410
13 Downstream leased assets	193	347
14 Franchises	370	809
15 Investments	1,172	1,289
Total GHG emissions
Total GHG emissions (location-based) (tCO2eq)	98,614	90,437
Total GHG emissions (market-based) (tCO2eq)	99,368	90,757

⁹ Group emission intensity was calculated by taking total GHG emissions (considering both location-based Scope 2 and market-based Scope 2) as the numerator and total consolidated direct sales, royalties and sourcing fees of the Group as per the Notes to the Financial Statements as the denominator.

Table 14 - Accounting Policies

Category	Data description and methodology	Database Emission Factors
	Consumption data are primary data collected from offices and stores. The data for Basic Properties
	• America, Inc. are an exception. In this case, the energy consumption figure was estimated based on office square metres and an average MWh/m2 consumption was calculated based on the primary data present for the Italian scope;
	KWAY France, for which the energy consumption • figure was estimated from data taken from bills available until November, supplemented by a forecast for December;	AIB - Energy Mix (Residual Mix) for
Energy consumption	• BasicAir, for which consumption was calculated based on flight hours attributable to BasicNet and the kilograms of fuel attributable to BasicNet.	the European scope and Energy Institute - Statistical Review of World Energy (2025) for non-European scope
	The energy consumption of Kappa Retail Monaco and Kappa France has been estimated as described in the Scope 2 section of this table. BasicVillage Milan's consumption was allocated as consumption pertaining to Scope 2 and consumption pertaining to Scope 3 cat. 13 on the basis of m2 Consumption from nuclear sources was estimated based on the energy mix of the various countries in which BasicNet operates. The sources of the relevant percentages are AIB - Energy Mix (Residual Mix) for the European scope and Energy Institute - Statistical Review of World Energy (2024) for non-European scope.
Scope 1	Emissions from heating BasicItalia, BasicVillage, KWAY France and - where present - Retail sites and from fuel consumption for company vehicles (particularly of BasicVillage, BasicItalia, BasicNet and Foreign Retail), calculated from primary data collected from stores and offices. For BasicAir, consumption was calculated based on flight hours attributable to BasicNet and the kilograms of fuel attributable to BasicNet.	Emission factors obtained from the DESNZ 2025 database were used.
	Indirect emissions from purchased electricity consumption, calculated using both the location-based and market-based approaches from primary data collected from offices and stores. The data for Basic Properties
Scope 2	America, Inc. are an exception. In this case, the • energy consumption figure was estimated based on office square metres and an average MWh/m2 consumption was calculated based on the primary data present for the Italian scope; Kappa Retail Monaco, for which the energy • consumption figure was estimated from	The AIB 2025 (EU scope), EPA GHG Emission Factors Hub (US location based) and Terna 2024 (US market based and ASIA location-based and market-based) databases were used for the location-based and market based approaches.
	national average energy cost data Kappa France, for which the energy • consumption figure was estimated from data taken from bills available until November, supplemented by a forecast for December.

CAT 3.1 Purchased goods and services	Emissions from all purchased goods and services not otherwise included in the other Scope 3 Upstream Emissions Categories (Category 2 to Category 8). Products include both goods (tangible products) and services (intangible products). For the calculation of emissions from purchased goods and services, the data were extracted from internal databases with the amounts of the costs incurred. Expenses related to travel already reported in Category 6, expenses related to transportation already reported in Category 4, and expenses incurred for furniture and furnishings counted in Category 2 were not reported in this category. Expenditures that were not material and could not be attributed to a specific NACE code pertaining to goods or services were also excluded.	Eurostat's EEIO 2022 cost-associated factors were used for the spend-based approach.
CAT 3.2 Capital goods	Upstream (Cradle-to-Gate) emissions from the production of capital goods purchased or acquired by the organisation in the reporting year. Capital goods are associated with capital expenditures depreciated over the useful life of the asset, for example: machinery, plant, buildings and vehicles. For the quantification of Scope 3 Category 2 emissions, the spend-based approach was adopted, multiplying the costs incurred by the organisation in purchasing capital goods in 2025 by specific emission factors.	Eurostat's EEIO 2022 cost-associated factors were used for the spend-based approach.
CAT 3.3 Fuel and energy-related activities	Emissions from the extraction, production, and transportation of fuels and energy purchased or acquired by the organisation in the reporting year, not already accounted for in Scope 1 or Scope 2, including upstream emissions of purchased fuels and electricity and transmission and distribution losses. The Group's consolidated energy consumption data were used for the quantification of Scope 3 Category 3 emissions.	The 2025 UK Government GHG Conversion Factors for Company Reporting (DEFRA & BEIS) emission factors and the Well-To-Tank (WTT) conversion factors were used.
CAT 3.4 Upstream transportation and distribution	Emissions from the transportation and distribution of purchased products, between a company's first-tier suppliers and its own operations, using vehicles not owned or operated by the reporting company. For the calculation of emissions from the transportation and distribution of goods purchased using vehicles not owned and not under BasicNet's control, data sources are extractions from internal management databases in which the weights of the goods purchased or sold and their origin and destination are recorded. Outbound transportation paid for by BasicNet is also reported in this category. Kilometres were estimated, using an external data source and based on each route and its transportation method. This took place by: lorry, plane, train and ship. For returns, the weight and number of items was used to estimate the average weight of a item returned to BasicNet (equal to 500 g).	The 2025 UK Government GHG Conversion Factors for Company Reporting (DEFRA & BEIS) emission factors were used.

CAT 3.6 Business travel	Emissions from transporting employees for company business in vehicles owned or operated by third parties, such as aeroplanes, trains, buses and passenger cars. For calculating emissions from employee travel for company activities in vehicles not owned or controlled by BasicNet, the data sources were company travel databases provided by the travel agency and expense reimbursements. Emissions from accommodation in hotels were also included in the calculation. The total number of nights entered are the result of the total sum of nights of accommodation for several people, even in hotels of different chains, but in the same city.	Eurostat EEIO 2022 cost-associated factors and 2025 UK Government GHG Conversion Factors for Company Reporting (DEFRA & BEIS) emission factors were used for the spend-based approach.
CAT 3.7 Employee commuting	Emissions from the transportation of employees between their homes and workplaces. For the calculation of emissions from the transportation of employees from their homes to their workplace, the source of the data is a survey filled out anonymously by Home-Work Commute Plan employees, in which information is reported regarding the number of times the employee commutes to work during the week, the distance travelled round trip, the vehicle used for that commute, with subsequent specification on the type of transport if public transport is indicated. For employees for whom the required information was not available, an estimate was made based on the number of employees multiplied by an average reference factor.	The 2025 UK Government GHG Conversion Factors for Company Reporting (DEFRA & BEIS) emission factors and the GHG Protocol factor were used.
CAT 3.8	The category is not applicable because BasicNet does not
Upstream leased assets	own any leased assets not already included in Scope 1 and 2.	-
CAT 3.9 Downstream transportation	The category is not applicable because transportation of goods sold is the responsibility of BasicNet and therefore included in Cat. 4.	-
CAT 3.10 Processing of sold products	The category is not applicable because BasicNet does not sell intermediate products that require processing.	-
CAT 3.11 Use of sold products	This category was excluded because the goods sold by BasicNet generate indirect emissions from the use phase (i.e. energy consumption associated with washing and drying). Quantification of these emissions is optional under the GHG Protocol.	-
CAT 3.12 End-of-life treatment of sold products	Considering that the products marketed by the Group are "durable goods" (i.e. mainly garments), it is assumed that such products are not disposed of in the short term by the end-user, supporting the assumption that they can be excluded, considering that BasicNet Group has no direct responsibility for such emissions, including temporal responsibility. As a result, only emissions from the disposal of materials used for the packaging of finished products and sold on the market (packaging) in the reporting year are considered in this emission category. For the calculation of emissions associated with the disposal methods of the packaging of products sold by BasicNet, data sources include extractions from management system databases.	Eurostat's EEIO 2022 cost-associated factors were used for the spend-based approach.

	For this first report related to Scope 3, Category 12 was calculated using spend-based data in order to be able to understand the impact of the category in terms of emissions compared to the other categories in scope. Future refinements will be made in order to use physical and not spend-based data. Emissions from the operation of assets owned by the
CAT 3.13 Downstream leased assets	reporting company (acting as lessor) and leased to other entities in the reporting year (not already included in Scope 1 and 2). To calculate emissions from assets owned by BasicNet and used by third parties, the use of company-owned aircraft by third parties was taken into account.	The 2025 UK Government GHG Conversion Factors for Company Reporting (DEFRA & BEIS) were used.
CAT 3.14 Franchises	Emissions from the operation of franchises not included in Scope 1 or Scope 2. Scope 3 Category 14 emissions were estimated by multiplying the square metre areas of franchised outlets, broken down by geography (Italy, Spain and France), by an indicator derived from the ratio of Scope 2 emissions to the square metres of the corresponding outlets in that same geographical area, expressed in tonnes of CO2eq per square metre. As there are no stores owned in Belgium and Luxembourg, the same indicator used for the France geography was applied to the franchises in these two areas.	Tonnes of CO2eq related to 1 m2 of a store derived from Scope 2 calculation.
CAT 3.15 Investments	Emissions associated with the reporting company's investments in the reporting year, not already included in Scope 1 or 2. This Category is applicable to investors (companies that make an investment with the aim of making a profit) and companies that provide financial services. To estimate Scope 3 Category 15 emissions, the revenues of Joint Venture Fashion S.r.l. were multiplied by BasicNet's 50% shareholding and the appropriate emission factor, representative of the relevant economic sector.	Eurostat EEIO 202 cost-associated factors were used for the average data methods approach.

ESRS E3 - Water and marine resources

[ESRS 2 IRO-1] - Description of the processes to identify and assess material water and marine resources-related impacts, risks and opportunities

The process to identify material impacts, risks and opportunities related to water and marine resources was carried out using the Group's double materiality assessment approach. This process enabled the analysis of both actual and potential impacts, risks, and opportunities in BasicNet's own operations and along its upstream and downstream value chain.

Given the non-manufacturing nature of BasicNet's business, water consumption and management are primarily attributable to supply chain activities rather than internal processes. In line with the changes introduced by the "quick fix" Delegated Regulation, the information presented in this section is qualitative in nature.

The analysis was conducted internally, prioritising management's perspective, with a comprehensive view of the Group's activities and its value chain, without conducting consultations with local communities.

The double materiality assessment identified one actual material negative impact relating to BasicNet's upstream activities:

High levels of water withdrawal and consumption in textile processes require significant quantities of water and contribute to water use, with impacts on the environment and local communities.

[E3-1] - Policies related to water and marine resources

[E3-2] Actions and resources related to water and marine resources

[E3-3] - Targets related to water and marine resources

BasicNet has not adopted specific policies to manage material impacts related to water and marine resources along its value chain, neither with regard to areas at water risk nor to areas of high water stress. This decision, which is in line with the Group's approach to the climate change topic, is equally motivated by the dynamic nature of BasicNet's business and the need to quickly align with the relevant regulatory environment.

In addition, for the same reasons, BasicNet has not defined Group-level targets or actions in this regard along its value chain. Nevertheless, the Group is actively committed to developing products designed to reduce water consumption and withdrawal and to prevent waste, in full compliance with applicable regulations.

Against this backdrop, Sebago is committed to promoting and strengthening collaboration with LWG (Leather Working Group)-certified tanneries to produce natural leather goods, promoting more sustainable and responsible management of water resources and chemicals throughout the production chain. This collaboration seeks to encourage the adoption of innovative practices and high environmental sustainability standards, paying particular attention to reducing water consumption, improving wastewater treatment and protecting local ecosystems, thereby contributing to a more responsible and informed use of this critical resource.

[E3-4] - Water consumption

BasicNet does not directly manage the manufacture of its products, but relies on Sourcing Centres, which are responsible for the procurement and use of material resources, plants and machinery needed for production operations. As a result, BasicNet does not have direct data on the volumes of water consumed, recycled or stored, but monitors and assesses water-related impacts qualitatively along its supply chain, recognising that the production processes of suppliers operating in the textile sector are some of the most water-intensive globally (UNEP, World Bank, 2023–2025). Water is a critical resource both in the cultivation of natural fibres, specifically cotton, and in subsequent industrial stages such as dyeing, washing and finishing. Broadly speaking, the fashion industry consumes approximately 1.5 trillion litres of water each year and is responsible for around 20% of global freshwater pollution due to fabric dyeing and treatment using toxic chemicals, in addition to the use of pesticides in raw material cultivation10.

¹⁰ Fast fashion: EU laws for sustainable textile consumption. Last updated: 12-09-2025. Link: What if fashion were good for the planet?

In addition, only around 15% of the water used to produce textiles is consumed in Europe, while approximately 85% of the water consumption associated with textiles consumed in Europe occurs outside the continent, primarily in Asia, where fibre production and textile manufacturing are concentrated11. The geographical regions in which some of the Group's production facilities are located (e.g. South and East Asia) fall within river basins marked by high water stress, according to the latest assessments by the Water Footprint Network and the European Environment Agency (EEA, 2024). However, in 2025, the Group's main suppliers were analysed using the Aqueduct tool, a globally recognised instrument developed by the World Resources Institute (WRI) for mapping and assessing water risks at a regional level, taking into account variables such as water availability, quality and demand. The analysis showed that the geographical distribution of BasicNet suppliers is associated with varying levels of water risk, generally corresponding to medium-high and high-risk areas.

As established in the Code of Conduct, Sourcing Centres are required to comply with all applicable environmental protection laws and regulations and to maintain procedures for the timely notification of competent authorities in the event of environmental incidents arising from their activities. This commitment reflects BasicNet's intention to promote the responsible management of natural resources and to contribute to the protection of local ecosystems in the regions where its supply chain operates.

ESRS E5 - Resource use and circular economy

[ESRS 2 IRO-1] - Description of the processes to identify and assess material resource use and circular economy-related impacts, risks and opportunities

The process to identify impacts, risks and opportunities related to resource use and the circular economy was conducted through the Group's Double Materiality Assessment. This process enabled the analysis of both actual and potential impacts, risks, and opportunities in BasicNet's own operations and along its upstream and downstream value chain.

To identify these issues, analyses were carried out that included environmental impact assessments and a review of resource inputs, outputs, and waste streams. Given the non-manufacturing nature of BasicNet's business, it was chosen to conduct these analyses internally, prioritising the management's point of view with a comprehensive view of the Group's activities and its value chain, while no consultations were conducted with local communities. The double materiality assessment revealed three material negative impacts, with reference to BasicNet's upstream value chain:

Two actual impacts, assessed as material in the short term:
o The processing and intensive use of natural resources (such as cotton) and non-natural resources (synthetic fibres) to produce clothing and footwear contribute to their depletion and generate a negative environmental impact;
o Improper management of waste and scrap (both hazardous and non-hazardous) during production processes, in addition to unsold and non-recyclable materials at the sales stage, generates significant negative environmental impacts;
One potential impact, assessed as material in the medium term:
o Potential negative impact arising from resource outflows associated with production processes, linked to the inefficient use of recycled or recyclable materials, which could contribute to the increased consumption of natural resources. In addition, the use of unnecessary and nonbiodegradable packaging contributes to the consumption of resources.

¹¹ European Environment Agency: "Water use for EU's textiles consumption". Published 19 Mar 2025 and modified 26 Mar 2025. Link: Water use for EU's textiles consumption | Textiles | Circularity Metrics Lab (EEA).

[E5-1] Policies related to resource use and circular economy.

[E5-3] Targets related to resource use and circular economy

BasicNet does not have specific policies in place to manage the material impacts related to resource use and the circular economy, nor with regard to the phasing out of virgin resources or the sustainable sourcing of renewable resources, nor has it set formal targets to address impacts in these areas. This decision, which is in line with the Group's approach to the topics of climate change and marine resources, is equally motivated by the dynamic nature of BasicNet's business and the need to quickly align with the relevant regulatory environment.

Furthermore, for the same reasons, BasicNet has not defined specific objectives in this context; nevertheless, it is actively engaged through its brands in the adoption of sustainability-oriented solutions, promoting the use of more sustainable, recycled and recyclable materials, and applying the principles of circular economy in concrete terms, with the aim of reducing its environmental impact and encouraging the responsible use of resources.

[E5-2] Actions and resources related to resource use and circular economy

BasicNet has introduced a series of initiatives seeking to optimise resource use and promote a circular economy model, reducing environmental impact throughout its value chain. The resources allocated to these initiatives were not material in terms of the Group's total CapEx and OpEx. Actions taken include:

Tags and Polybag: The Group has adopted more responsible materials for packaging, making all of the Group's brand name tags exclusively of FSC-certified paper, and introducing polybags made of 100% recycled and recyclable material. In addition, K-Way has developed a zip closure system to make its plastic bags reusable, thus reducing the use of single-use packaging. The initiative involves all of the Group's brands, with a particular focus on the K-Way brand, and covers the Group's entire production chain, both in the upstream value chain, with the selection of certified materials, and in the downstream value chain, offering consumers more responsible solutions. BasicNet will continue to explore innovative solutions to further improve the use of sustainable materials in its processes.
QR code labelling: The Group has strengthened its commitment to the responsible end-of-life management of its products by adding a dedicated QR code to all labels and packaging, providing clear and up-to-date information for the proper disposal of materials. This initiative, rolled out across all brands and the entire production process, enables consumers to quickly and easily access information on packaging composition and disposal methods, in line with applicable regulations in the various markets in which the Group operates.
Use of recycled materials in K-Way collections: K-Way has continued to expand the use of recycled materials in its collections, introducing sustainable fabrics and padding in the Heavy Warm, Marmot Twill, Marmot Soft Touch, and the SKI collection with recycled Primaloft padding. The initiative aims to offer more responsible collections, reducing environmental impact through the use of recycled materials, while also contributing to the evolution of the brand's sustainability strategy. In addition, the brand uses recycled nylon fabrics in its Quilted Warm, Stretch Dot and Stretch Thermo Double packages. The initiative covers the upstream value chain, through partnerships with suppliers specialising in the production of recycled materials, and involves the brand's global collections. BasicNet will continue to develop new solutions to further expand the use of low-impact materials.
Partnership between K-Way and Coral Gardeners: K-Way has continued its collaboration with Coral Gardeners, developing a collection of technical protective clothing made from recycled materials, thus reducing the consumption of virgin raw materials and minimising environmental impact. The project supports the regeneration of coral reefs, contributing to the protection of marine biodiversity. The initiative involves the upstream and downstream value chain, from the selection and production of sustainable materials to the distribution of products. The main stakeholders involved are Coral Gardeners, K-WAY customers, scientific and environmental communities, and supply chain partners. The project is mainly active in French Polynesia, where the environmental restoration activities take place, but has a global impact through the distribution of the collection. The partnership will run for three years, from 2024 to 2026, and involves an outlay (OpEx) of Euro 73,931.

• Sebago resoling service: Sebago has strengthened the initiative to extend the life of its footwear, in collaboration with Alvisi Milano, appointed as the brand's official shoemaker. The service allows customers to resole their shoes with original Sebago soles, helping to reduce waste and optimise the use of resources. The initiative covers the downstream stage of the value chain, directly involving consumers and promoting a culture of repair and reuse, also involving specialised repair partners, and promoting partnerships with qualified craftsmen. The project is currently active in Italy and could be expanded to other markets.

Briko UpCycling Programme: In 2025, Briko launched the Briko UpCycling Programme, promoting a circular model for the end-of-life management of bike helmets. The initiative involves the collection of used helmets at participating retail locations, with customers receiving a contribution towards the purchase of a new Briko helmet, thereby encouraging responsible consumption. Collected products are placed in dedicated UpCycling boxes and subsequently sent for recycling through a partnership with Esosport / ESO Recycling, which handle their transformation into secondary raw materials. These recovered materials are then reintroduced into the production cycle to create new materials and products, contributing to waste reduction and the enhancement of resources along the entire value chain.
More sustainable packaging: all Group brands have stopped using traditional glossy plastic films on boxes, replacing them with direct printing on cardboard and thereby reducing the use of non-recyclable materials. This initiative affects the value chain upstream, involving suppliers of cardboard materials, and downstream, offering consumers a more sustainable packaging solution.

[E5-4] Resource inflows

BasicNet does not directly manage the manufacture of its products, but relies on Sourcing Centres, which are responsible for the procurement and use of material resources, plants and machinery needed for production operations. In 2025, BasicNet continued to work to integrate sustainability into its operations, focusing on continuous improvement of the production chain and designing more sustainable collections. The Group's research and development activities include product creation, concept, and design based on market needs and specific customer performance requirements for apparel, with a focus on finding environmentally friendly materials and reducing environmental impact in manufacturing. The Group offers a wide range of products including apparel, footwear, and sports equipment, including technical items such as helmets and eyewear. To ensure the quality and performance of its products, the Sourcing Centres use several key materials in their production cycles, including:

Clothing: a combination of natural textile fibres, such as cotton and linen, and synthetic fibres, including polyester, spandex, and nylon that ensure comfort, breathability, and fit;
Footwear: high-quality materials such as leather, rubber, and advanced polymers such as TPU (thermoplastic polyurethane) and EVA (ethylene vinyl acetate) designed for durability and optimal performance;
Sports equipment: a selection of technical materials, including polycarbonate and fiberglass for helmets, and lenses made of various materials for eyewear, designed to offer durability and protection;
Packaging: sustainable packaging, including recycled cardboard boxes, paper shopping bags and plastic bags, to reduce environmental impact and promote ecological responsibility.

[E5-5] Resource outflows

The goal is to constantly improve the production process and the related supply chain. The Group strongly believes that minimising social and environmental impact is the correct path to take and the ultimate goal is to continue to grow sustainably by offering attractive products in this regard. As previously noted, the Group has always paid the utmost attention to LEP (Labelling, External decoration, Packaging), which is considered a distinctive element of the product. BasicNet continued to assess the possibility of using pre-recycled/recyclable materials for pendants and boxes at its main sourcing centres, in line with the relative certifications.

As far as the approach on the single product is concerned, BasicNet has always focused on offering the best possible product to the Licensee Network, always prioritising the research of products with a targeted and certified content, in full compliance with the regulations in force.

Having no production activities in-house, BasicNet's own activities generate waste attributable to typical office operations, in an amount considered non-material compared to waste generated by upstream production activities, by the Sourcing Centres. Recognising the importance of the topic, a more in-depth analysis of this issue will be implemented over the next three years (in alignment with the provisions of the "quick fix" Delegated Regulation), so as to provide precise reporting accompanied by quantitative data. In terms of quality, the waste generated by the Sourcing Centres mainly includes:

Material Waste: such as scraps of fabric, leather, rubber and other materials that can be used for garment and footwear packaging;
Chemical Waste: such as residues of dyes and finishes, as well as substances used for cleaning equipment and machinery (solvents and detergents);
Packaging Waste: such as cardboard boxes, plastics and polystyrene.

SOCIAL INFORMATION (ESRS S)

ESRS S1 - Own workforce

STRATEGY FOR MANAGING OWN WORKFORCE [ESRS S1]

[ESRS S1 - SBM3 – S1] Material impacts, risks and opportunities and their interaction with strategy and business model

During the double materiality assessment, the impacts generated by BasicNet vis-à-vis its own workforce, and the financial risks and opportunities related to the topic were assessed. In particular, the following were identified as material:

three positive actual impacts, assessed as material in the short term:
Increased overall level of employee well-being and work-life balance satisfaction due to the implementation of specific welfare and well-being programs (e.g. parenting support and services for care givers);
Improving workers' skills through training and professional development activities, general and technical programs, including those linked to growth targets and personal appraisals (e.g. career development plans);
Creation of an inclusive work environment that actively promotes social justice and contributes to the reduction of gender inequality in and beyond the corporate scope, improving people's well-being;
two negative impacts, assessed as material in the short and medium term:
Perpetuation of wage disparities between men and women through the adoption of unequal and discriminatory pay policies, which may lead to dissatisfaction, reduced motivation and loss of qualified female talent - connected to the systemic environment in which the company operates;
Worker injuries or ill health occurring as a result of inadequate maintenance and management of Group assets and work spaces that may expose employees to significant health (i.e. workplace accidents) and safety risks in the course of their activities.

As for financial risks and opportunities, the following have been identified [16]:

one opportunity, arising from dependence on impacts and potentially affecting the entire workforce:
Ensuring a competitive benefits package may significantly reduce employee turnover. By offering attractive benefits, the company may retain qualified employees, reducing the costs associated with hiring, training and onboarding new staff. Lower turnover rates also mean fewer business interruptions and business process continuity;
two risks, both material in the long term and potentially affecting the entire workforce:
Failure to comply with employee agreements and expectations may damage the company's reputation among current and potential employees, customers, and other stakeholders. Negative publicity and loss of trust may lead to decreased customer loyalty, reduced sales, and difficulties in attracting and retaining top talent;
Risk that staff are not adequately trained, or that training may be ineffective because it is delivered without regard to the age and/or educational level of staff. Risk related to the non-existence or discontinuity of investment in staff training, resulting in the inability to learn new skills or improve acquired skills.

In 2025, the BasicNet Group had a workforce of 1,771, approximately 98% of which were employees and 2% nonemployees. The Group employs 1,728 workers, and they are concentrated in the retail area in view of its seasonality and because many sales outlets are still start-ups. Non-employee workers amounted to 44, including 16 temporary workers - working mainly in the logistics and retail areas - and 27 interns.

In addition, considering the nature of the business, the location of its offices, and the activities performed, no material risks of forced or compulsory labour were found. Similarly, as part of the process of analysing material risks related to its workforce, the functions involved did not highlight any risks related to child labour.

In both categories of own workers considered, there are no groups with specific characteristics that are more exposed to the potential negative impacts identified by BasicNet.

MANAGEMENT OF IMPACTS, RISKS AND OPPORTUNITIES REGARDING GROUP PEOPLE

[S1-1] Policies related to own workforce

BasicNet has implemented a set of policies designed to protect the rights and well-being of its workforce by promoting a safe, inclusive work environment that complies with the Group's ethical principles. These policies set clear standards for working conditions, integrity and respect for fundamental rights, contributing to the responsible management of employee-related impacts, risks and opportunities. The main policies adopted include, in addition to the Ethics Code, the Procedure for Reporting Misconduct and Irregularities (whistleblowing) and the Remuneration Policy, each with a specific role in ensuring high standards of governance and social responsibility.

• Ethics Code

BasicNet's Ethics Code brings together the principles and values that guide the activities of the Group and its subsidiaries. The primary goal is to create value for shareholders and stakeholders, including employees, contractors, suppliers and the community. The Code emphasises the central role of human resources and reflects BasicNet's commitment to ensuring health and safety in the workplace, respect for workers' rights, equal opportunities and professional growth.

The Ethics Code applies to members of the Boards of Directors and Boards of Statutory Auditors, all Group Human Resources, external contractors and consultants, suppliers, and any person acting in the name of or on behalf of the BasicNet Group. Supervision of compliance with the Code is entrusted to the Supervisory Board, established pursuant to Legislative Decree No. 231/2011, which reports any violations to the Control and Risks Committee and the Board of Directors.

To ensure maximum transparency and accessibility, the Ethics Code is publicly available on the company website www.BasicNet.com. In addition, the Human Resources Department ensures that all employees are informed of the contents of the Code.

• Procedure for reporting offences & irregularities (Whistleblowing)

The Procedure for Reporting Misconduct and Irregularities (whistleblowing) regulates the process of receiving, analysing and handling reports, which can be forwarded to the Supervisory Board or, in its absence, to the body in charge of their management.

The procedure guarantees the confidentiality of the personal data of the reporter and the alleged perpetrator, protects the reporter from retaliation, and ensures an independent and autonomous channel for sending reports. It applies to all human resources, external contractors and consultants, suppliers of goods and services, partners and members of the Group's corporate bodies, without restriction.

Reports are handled by the Group Internal Audit department, which is empowered to request documentation and conduct audits to ensure the effectiveness of the process. The procedure is publicly accessible on the company website.

• Remuneration Policy

BasicNet's Remuneration Policy is designed to ensure an appropriate remuneration system to attract, retain and motivate Executive Directors and Senior Executives with the skills necessary for the effective management of the Company and the Group. The policy is structured to align HR interests with the overriding goal of value creation for all stakeholders in the medium to long term.

The Policy applies to members of the Boards of Directors, Senior Executives, and the Company's Supervisory Board. Implementation of the policy is the responsibility of the Board of Directors, which, among other functions, defines and implements share-based remuneration plans or financial instruments approved by the Shareholders' Meeting.

To ensure maximum transparency, the Remuneration Policy is published on the company website, making it accessible to all stakeholders.

As expressed in its Ethics Code, BasicNet recognises as central and is committed to promoting and respecting the rights of all workers. [Par. 20 b] In order to ensure compliance with current policies and listening to the needs of the workforce, the Group maintains an ongoing dialogue with trade union representatives, business associations and social security institutions, ensuring transparent and constructive discussion. In addition, the Group Human Resources function plays a key role in maintaining a channel of communication that is always open with employees, serving as a point of contact from hiring to termination. [Par. 20 c] Any violations of the principles established in the Ethics Code may amount to breach of contract, resulting in disciplinary measures proportionate to the seriousness of the offence.

The Group safeguards health and safety at places of work, in compliance with applicable regulations and standards, developing an awareness of risks, promoting responsible conduct amongst all employees and acts to protect, particularly by preventative actions, employee health and safety. The Group's activities must be carried out in full compliance with health and safety prevention and protection legislation, whilst constantly seeking to improve health and safety conditions in the workplace. Occupational health and safety (OSH) is also monitored directly by the ".com" BasicGuys, which tracks all accidents and injuries that occur in the company. The information gathered is analysed on an annual basis and the results are discussed during regular meetings pursuant to Article 35 of Legislative Decree No. 81/2008.

BasicNet has not yet adopted specific policies on human rights, human trafficking, forced labour and child labour regarding its own workforce. As shown by the materiality analysis, the types of operations and sites at which BasicNet Group companies operate do not present material risks in this regard. These issues are governed by the Code of Conduct, as described in paragraph [S2-1] Policies related to value chain workers with regard to workers along the value chain, who are potentially more affected by material human rights impacts.

Similarly, the topics of discrimination and harassment are not addressed by specific policies dedicated to the workforce. However, the Group also demonstrates its values with respect to diversity and equal opportunity issues through its treatment of the topic always within its Ethics Code. In this way, BasicNet fosters greater awareness and accountability along the value chain and ensures that the principles of inclusion and diversity are incorporated into its operational processes and business relationships, demonstrating an implicit - if not formalised - attention to the issue, especially with regard to its employees.

In conclusion, the company recognises the importance of the United Nations Guiding Principles on Business and Human Rights, but its policies related to its own workforce are not fully aligned with these international instruments. Although there is an awareness of global best practices and a commitment to improving worker conditions, the measures currently implemented require further development to ensure full compliance.

[S1-2] Processes for engaging with own workers and workers' representatives about impacts

With respect to the positive impacts identified by the materiality analysis, employees are involved in various ways, such as through training programs, regular performance reviews, onboarding and related follow-up activities. This is complemented by the informal engagement channel represented by the functions pertaining to Human Resources, the first listening channel for issues raised by employees.

In contrast, a more structured approach is followed regarding the potential negative impact of work-related injuries. In order to facilitate employee participation and their consultation in the development, implementation and evaluation of a occupational health and safety management system, meetings are held annually (pursuant to Article 35 of Decree 81) between company representatives and employee health and safety representatives (EHSR) on the topic to health and safety to identify and share information on sensitive situations and any corrective measures required. Each meeting is duly formalised by the ".com" BasicFacility and BasicGuys of the Group and the related reports are shared with relevant parties. The following participate in the meetings:

The DDL (Employer) for each Group company;
the Health and Safety Manager (external consultant);
the Health and Safety Officers, belonging to the external consulting company;
the Company Doctor;
employee health and safety representatives (EHSR) for each company;
the Human Resources office.

In addition, for the specific area of work-related stress, a biannual ad-hoc assessment is conducted, involving the Employer, Health and Safety Manager, company doctor, Managers, Employee Health and Safety Representatives (EHSR), and Trade Union Representative Bodies (RSA). This assessment is conducted through the completion of a checklist aimed at identifying any critical issues related to work organisation and the environmental and relational context, with the goal of identifying potential stressors for workers. Upon completion of the analysis, the Group implements corrective actions and initiates monitoring of areas that require special attention.

[S1-3] Processes to remediate negative impacts and channels for own workers to raise concerns

BasicNet gives employees and all those working on behalf of the Group the opportunity to report any concerns or complaints regarding harassment, alleged illegal conduct or other issues, either directly to their supervisor or through the whistleblowing mechanism. This tool defines the rules and means of communication for reporting, while ensuring confidentiality, any violation, well-founded suspicion of violation, or behaviour that is not in line with the Ethics Code, internal policies and procedures, including the 231 Model, and applicable laws and regulations.

The dedicated reporting system is the "Legality Whistleblowing" portal, which can be accessed from the company's website. The system allows alerts to be sent in written or oral form, with the option of recording an audio message with voice distortion to ensure the highest level of confidentiality. Alternatively, reports can be sent by the standard postal service to the Group's registered office or presented orally through a face-to-face meeting with the receiving party. The Group ensures that workers are aware of the existence of Whistleblowing reporting channels and procedures through the publication of the relevant policy on the company website and intranet, and informing new hires during onboarding.

BasicNet ensures the protection of the identity of the reporter and the confidentiality of the information received, in accordance with applicable regulations, applying the "by design" principle of data minimisation, ensuring that, where possible, the identity of the reporter is not searched for or investigated. The reporter's identity may not be disclosed, without his or her explicit consent, to persons other than the person receiving the report; The reporter's identity may not be disclosed during disciplinary proceedings if the allegation of the charge is based on elements separate from and additional to the report, even if derived from it. In cases where the report is an integral part of the disciplinary complaint and knowledge of the identity of the reporter is essential for the defence of the accused, the latter may be disclosed only with the written consent of the reporter. If consent is not given, the report will be filed for the period stipulated in the regulations, after which the relevant data will be deleted. In addition, anyone suffering retaliation as a result of the report may report it to the person responsible for handling reports.

The whistleblowing channel is public and open to all, including those internal and external to the company, while there are no additional formalised channels dedicated only to the workforce to raise critical issues and concerns anonymously.

To ensure the effectiveness of the reporting system, BasicNet has established a process for managing and monitoring the reports received. The receiving party issues an acknowledgement of receipt to the reporter and initiates a preliminary verification phase to assess the merits of the report and decide whether to proceed with further investigation. In the event of a decision not to proceed, the report is filed and the reasons for this decision are recorded. Assessment activities are entrusted to the Group's Internal Audit function, which performs them with priority over routine activities and may request documents or carry out checks at its own discretion. Reports are monitored through a follow-up process, which involves providing feedback to the reporter within three months of receiving the report and regular updates on the status of the investigation and action taken. Upon completion of the investigation, the reporter receives a final report, in accordance with Legislative Decree No. 24/2023.

ACTIONS, METRICS AND TARGETS

[S1-4] Taking action on material impacts and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions and approaches

Impacts

BasicNet ensures that its employees operate in an ethical work environment focused on inclusiveness, fairness, and protection of human rights through the presence and communication of the Group's Ethics Code, which ensures that all activities are carried out in accordance with the law, within a framework of fair competition, and with mutual respect. The company is committed to ensuring that its business practices do not cause or contribute to material negative impacts on the workforce by taking an integrated and responsible approach in all its operations and directly involving and consulting employees and their representatives.

As described in paragraph [ESRS S1- SBM 3] Material impacts, risks and opportunities and their interaction with strategy and business model in this section, the materiality assessment identified "Work-related injuries" as an actual negative impact affecting the Group's own workforce, under the health and safety topic.

In order to improve the management of this issue and thus reduce the potential for occurrence of the impact itself, this is entrusted to BasicFacility, which coordinates activities with the support of an external consultant (Group Torinoprogetti S.r.l.). Each year, BasicFacility prepares a budget dedicated to safety, ensuring adequate resources for improving working conditions.

To ensure constant monitoring, all company injuries and accidents are recorded, analysed and discussed at the regular meeting pursuant to Article 35 of Legislative Decree No. 81/2008, with the aim of identifying actions to improve and further strengthen the prevention measures.

In relation to SSL training, the ".com" BasicEducation is responsible for planning, organising and reporting the training activities of employees at the Group's Italian sites (internal resources and personnel in owned and nonowned stores). The health and safety training programmes are drawn up by the BasicNet Group's Workplace Health and Safety Coordinator in conjunction with the Gruppo Torino Progetti S.r.l. and include:

the planning and the delivery of courses on general workplace health and safety for official use (e-learning and face-to-face);
appropriate training courses related to the specific risks to which employees are exposed depending on their related roles, as well as on the correct use of Individual Protection Equipment (PPE).

At the end of every course, all participants are registered and where required an assessment test is carried out. Each worker has the option to access the BasicEducation app, and can see their own "training licence" with details of the courses taken/to be taken. All the training courses delivered by BasicEducation are based on both legislative and individual requirements in addition to the Company's professional requirements (e.g. Legislative Decree No. 81/2008).

The activity related to OSH training is ongoing and is implemented to address emerging needs and feedback received; in 2025 BasicNet made an outlay (OpEx) of Euro 17,488 for this action.

Opportunity

The BasicNet Group is constantly striving to enhance the well-being and development of its workforce by implementing targeted actions that include welfare initiatives, employer branding and flexibility policies. Its aim is to improve the quality of the work environment and foster work-life balance, thus generating the positive impacts identified in the materiality analysis, while pursuing the opportunity detected regarding the topic of Employee Benefits. The key activities carried out include:

Talent Acquisition and Employer Branding - The Talent Acquisition team plays a strategic role in fostering efficient management of recruitment processes and attracting top talent. Through employer branding initiatives, the Group reinforces its positioning as an attractive employer, promoting the professional opportunities offered within the organisation and also promoting the employment of resources belonging to protected categories, in line with the principles of inclusion and valuing diversity.

Organisational well-being and work-life balance - Since 2004, the Group has implemented various measures to promote employee well-being and reconcile work and family commitments. Some of the most important initiatives are:

Hour bank, which allows flexible management of overtime;
Reversible part-time, available for female workers with young children;
BasicCare, a service that allows employees to delegate payments and small errands to a company employee;
BasicGym, a corporate gym that organises exercise classes for staff;
Sports voucher, which provides access to the TrainUp platform for courses with affiliated trainers, with a Group outlay (OpEx) of Euro 504.637;
Subsidised parking, including free parking at the BasicVillage and, from 2024, the new "pink parking spaces" reserved for pregnant workers;
Psychological Listening Desk, a qualified support service for staff dealing with traumatic events or personal difficulties, guaranteeing maximum confidentiality in compliance with privacy regulations, with a Group outlay (OpEx) of Euro 711.66;
Corporate portal for deals and promotions, offering discounts on goods and services, including agreements with vehicle sharing companies to encourage sustainable mobility.
Supplementary Accident Policy To complement the welfare initiatives already described, with an outlay (OpEx) of Euro 272,567, BasicNet has taken out an non-work-related accident policy that protects its employees outside the work environment, providing coverage in the event of accidents occurring in their private life.

In addition, to ensure fair and transparent career management, BasicNet has implemented an automated performance appraisal system, with biannual position reviews for foreign companies, and more flexible reviews for companies within the Italian perimeter. Finally, to encourage flexible working, access to smart working was confirmed for staff with compatible duties, with arrangements agreed individually with their supervisor.

Risks

In the course of the activities that led to the identification of material IROs, two financial risks to which the Group might be exposed in relation to its workforce emerged as material.

1. Violation of workers' rights

To mitigate this risk the Group adopts a structured and integrated approach to managing its human resources through the BasicGuys platform. This platform is responsible for the administration, listening, and personnel management activities for all Group companies, with the aim of streamlining performance and meeting the needs of its employees. In this regard, BasicNet plans and ensures the adequacy of the resources deployed, both in terms of quantity and quality, in compliance with the company's operational standards. The management of the employment relationship, from hiring to termination, is guided by the correct application of labour, social security and tax regulations, ensuring compliance with social security and tax obligations and the control of labour costs. The platform also oversees planning and control of labour costs, ensuring accurate and timely payment of wages and salaries and of the applicable contributions and taxes.

2. Inefficient staff training.

BasicNet recognises the importance of continuing education as a strategic lever for the development of its human resources and the mitigation of risks related to internal skills development. With this in mind, the Group has structured a multi-faceted integrated training system, aimed at supporting ongoing professional training and increasing the skills needed to respond to changes in the market environment. The main initiative adopted by the Group to address the identified risk is the BasicEducation platform, which plans, organises and monitors training activities, ensuring a systematic and structured approach. Training begins from the moment of induction with the "Welcome on Board" programme, a four-day introductory course that provides an overview of the Group's business model and its main corporate policies. Subsequently, workers have access to a wide range of training courses, available in both e-learning and in-person modes, with specific coaching for operational figures in stores. The effectiveness of the training delivered is monitored by analysing the training hours used, the number of staff involved and the feedback collected from participants. In addition, the onboarding programme has been bolstered by a follow-up course six months after joining the company, which seeks to consolidate the knowledge gained and gather feedback for ongoing improvement.

Data protection

Regarding the use of data, strict regulations are implemented to ensure the privacy and protection of staff information. In order to increase awareness on this issue, on the very day new employees are hired, they sign an information sheet with the Code's rules on personal data protection (Legislative Decree No. 196 of 30/6/2003), the appointment of data processors in accordance with Regulation (EU) 2016/679 and Italian Legislative Decree No. 196/2003, and they are informed of all IT procedures that are to be followed. Courses on these IT procedures are available at all times on the BasicEducation platform. Furthermore, instruction videos are available on the BasicEducation portal that explain how to handle computers and software.

[S1-5] Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

Due to the dynamic nature of BasicNet's business and the consequent need to rapidly align with relevant regulatory developments, BasicNet has not yet defined specific targets related to material impacts, risks, and opportunities connected to its workforce. As noted above, however, it oversees and monitors the most material topics with an established approach that is well integrated into its operations.

The Group believes that the provisions of current legislation, the Ethics Code and the procedure for reporting alleged wrongdoing and irregularities (Whistleblowing) provide adequate safeguards that counter discrimination, including harassment, and promote equal opportunities and other solutions in support of diversity and inclusion. As such, it did not identify the need to set targets beyond compliance with external and internal Group regulations.

CHARACTERISTICS OF BASICNET'S PEOPLE

[S1-6] Characteristics of the undertaking's employees

The following tables provide a quantitative description of the composition of BasicNet's workforce, in relation to employees and non-employees. All data were calculated in Headcount at December 31, 2025.

As at December 31, 2025, the Group had 1,771 employees – as indicated in the Corporate Governance Report of this Annual Report, in Chapter 4.3 and in the Explanatory Note to the Economic Data No. 13 - Labour Costs of the consolidated financial statements – an increase of 58% over 2024 due to an expansion of the reporting scope. This growth was driven by the consolidation of the Group's international presence and the opening of new directly operated stores, with a particular focus on the French and Spanish markets. All employees are assured equal opportunities and fair working conditions. Confirming this, women are consistently present throughout the organisation and make up 62.6% of total employees. None of the Group's employees and non-employees identify themselves with genders other than male and female, nor have they preferred not to report their gender. In view of this, the two corresponding entries are shown for information only in Table 15, but they should always be understood as being zero for all subsequent tables with respect to the subject of their workforce.

The majority of workers hold fixed-term contracts (1343 in total, 502 of whom are men and 841 of whom are women), while 424 staff are on temporary contracts. These are mainly attributable to the retail area, in view of the seasonality and because many sales outlets are still start-ups.

Table 15 - Employees by gender

Gender	2025	2024
Male	662	440
Female	1,109	681
Other	0	0
Not stated	0	0
Total employees	1,771	1,121

Table 16 - Employees by country

Country	2025	2024
Italy	1,199	757
France	314	250
Spain	91	76
Ireland	6	6
United Kingdom	18	-
Monaco	0	8
Switzerland	17	6
China	9	9
Vietnam	8	8
USA	7	1
Germany	70	-
Austria	9	-
Netherlands	15	-
Portugal	8	-
Total	1,771	1,121

Table 17 - Employees by gender and contract type

	2025					2024
	Male	Female	Other	Not disclosed	Total	Male	Female	Other	Not disclosed	Total
Total	662	1,109	0	0	1,771	440	681	0	0	1,121
Permanent	502	841	-	-	1,343	345	526	-	-	871
Fixed-term	158	266	-	-	424	95	155	-	-	250
Non guaranteed hours	2	2	0	0	4	0	0	0	0	0

	2025
	IT	FR	ES	IE	UK	MC	CH	CN	VN	US	DE	AT	NL	PT
Total	1,199	314	91	6	18	0	17	9	8	7	70	9	15	8
Permanent	917	243	74	3	18	0	15	8	5	7	38	4	5	6
Fixed-term	278	70	17	3	0	0	2	1	3	0	32	5	10	2
Non-guaranteed hours	4	0	0	0	0	0	0	0	0	0	0	0	0	0
	2024
	IT	FR	ES	IE	UK	MC	CH	CN	VN	US	DE	AT	NL	PT
Total	757	250	76	6	-	8	6	9	8	1	-	-	-	-
Permanent	583	192	66	1	-	6	6	9	7	1	-	-	-	-
Fixed-term	174	58	10	5	-	2	0	0	1	0	-	-	-	-
Non-guaranteed hours	0	0	0	0	-	0	0	0	0	0	-	-	-	-

Table 18 - Employees by country and contract type

Table 19 - Departures and turnover rate

	2025			2024
	Male	Female	Total	Male	Female	Total
Departures	176	244	420	132	236	368
Turnover rate	27%	22%	24%	30%	35%	33%

[S1-7] Characteristics of non-employee workers in the undertaking's own workforce

At December 31, 2025, the Group had 44 non-employee workers. All data were calculated in Headcount at December 31, 2025. This figure reflects, in addition to new acquisitions, the continuity of the activities for which they are employed, with temporary workers predominantly active in the logistics area and in temporary corners within shopping centres, whereas interns are placed consistently with the company's strategy of using this tool as an entry mode for staff with no experience in the assigned role.

	2025				2024
	Male	Female	Other	N/D	Total	Male	Female	Other	N/D	Total
Interns	9	18	0	0	27	3	15	0	0	18
Temporary Staff (Staff Leasing)	4	12	0	0	16	1	3	0	0	4
Other	1	0	0	0	1	0	0	0	0	0
Total	14	30	0	0	44	4	18	0	0	22

Table 20 - Non-employees by gender and type

[S1-8] Collective bargaining coverage and social dialogue

In countries where it is required, the Group applies sector-level collective bargaining agreements in compliance with applicable legislation, adopting the necessary measures to ensure respect for employees' trade union rights. In Italy and France, all workers are covered by a collective bargaining agreement, although only a small proportion choose to join national trade union organisations.

Specifically, in Italy the Group applies the Tertiary Distribution and Services Contract to the majority of the company population, with some exceptions for specific professional categories, to which different contracts apply. The following agreements apply at the main companies based in France, i.e. Kappa France and K-Way France: Convention collective nationale de l'import-export et du commerce international and the Commerce de gros et négoces connexes de bonneterie lingerie confection.

The Group also ensures the right to freedom of association, organisation and collective bargaining, guaranteeing its exercise in compliance with applicable laws and without interference or retaliation. The total percentage of employees covered by collective bargaining agreements is 91% of the Group's workforce (EEA and non-EEA). As for the EEA countries where the Group has a significant level of employment (EEA), i.e. a headcount of at least 50 employees, representing at least 10% of the total number of employees, 100% are covered. As regards social dialogue, the overall percentage of employees covered by employee representatives in EEA countries where the Group has a significant level of employment (EEA) is 60% for Italy (71% in 2024) and 24% for France (31% in 2024).

	Collective bargaining coverage		Social dialogue
Coverage rate	Employees EEA	Employees non-EEA	Workplace representation EEA
0-19%
20-39%			France
40-59%
60-79%			Italy
80-100%	Italy, France

Table 21 - Employees covered by collective agreements and social dialogue
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DIVERSITY, INCLUSION AND EQUAL OPPORTUNITIES

[S1-9] Diversity metrics

In accordance with its Ethics Code, the Group considers it essential to handle labour relations in a way that assures equality of opportunities and encourages everyone's professional development.

The tables below introduce the concept of diversity within BasicNet in quantitative terms: the number and percentage of employees in managerial positions by gender, and the division of the Group's total workforce by age group are shown. Compared to the previous year, the composition of the Top Management category increased by two percentage points in favour of women, while the 30-50 age group continues to represent the majority of the company population.

Table 22 - Top management by gender

		2025		2024
	Male	Female	Total	Male	Female	Total
Top Management (Executives)	31	12	43	23	8	31
Percentage Top Management	72%	28%	100%	74%	26%	100%

Table 23 - Employees by age group

	2025			2024
	< 30	30-50	> 50	Total	< 30	30-50	> 50	Total
Number of employees	624	901	246	1,771	391	563	167	1,121
Percentage	35%	51%	14%	100%	35%	50%	15%	100%

[S1-16] Remuneration metrics (pay gap and total remuneration)

The Group's workforce is characterised by a majority presence of women compared to men12, a figure that is reversed, however, in the representation of top management, which is male-dominated. This is also reflected in the13 gender pay gap, which stands at 22% for 2025 (17% in 2024), primarily reflecting the higher salary received by the Group's male component owing to the positions held, and in no way reflecting gender pay discrimination. The total annual remuneration14 index for 2025 is 123.33 an increase compared to the figure recorded for 2024, which was 52.74. This increase can primarily be attributed to the payment of remuneration and bonuses to certain strategic individuals who have made a significant contribution to the brand's growth in recent years. The average payroll was calculated considering all employees at December 31, 2025, including all actual pay components, such as base salary and variable elements, including bonuses, travel allowances and overtime. Finally, in the calculation of the metric in question, the actual salaries including base salary and all additional

[S1-17] Incidents, complaints and severe human rights impacts

variables of all Group employees in force as of 31/12/2025 were considered.

¹² See table 15 in chapter S1-6

¹³ The figure is calculated as (average male wage - average female wage) / average male wage, and is expressed as a % of average male wage

¹⁴ The figure is calculated by dividing the total annual salary of the person with the highest salary by the annual total remuneration for all employees (excluding the highest-paid individual)

During the reporting year, there were no reported incidents of discrimination or human rights violations; consequently, there were no sanctions or compensation for related damages.

TALENT GROWTH

[S1-13] Training and skills development metrics

2025 also saw the continuation of the project to train retail staff and ensure that the Group's Human Resources remain constantly up to date. In 2025, the Group provided approximately 11,000 hours of training to its employees. These hours include training related to Health and Safety (Legislative Decree No. 81/2008), compliance, business model, and training aimed at upskilling and reskilling (particularly through the use of the Fondimpresa Interprofessional Fund): improvement of digital skills - use of 3D software, spreadsheets; relational skills - communication, public speaking, foreign languages; time management; sustainability.

In the area of training and skills development, which is only carried out in some Group countries, the detailed metrics provided relate to the average number of training hours per employee and gender, number and percentage of employees that participated in regular performance and career development reviews.

The total number of employees reported in tables 24 and 25 does not correspond to the figure reported in S1-6, as the scope used for the denominator has been aligned with the scope for the numerator in order to ensure consistency, thereby including the entire Group, excluding recent acquisitions (Woolrich, Sundek and Sebago France).

		2025	2024
Male	Total employees	511	440
	Of which subject to regular review	8195	124
	%	19%	28%
Female	Total employees	804	681
	Of which subject to regular review	89	114
	%	11%	17%

Table 24 - Employees who participated in periodic performance and career development reviews

		2025	2024
	Total employees	511	440
Male	Hours provided	3,537	2,559
	Average training hours	6.92	5.82
	Total employees	804	681
Female	Hours provided	7,522	6,719
	Average training hours	9.36	9.87

Table 25 - Average number of training hours per employee by gender

HEALTH AND SAFETY

[S1-14] Health and safety

BasicNet places great emphasis on the health and safety of employees and non-employees, constantly monitoring injury trends and ensuring compliance with relevant regulations. In 2025, a total of eight work-related injuries occurred among Group employees - none of which resulted in death - and there were no recordable cases of workrelated ill health. Currently, BasicNet does not have a certified health and safety management system15. However, the Group is committed to ensuring safe working conditions through compliance with applicable national regulations and the adoption of preventive measures aimed at protecting the health and well-being of its workers. The following tables provide a quantitative overview of health and safety indicators in BasicNet, referring to Group employees and non-employees.

¹⁵ Since no Group location is covered by a certified OSH management system, it follows that 0% of Group employees are covered by OSH management systems

Table 26 - Work-related injuries

	2025			2024
	Employe es	Non-Employees	Employees	Non-Employees
Number of fatalities as a result of work-related injuries	0	0	0	0
Number of fatalities as a result of work-related ill health	0	0	0	0
Number of recordable work-related injuries	8	0	8	0
Rate of recordable work-related injury16	4.15	0	4.32	0
Number of recordable cases of work-related ill health	0	0	0
Number of days lost due to work-related injuries	523	0	79
Number of days lost due to work-related ill health	0	0	0

ESRS S2 - Workers in the value chain

STRATEGY FOR MANAGING WORKERS IN THE VALUE CHAIN [ESRS S2]

[ESRS S2 - SBM-3] Material impacts, risks and opportunities and their interaction with strategy and business model

The impacts generated by BasicNet vis-à-vis workers in its value chain, and the financial risks and opportunities related to the topic were assessed through the double materiality analysis. [10] In particular, the following were identified as material:

Two potential negative, systemic impacts in the industry in which the company operates, were assessed as material in the medium to long term:
Failure to safeguard workers' rights in the value chain, including in relation to secure employment, sustainable working hours, adequate wages, social dialogue, freedom of association, collective bargaining and work-life balance, could result in negative impacts on employee well-being and satisfaction;
Violations of human rights and workers' fundamental rights in the supply chain, including discrimination against vulnerable groups, child labour and forced labour, could result in negative impacts on their quality of life;
One potential negative impact, related to the occurrence of individual incidents, assessed as material in the medium-long term:
Worker injuries or ill health along the value chain occurring as a result of failure to comply with and/or properly implement H&S standards in the performance of the licensees' core operations (e.g. work-related injuries and work-related ill health).

¹⁶ The injury rate is calculated as the number of injuries, divided by the hours worked and multiplied by 1,000,000 to allow the comparison of the figure. Hours worked are recorded for employees in the Italy scope only. Those hours were added to an estimated figure for the foreign scope in order to obtain the overall figure.

Given its type of business, BasicNet deals with a vast value chain, divided between suppliers of goods and services ("non-core" suppliers), and those with Sourcing Centres and Licensees, the Group's actual business partners. As can be seen from a mapping of the Group's stakeholders (paragraph [SBM-1] Strategy, business model and value chain of the General Disclosures [ESRS 2] chapter), BasicNet's Business System distinguishes between its dealings with Licensees, considered as commercial partners, which includes the Group's Customers and consumers, and its Sourcing Centres, as core suppliers of the subsidiaries BasicItalia S.p.A. (now BasicItalia S.r.l.), K-Way S.p.A., K-Way France S.a.s, Kappa S.r.l., Sebago S.r.l., Superga S.r.l. and Kappa France S.a.s.

The workers who may be most affected by the negative impacts generated by the Group are the workers employed in Sourcing Centres (thus in the upstream value chain), who are mostly employed in apparel and footwear production and located mainly in Europe and Asia, the latter area having a material risk of incidents of child labour and forced labour17. Therefore, as a precautionary measure, BasicNet's materiality analysis identified the three potential negative impacts towards workers in the value chain.

Every sourcing centre that joins the Group's network, regardless of whether it is one of BasicNet's Clients and consumers or a core supplier of its Italian or foreign subsidiaries, must read and sign the Code and Code of Conduct, which are based on the fundamental conventions of the International Labour Organization (ILO) and the Universal Declaration of Human Rights.

As for financial risks and opportunities, the following have been identified

One opportunity:
Increased competitiveness and reputation in the market through the use of suppliers who provide responsible working conditions, ensuring compliance with occupational health and safety, equal treatment and opportunities for all;
Two risks from impacts, both material in the long term:
Risk related to inadequate management and protection of information with regard to Group sensitive information and that of the various stakeholders. Risk of erroneous/unintentional disclosure of confidential information managed by the Group;
Risk related to violations of workers' rights (including freedom of association, collective bargaining, adequate wages, overtime payment, fair working hours, health and safety, social dialogue) by business partners along the Group's supply chain. Such infractions can damage brand reputation and generate operational impacts, production delays and additional costs related to the need to identify and qualify alternative suppliers.

Of these, the second - relating to Working Conditions - mostly involves workers employed by Sourcing Centres, for the same reasons described regarding impacts. However, it was also assessed as material with reference to workers employed in the downstream value chain.

[S2-1] Policies related to value chain workers

In order to manage worker-related impacts, risks and opportunities along its value chain, BasicNet has adopted targeted policies that reflect the Group's commitment to ensuring fair working conditions and promoting respect for human rights. These principles are expressed in the Ethics Code (see Section [S1-1] Policies relating to own workforce), the Code of Conduct for Sourcing Centres, and the Procedure for Reporting Misconduct and Irregularities (whistleblowing) (see Section [S1-1] Policies relating to own workforce). These policies define requirements and minimum standards of behaviour, both within the organisation and in relations with partners in the value chain, with the aim of strengthening a safe, inclusive work environment that complies with the Group's ethical principles.

• Code of Conduct for Sourcing Centres

The Code of Conduct for Sourcing Centres defines the minimum requirements to be met by all Sourcing Centres appointed by the BasicNet Group or its affiliated companies. The document regulates key aspects such as child labour, involuntary labour, discrimination, health and safety, working hours and freedom of association. Human trafficking is not explicitly touched upon in the document, but it is understood to be included in the topic of forced labour.

¹⁷ Source: Global Slavery Index

This policy applies to all Group Sourcing Centres, without exception, and is managed by the Vice President Sourcing and Operations. The document complies with international standards in ethics and business practices, drawing inspiration from the core conventions of the International Labour Organization (ILO) and the Universal Declaration of Human Rights.

To ensure full knowledge of its contents, Sourcing Centres must ensure that workers are informed of the principles of the Code by displaying a copy of it, translated into the local language, in a conspicuous place within production facilities. The Code of Conduct for Sourcing Centres is also publicly available.

During the year, no cases of human rights violations involving workers in BasicNet's value chain were reported through the whistleblowing channel or other channels.

MANAGEMENT OF IMPACTS, RISKS AND OPPORTUNITIES RELATED TO WORKERS IN THE VALUE CHAIN

[S2-2] Processes for engaging with value chain workers about impacts

The Group has not yet implemented a formalised general process for direct involvement of workers along the value chain regarding the actual and potential impacts that affect them. However, BasicNet is committed to promoting compliance with environmental and social standards through the procurement functions of its "strategically important" subsidiaries (specifically, Kappa S.r.l., K-way S.p.A., Superga S.r.l., Sebago S.r.l., K-way France S.a.s., and Kappa France S.a.s.). It therefore adopts specific measures, including a pre-contract analysis designed to assess Sourcing Centre potential by gathering different information. The information collected includes a questionnaire, "Company Profile," which covers aspects of environmental and social compliance, and allows information to be gathered on material impacts for workers by involving supplier representatives in filling out the questionnaire.

[S2-3] Processes to remediate negative impacts and channels for value chain workers to raise concerns

The double materiality assessment shows no actual negative impacts on workers in the value chain generated by BasicNet through its business activities. In terms of potential impacts, clauses are included in the Code of Conduct to protect value chain workers with respect to all identified topics (secure employment, working hours, adequate wages, social dialogue, freedom of association, collective bargaining, work-life balance, health and safety, forced labour, child labour). In addition, BasicNet is committed to responding promptly to any issues that arise by adopting appropriate solutions in cooperation with suppliers and stakeholders. Corrective actions are assessed on a case-by-case basis, with the goal of mitigating negative impacts and improving conditions along the value chain. The effectiveness of the solutions adopted is monitored through informal and regular monitoring of the results.

the Group does not have specific communication channels dedicated to workers in the value chain for reporting and communication. However, this category of stakeholders can also make use of the whistleblowing channel, the details of which are public and available online.

To guarantee awareness of the Code of Conduct, Sourcing Centres are required to take appropriate measures to ensure that workers familiarize themselves with the contents of the Code of Conduct and to post the document, translated into the workers' local language, at each production facility in a highly visible location readily accessible to all workers. Sourcing Centres are also required to select their suppliers carefully and only to do business with suppliers that in turn ensure respect for human rights and full compliance with the principles enshrined in the Code of Conduct.

BasicNet is progressively strengthening the monitoring of its supply chain, including through third-party audits, with scheduled and unannounced inspections of selected Sourcing Centres, in order to verify compliance with the Code of Conduct. During these inspections, BasicNet and BasicNet representatives may examine employee books and records and conduct private interviews with Sourcing Centre employees, during which the employees' awareness of the Code of Conduct and the whistleblowing channel to raise concerns regarding possible wrongdoing may also be ascertained. If a violation is found to have been committed, BasicNet and the Sourcing Centre will be required to agree on a Corrective Action Plan aimed at remedying the violation promptly. If a Sourcing Centre commits repeated and/or deliberate violations of the Ethics Code, BasicNet may take the necessary corrective measures, up to and including the cancellation of orders and/or termination of business arrangements with the Sourcing Centre concerned.

By means of cooperation and dialogue with its suppliers, the company promotes awareness of the facilities and processes available to workers along the value chain so that they can pass on any concerns or needs. Within the Whistleblowing Procedure, systems to protect the confidentiality of the reporter are also detailed.

ACTIONS, METRICS AND TARGETS

[S2-4] Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions

Management of impacts

As regards material impacts, the Group has taken targeted action to prevent or mitigate negative impacts on workers in the value chain. The resources allocated to these initiatives were not material in terms of the Group's total CapEx and OpEx. As part of the impact materiality assessment, three potential negative material impacts were identified, covering the topics of secure employment, working hours, adequate wages, social dialogue, freedom of association, collective bargaining, work-life balance, health and safety, forced labour, and child labour. To prevent such impacts, [68b] all Sourcing Centres joining the Group's Network are required to view and sign the Code of Conduct. The Code is based on the fundamental conventions of the International Labour Organization (ILO) and the Universal Declaration of Human Rights [68 a]. It requires all Sourcing Centres to comply with all applicable laws and regulations relating to respect for the individual and human rights, health and safety and the environment, and maintain active procedures for prompt notification of local authorities in the event of incidents resulting from the conduct of the Sourcing Centres themselves.

Selection and monitoring of sourcing centres is outsourced to a team of people specialised in manufacturing processes whose task is to select the sources of supply to be contracted and handle the flow of information generated by the relationship between them and the licensees. The relationship with sourcing centres is governed by the "Sourcing Agreement", signed by the parties after identifying the most suitable sourcing centre and after performing a pre-contract analysis intended to assess its potential by gathering various kinds of information. The manufacturers to which we outsource production are experienced specialists in their respective industries. They only devote part of their production capacity to the BasicNet sales network.

The "Sourcing Agreement" includes clauses relating to social compliance, since the BasicNet Group adheres to, and encourages its commercial counterparts to comply with, the highest international ethical standards and practices of the business world. To make sure that these principles are effectively circulated, [68 b] sourcing centres must read and sign the Code of Conduct described above.

Signing the Sourcing Agreement and Code of Conduct are ongoing actions already applied to all Sourcing Centres with an active business relationship.

BasicNet monitors the application of the principles described therein through a structured approach involving various business functions, and especially the Procurement function, ensuring compliance with the commitments made. In addition, when necessary, BasicNet plans forms of engagement with entities in its value chain to strengthen the effectiveness of the measures taken and ensure continual monitoring of potential impacts.

The potential negative impacts identified are by their nature generated upstream in BasicNet's value chain and are not caused directly by the Group, but more by its business relationships, particularly with the Sourcing Centres. This means that the measures taken by the Group to prevent and mitigate these impacts are linked to the monitoring of procurement practices, ensuring a balance between sustainability and operational dynamics. When any tensions arise between impact prevention and other business needs, the Group evaluates solutions that ensure compliance with ethical standards while maintaining an ongoing dialogue with its partners.

Also in 2025, the assessment process was conducted on 100% of the new Sourcing Centres (78 factories in 2025, 65 in 2024), including through remote interviews and site visits.

During the reporting period, the Group received no reports of serious human rights issues or incidents related to its value chain, upstream or downstream, in line with its commitment to social responsibility.

The Group allocates internal and external resources to the management of material impacts, drawing on crossfunctional expertise and monitoring tools in line with its operational needs. It is managed through the involvement of the relevant business functions, with the support of qualified partners, ensuring an approach in line with industry standards and best practices.

Management of Risks and Opportunities

Among the risks identified, the risk related to the violation of human and labour rights in the value chain is dependent on the impacts described above in paragraph [S2-SBM 3] Material impacts, risks and opportunities and their interaction with strategy and business model. The mitigation of this risk is linked to the application of the Sourcing Agreement and the Supplier Code of Conduct, as described in this paragraph and in paragraph [S2-3] Processes to remediate negative impacts and channels for value chain workers to raise concerns.

With respect to the risk regarding the Protection of Corporate Data and Information, the Group protects the confidentiality and privacy of information and data related to its value chain by adopting specific procedures related to the IT process that govern the management of information systems and procedures adopted for IT security. The privacy and information processing policies are set forth in the Ethics Code. They specify that people subject to the Code - i.e. all Group employees and collaborators - are barred from using any information about the company, or any documents, reports, drawings or other material that is not public for purposes unrelated to the performance of their duties. The Group formally appointed the Information Security Officer (ISR) in 2019 for the Italian companies, and entrusted the management of information security-related activities to the employees of ".com" BasicSystem. For the companies managed in Italy, in order to ensure rigorous protection of company IT systems, the perimeter of the company network is protected by a sandwich of two firewalls that mitigate the risk of unauthorised access and tampering; remote access is assured by authorised VPN connections that are managed by the double firewall. Internal network protection also makes use of a new CyberIA Darktrace platform that can identify and report potential intrusions or variations with respect to the normal daily operations carried out on the corporate network. Perimeter protection of the IT infrastructure is outsourced to a certified outside body, a SOC (Security Operation Centre) that conducts 24/7 monitoring of the entire network. For the companies abroad, instructions have been provided for the constant alignment with the principles followed in Italy, and the required procedures and implementations are monitored.

In relation to the material opportunity identified as Commitment to workers along the value chain, no additional actions were carried out in the year nor are any planned in the future beyond what has already been described.

[S2-5] Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

The company has not defined specific objectives regarding material impacts, risks and opportunities related to workers in the value chain. The decision not to implement these objectives is due to the changing nature of company policies and the need to progressively align with international standards and regulations. The company continues to monitor and adapt to sustainability best practices, focusing on actions consistent with the principles of social and environmental responsibility applicable throughout the value chain.

Similarly, the company has not implemented a formalised monitoring system to assess the effectiveness of its policies and actions related to impacts, risks and opportunities related topics. Actions taken are assessed periodically, and any policy changes are made based on emerging needs and regulatory developments.

Finally, regular audits are implemented in cooperation with suppliers and partners, which include scheduled visits by internal resources, required audit reports and, if necessary, scheduled and unscheduled inspections, as required by the Code of Conduct.

ESRS S4 - Consumers and end-users

STRATEGY FOR MANAGING CONSUMERS AND END-USERS [ESRS S4]

[ESRS S4 - SBM-3] Material impacts, risks and opportunities and their interaction with strategy and business model

The impacts generated by BasicNet in relation to its customers and end-users, and the financial risks and opportunities related to the issue, were assessed through the double materiality assessment. In particular, only one potential negative impact was identified as material, which is systemic in the industry in which BasicNet operates and assessed as material over the medium term:

• Potential inefficiency in combatting counterfeiting may bring to market products that are of poor quality, lack quality and safety controls, and are potentially harmful to consumers.

Given its type of business, in its downstream value chain BasicNet deals directly with Licensees, understood as Group business partners, Customers and Consumers, who in turn supply the product to end-users.

Both of these categories were considered during the double materiality assessment and both may be subject to the impact identified. However, the network operated directly by BasicNet through a proprietary portal connects Sourcing Centres and Licensees directly, thus ensuring the originality of the products supplied. [11] Therefore, the category potentially most affected by the potential negative impact is end-users, who may not have the tools to select an authorised distribution channel and thus suffer the purchase of counterfeit products. [12] This is true and is also reflected in the only material risk identified, over the medium and long term:

Risk of the BasicNet Group's products/brands being copied and marketed by third parties without Group's consent.

In terms of financial opportunities, two opportunities were identified, arising from the potential implementation of ESG actions:

Opportunity for a communication/marketing activity related to its brands and products/services and particularly related to the Group's sustainability performance/products to positively affect the Group's business and reputation;
− Economic, legal and reputational opportunity arising from the ongoing provision of traceable and transparent product information (adoption of BasicLabel project and alignment with the Ecodesign for Sustainable Products Regulation).

MANAGEMENT OF IMPACTS, RISKS, AND OPPORTUNITIES WITH RESPECT TO CONSUMERS AND END-USERS

[S4-1] Policies related to consumers and end-users

BasicNet adopts a structured approach to management of impacts, risks and opportunities related to consumers and end-users, applying cross-cutting policies that ensure high standards of protection and a safe and transparent shopping experience, with the goal of ensuring a balance between quality, safety, and satisfaction. These policies cover several aspects, including quality management and customer service practices. Mechanisms are also provided to address potential counterfeiting issues, with a focus on data and privacy protection. In addition, in full compliance, the company adheres to the requirements of the Consumer Code, which, among other matters, details the rules regarding the right of withdrawal and product warranty. The company monitors and responds to consumer needs, adapting its actions according to circumstances and pursuing a balance between risks and opportunities while respecting stakeholders. The policies adopted by the Group cover all Group consumers without distinction, ensuring uniformity of treatment and access to the protection provided.

• Privacy and data protection policy

BasicNet has strict measures in place to ensure the protection of consumers' privacy and personal data. Data collected through sales and service channels are processed solely for the purposes stated and with the user's consent, in compliance with applicable data protection regulations. In addition, the Group adopts technical and organisational measures to prevent unauthorised access and ensure data security. The policy covers all data collection, processing and storage operations globally along the value chain, and involves consumers, employees, partners and suppliers. Data protection management is entrusted to external professionals contracted by the Group.

[S4-2] Processes for engaging with consumers and end-users about impacts

Currently, the Group does not have a structured process for directly engaging consumers about actual and potential impacts that affect them. However, as part of the identification and assessment of these impacts, the Quality Assurance, Quality & Compliance and Marketing functions are involved.

[S4-3] Processes to remediate negative impacts and channels for consumers and end-users to raise concerns

The Group has set up specific channels for receiving complaints, supported by an internal analysis process designed to identify any critical issues and define corrective action. This may include product replacement, improvement of technical features or adjustment of business practices, the effectiveness of which is monitored through consumer feedback and quality control. In addition, the product warranty system contributes to customer protection by ensuring compliance with standards and providing remedies in the event of defects.

To ensure direct and timely interaction, the Group provides several communication channels, including a dedicated customer service department, accessible via e-mail, telephone and contact forms on the official website. These tools make it possible to receive service requests, reports and complaints, ensuring effective support and structured management of reported issues.

• Direct customer service channel

The direct customer service channel is used to handle complaints about defective products. Through the brands' websites, consumers can report any issues and receive timely and targeted assistance. The channel is open to distributors, stores, and all consumers who buy through direct sales, or who use Group services. The customer service channel is active in all geographical areas where the Group operates, with possible variations depending on the resources available in each region. The process is managed by individual brand companies to ensure effective complaint resolution and maintain customer trust.

• Platform for Reporting Counterfeiting

The platform for reporting counterfeit products can be accessed via the company website or through QR codes on products. Every report is carefully reviewed and may result in actions such as blocking the sale of counterfeit goods, removing online content or involving the relevant authorities.

Every report received is analysed individually through the evaluation of product samples and available information, followed by the drafting of technical reports. Where preliminary investigative activities are required for potential seizures, the Group coordinates and oversees these operations, managing the removal, takedown and reassignment of illegal websites. The monitoring and enforcement of measures are supported by specialised external entities, particularly for tackling online counterfeiting. The effectiveness of these activities is ensured through the continuous improvement of communication channels and the active involvement of end-users, ensuring that the solutions adopted respond promptly and effectively to consumer needs.

BasicNet has adopted specific communication policies to ensure that consumers and end-users are fully aware of the structures and processes available for raising concerns or needs and receiving assistance. To this end, information regarding reporting channels is regularly disseminated through the Company's official communication channels, including its website, customer service channels and a dedicated online platform for reporting counterfeiting, thereby ensuring easy and transparent access.

The Group has not put in place specific policies to protect individuals from retaliation when using the channels described above, as reports submitted by consumers and end-users help to protect the Group from counterfeitingrelated risks and are solely beneficial, making the possibility of retaliation effectively non-existent. On the other hand, the protection of personal data and the identity of whistleblowers is ensured through the application of the privacy policy, as described in paragraph [S4-1] Policies related to consumers and end-users, and through the careful management of data by employees, as described in the "Data protection" section in paragraph [S1-4] Taking action on material impacts and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions and approaches, in the ESRS S1 – Own workforce section.

[S4-4] Taking action on material impacts on consumers and end-users, and approaches to managing material risks and pursuing material opportunities related to consumers and endusers, and effectiveness of those actions

The impact materiality assessment identified one material potential negative impact for consumers and end-users: the risk of counterfeiting. To prevent it, each product developed and marketed by BasicNet has a label containing all information required under applicable Italian and international regulations, including the Consumer Code (Legislative Decree No. 206/2005), Regulation (EU) 1007/2011 on textile fibre names and labelling, and any specific national regulations required by individual licensees. In addition, each label also includes information that links the product to licensee orders and, together with other data, enables BasicNet to verify that the product is original and conforms with goods available on the market.

To support these efforts, the BasicLabel project allows consumers to confirm the authenticity of purchased products, ensuring traceability from product creation through to the point of sale. The BasicLabel project has been active for all BasicNet-branded products since 2012. Managed entirely online, the system integrates data from the BasicSamples and BasicSpecs platforms, which support collection development, sample sales, and technical specifications, respectively. Additionally, when an order is confirmed through BasicFactory (the order management platform for Sourcing Centres), an automatic label order is issued to the BasicLabel manufacturers, corresponding to the number of items to be produced, including acceptable tolerances. This process ensures the close monitoring of actual production. The resources allocated to this initiative were not material in terms of the Group's total CapEx and OpEx.

The effectiveness of the actions adopted is monitored through direct feedback and the tracking of complaints received. For example, in 2023, following a period of testing and analysis, RFID technology was found not to be the most suitable solution for all Group brands. As a result, its use was consolidated exclusively for the K-Way brand, which is more retail-oriented, while the QR label was adopted for other brands, thereby optimising traceability and goods management processes, in line with the specific needs of each brand.

The Group ensures the availability and effectiveness of its remedy processes through a structured monitoring, intervention and results verification system.

Reports come directly from Licensees or end-users through various dedicated channels, including the Customer Service Channel, the Counterfeiting Reporting Platform (accessible through QR codes on products), a direct website link for reporting defective products and a product warranty policy valid for two years. These tools ensure direct and transparent access for end-users, thereby enabling the effective management of complaints.

Upon receipt of a report, BasicNet follows a structured approach to identify appropriate and necessary actions, analysing the issue with the involvement of internal teams and specialised external entities, where necessary. Based on this assessment, the most appropriate corrective actions are defined, which may include adjustments to product quality, the enhancement of customer support channels and the adoption of enforcement actions, such as reporting the marketing of counterfeit products through unauthorised channels to authorities and removing illegal e-commerce sites.

The identified risk, related to Counterfeiting, is linked to the corresponding impact, and its mitigation is based on the actions described in this paragraph and in paragraph [S4-3] Processes to remediate negative impacts and channels for consumers and end-users to raise concerns.

No additional actions beyond those already described were taken during the year, nor are any planned for the future, in relation to material opportunities.

BasicNet adopts a proactive approach to preventing material negative impacts on consumers and end-users, with particular attention to the production, marketing, sales and data management phases. The Group operates in full compliance with applicable laws and standards, ensuring responsible practices across the entire value chain. In complex situations where tensions may arise between impact prevention and other business needs, BasicNet carefully assesses each scenario, seeking solutions that balance the various factors involved.

To date, no material incidents have been reported in relation to the human rights of consumers or end-users. BasicNet continuously monitors these aspects, adopting measures to guarantee that fundamental rights are respected along the entire value chain.

BasicNet allocates dedicated resources to the management of material impacts on consumers and end-users, involving various corporate functions. Operational, Legal, Marketing and Quality & Compliance teams monitor and manage potential or actual impacts, ensuring compliance with applicable standards and regulations. Where necessary, the Group collaborates with external experts to strengthen the effectiveness of its corrective and preventive actions, ensuring the ongoing monitoring and responsible management of key issues.

METRICS AND TARGETS

[S4-5] Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

Due to the dynamic nature of BasicNet's business and the consequent need to rapidly align with relevant regulatory developments, BasicNet has not yet set specific targets related to material impacts, risks and opportunities concerning consumers and end-users. However, it monitors product quality by continuously tracking and analysing customer complaints,

reports concerning product quality and counterfeit items and any other issues raised by customers, thereby ensuring a continuous commitment to maintaining high standards of quality and customer satisfaction.

The Group believes that through the continuous monitoring of this topic and the analysis of complaints, product quality issues, counterfeit items and other concerns, its oversight upholds high standards of product quality and customer satisfaction. Therefore, it has not identified the need to set targets beyond compliance with internal and external regulations. In 2025, three reports concerning counterfeits of Group-branded products were received through the dedicated "Hunt the Fake" section, accessible on the BasicTrademark.com website and all websites dedicated to online sales. An additional 375 counterfeiting reports were received in 2025 through other channels, such as government authorities. The total number of counterfeit reports in 2025 increased by approximately 11% on 2024 (338 reports) and primarily concerned Kappa brand products (71% of all reports in 2025).

All data related to counterfeiting reports are collected and monitored through an internal database, which consolidates reports received across all Group brands and reporting channels. The total number of reports received (375) represents the sum of all reports received for all brands and through all channels.

GOVERNANCE INFORMATION (ESRS G)

ESRS G1 - Business conduct

[ESRS 2 GOV-1] The role of the administrative, management and supervisory bodies

[ESRS 2 IRO-1] Description of the processes to identify and assess material impacts, risks and opportunities

The Group's double materiality assessment process also considered the topic of Business Conduct, reconfirming it as relevant from an impact materiality perspective, identifying three material impacts:

A potential, negative impact in the medium to long term:
o Potential non-compliance with the principles of fair behaviour and minimum standards of ethical conduct along the value chain, resulting in negative repercussions on the financial community, and consequently reputational damage;
Two actual material positive impacts in the short term:
o Transparent and collaborative management of relationships enables sourcing centres to operate in a context of trust, supported by clear communication and continuous access to the information required to enhance their capabilities;
o Targeted employee training on anti-corruption topics helps raise awareness among employees and foster a corporate culture based on ethics and transparency.

In addition, a material risk was also identified, as described in paragraph [IRO-2] Disclosure requirements in ESRS covered by the undertaking's sustainability statement in the General Disclosures (ESRS 2) section:

• Risk that alliances or other relationships/collaborations with counterparts (licensees-manufacturerssponsors) are inefficient and/or ineffective and/or the result of inadequate selection, and may adversely affect the achievement of the Group's intended goals and standards (e.g. product quantity and quality).

The analysis took into account the specific characteristics of BasicNet's business and its business relationships, as detailed in the paragraph "Group Double Materiality" of the "General Disclosures (ESRS 2)" section.

[G1-1] Corporate culture and business conduct policies

BasicNet considers appropriate business conduct to be imperative and has established high ethical standards to which it is committed, under the guidance of its Board of Directors, whose role and responsibilities with regard to corporate conduct are detailed in paragraph [GOV-5] Risk management and internal controls over sustainability reporting of the General Disclosures (ESRS 2) section.

As part of its commitment to ensuring corporate governance aligned with the highest standards of ethics and transparency, the Group has adopted policies to regulate its business conduct. These policies outline the principles, rules and responsibilities governing business activities and relationships with stakeholders, with the objective of ensuring fairness, integrity and regulatory compliance. These aspects are governed by the Ethics Code (see paragraph [S1-1] Policies related to the own workforce in the Social Information (ESRS S), the Code of Conduct for Sourcing Centres (see paragraph [S2-1] Policies related to value chain workers (ESRS S) chapter), the Procedure for reporting alleged misconduct and irregularities (whistleblowing) (see paragraph [S1-1] Policies related to own workforce (ESRS S) chapter) in the Social Information section), the Model pursuant to Legislative Decree No. 231/2001, and the Related Parties Procedure.

• Model pursuant to Legislative Decree No. 231/2001

The Organisation, Management and Control Model adopted by BasicNet pursuant to Legislative Decree No. 231/2001 is a system of rules and procedures designed to prevent the commission of the offences covered by the Decree, through the effective control of corporate processes and the promotion of a culture of legality and business ethics. The provisions contained in the Model are integrated with the Group's Ethics Code and the Code of Conduct for Sourcing Centres, which establish the guidelines for responsible conduct in relations with various stakeholders.

The Model applies to all companies in the BasicNet Group and is adopted by the Parent Company, which is responsible for its development and proposes its adoption to subsidiaries. The Parent Company's Board of Directors is responsible for updates, while the Supervisory Board monitors the Model's proper implementation across Group companies.

BasicNet adheres to international standards of business ethics and practices, with particular reference to the fundamental conventions of the International Labour Organization (ILO) and the Universal Declaration of Human Rights, as contained in its Code of Conduct for Sourcing Centres. The Model as per Legislative Decree No. 231/2001 is published in the Corporate Governance section of the BasicNet.com website and is made operational and accessible to the Supervisory Board, heads of corporate functions and internal control bodies via a dedicated platform.

• Related Party Transactions Policy

The Related Party Transactions Procedure, adopted by the Board of Directors of BasicNet S.p.A., sets out the methods for identifying, approving and managing related party transactions in accordance with Article 2391-bis of the Civil Code and the relevant Consob Regulation. The objective of the procedure is to ensure transparency and the substantive and procedural fairness of transactions, thereby mitigating the risk of conflicts of interest and ensuring compliance with applicable legislation.

The Procedure applies to BasicNet S.p.A. and its subsidiaries and provides a simplified procedure for significant transactions, as BasicNet qualifies as a "smaller company" under the Consob Regulation on related party transactions.

BasicNet's Board of Directors is responsible for adopting and updating the Procedure, supported by the Related Party Transactions Committee, which expresses reasoned opinions on the transactions, assessing their alignment with the Company's interests and the fairness of the conditions. The CEO is authorised to make formal amendments, subject to the Committee's prior approval.

To ensure maximum transparency and accessibility, the Procedure is publicly available on the Company's website.

BasicNet promotes business conduct founded on the principles of integrity, transparency and accountability, ensuring a working environment that adheres to the highest ethical standards. To this end, as outlined above, the Group has adopted a structured system for reporting alleged misconduct or irregularities through its Whistleblowing Procedure and has implemented an Organisation, Management and Control Model pursuant to Legislative Decree No. 231/2001, which includes specific measures to prevent both corruption and bribery.

In line with the Whistleblowing Procedure, BasicNet has established a dedicated reporting system that enables employees, collaborators, suppliers and other stakeholders to report actual or suspected breaches of the Ethics Code, the 231 Model or any applicable internal and external regulations. The reporting system is accessible via a dedicated online platform (https://basicnet.segnalazioni.net/) and other alternative channels, ensuring the anonymity of the reporter and the confidentiality of the information provided, in compliance with applicable legislation.

To strengthen the protection of whistleblowers, the Group has adopted specific measures to guarantee anonymity and shield the reporter from retaliation, as described in the Procedure. Reports are managed by the Supervisory Board and the Internal Audit function, which operate independently and impartially to ensure a prompt and objective investigation process. The personnel responsible for receiving and managing reports are properly trained to ensure proper application of procedures and protection of the reporter's rights.

BasicNet integrates the prevention of corruption into its governance system through the 231 Model, which regulates corporate behaviour and processes with the objective of reducing the risk of unlawful conduct. The Model complies with international ethics and compliance standards, including the United Nations Convention against corruption, and provides for regular audits and specific controls over business functions most exposed to the risk of corruption.

To promote a culture of corporate ethics, BasicNet has developed a mandatory training programme for all employees and collaborators, which seeks to raise awareness about compliance, whistleblowing management and the prevention of corruption. Training is delivered periodically through online modules and dedicated sessions, ensuring that staff are continuously updated on the Group's principles and behavioural rules. In 2025, awarenessraising efforts continued through targeted initiatives to reinforce the Group's commitment to transparency and integrity, including detailed information on the Whistleblowing system and the 231 Model. Further information on this topic is provided in paragraph [G1-3] Prevention and detection of corruption and bribery in this section.

BasicNet identifies the areas most exposed to corruption risk based on the offences against the PA deemed to pose a risk of occurrence, as listed in the Special Section of the Group's 231 Model. As a result, the following areas have been identified as at risk:

management of Production Licensees;
management of Distribution Licensees;
management of goods and services procurement;
company administration, accounting and financial statements;
management of relations with Public Administration; dispute management;
management of personnel;
charitable donations and gifts;
communication and sponsorship

[G1-2] Management of relationships with suppliers

Supply chain management is a central element for BasicNet, which operates through a business model based on a global network of partners.

To ensure responsible supply chain management, BasicNet has adopted specific internal procedures governing the selection, qualification and monitoring of suppliers. These procedures require all Sourcing Centres joining the Group's network to sign the Sourcing Agreement, which includes specific clauses on social and environmental compliance, in addition to the Code of Conduct, which is based on the fundamental conventions of the International Labour Organization (ILO) and the Universal Declaration of Human Rights. For further details on the topic of selecting Sourcing Centres, please refer to paragraph [S2-4] Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions of the ESRS S2 – Workers in the value chain chapter.

With a view to ensuring operational continuity and mitigating risks associated with the supply chain, BasicNet adopts production diversification measures. Specifically, for strategic items, the Group requires production to be distributed across at least two or three Sourcing Centres located in different geographic areas, with the alternation of production sources every five years.

In addition, the Group has prepared a Product Compliance and Guidelines document, which outlines requirements, responsibilities and procedures relating to product quality, safety and compliance. These guidelines are supported by systematic testing activities covering compliance, quality and safety across fabrics, samples and finished products, in addition to the periodic updating of the PRSL (Product Restricted Substances List), thereby contributing to the consolidation of a responsible and transparent supply chain.

BasicNet integrates social and environmental criteria into its supplier selection processes through a structured approach designed to ensure transparency and accountability along the entire supply chain. The Code of Conduct for Sourcing Centres constitutes the first level of assurance, establishing clear standards on human rights, working conditions, environmental protection and business integrity. All suppliers are required to sign it.

Suppliers are selected based on competence, professionalism, cost-efficiency, fairness and transparency, ensuring that the Group's partners operate in accordance with local laws and the sustainability principles adopted by BasicNet.

To ensure effective control over procurement, BasicNet segregates duties across its various business units, with processes covering the identification of needs, the selection, certification and procurement of suppliers, in addition to the confirmation of services rendered or goods received, and payment.

[Par. 14] BasicNet adopts a structured system for managing supplier payments, with a strong focus on timeliness and transparency, in order to foster fair and sustainable business relationships. The Company uses a dedicated application to monitor payment due dates, called the "Supplier Payment Schedule", which allows BasicNet to track outstanding invoices and plan payments efficiently.

The payment system has multiple priority levels, assigned based on the type of supplier and contractual terms. This ensures that deadlines are met according to a clear and defined order of priority. The procedure includes automatic payments for suppliers with predefined banking methods, while others are managed through a review and authorisation process that ensures compliance with the Group's commitments.

Standard payment terms vary depending on the type of order and are established during the order entry procedure. Trade payables are normally settled between 30 and 120 days. We note that the carrying amount of trade payables corresponds to their fair value, and any exceptions must be approved by company managers depending on the amounts involved.

[G1-3] Prevention and detection of corruption and bribery

BasicNet adopts a zero-tolerance approach to all forms of corruption, whether active or passive, and to unlawful practices that may compromise the principles of transparency, loyalty and fairness in the conduct of its activities. It pursues these objectives through an integrated system of safeguards that includes the Organisation, Management and Control Model pursuant to Legislative Decree No. 231/2001 (231 Model), specific protocols to prevent the risk of corruption, administrative, accounting and financial procedures based on the principles of segregation of functions and traceability of transactions, and compliance with the Ethics Code and the Code of Conduct for Sourcing Centres, which define standards of conduct based on legality and integrity in relations with stakeholders. While the Group's foreign companies are not subject to the regulations set forth in Legislative Decree No. 231/2001 and therefore have not adopted organisational models pursuant to the same regulations, they fully share the principles of the Group's Ethics Code and comply with internal policies and procedures on preventing and combating corruption. By doing so they guarantee, within a uniform internal regulatory framework, uniform standards of conduct and an effective system to safeguard against the risk of corruption, in line with international best practices and applicable regulations in the various geographical areas in which the Group operates; for further details, see the chapter "CONFLICTS OF INTEREST AND PREVENTION OF BRIBERY AND CORRUPTION" in the Directors' Report.

As described in paragraph [S1-3] Processes to remediate negative impacts and channels for own workers to raise concerns in the ESRS S1 – Own workforce section, BasicNet has established a system for reporting violations, in compliance with whistleblowing regulations, which enables employees and stakeholders to report non-compliant behaviour. Reports are submitted through dedicated channels and handled by the Supervisory Board (SB), which acts independently from the management structure involved in the issue. The SB receives and analyses reports, ensuring the highest level of confidentiality and protection of the reporter. It conducts specific investigations, reporting its findings periodically to the Board of Directors and other corporate control bodies. This mechanism ensures effective governance in managing potential incidents of corruption and promotes transparency in business operations.

In this regard, BasicNet is committed to communicating and disseminating the provisions of its 231 Model and related documents to the relevant parties, ensuring they are accessible and understandable. Any updates are communicated through company e-mails, the intranet platform and dedicated training sessions. In addition, BasicNet makes a summary of its corporate integrity policies available to third parties on its institutional website, in order to maximise the dissemination of its principles and corporate rules.

In light of BasicNet's business model, no specific functions or roles have been identified as being exposed to a particularly high risk of corruption. Alongside updates to policies and practices related to corruption, BasicNet promotes a corporate culture based on legality and the prevention of corruption through a structured, mandatory training programme linked to compliance with Legislative Decree No. 231/2001 and aimed at all personnel within the Group's Italian perimeter, where the legislation is in force. The training programme is designed to provide indepth knowledge of the company functions and areas most exposed to the risk of offences, ensuring ongoing alignment with applicable legal provisions. The course is delivered continuously to all new hires who join the Company and is subsequently updated and repeated in line with regulatory developments. In 2025, this training involved 30% of the total population included in the risk categories, all operating in Italy (85% in 2024 following the update of the Model 231 and the subsequent launch of a new training cycle). The course is regularly updated based on the current regulatory provisions and offered again to all Group staff in its most recent version. In 2025, the training addressed the following topics:

Offences covered by the decree and those deemed relevant
SB; Ethics Code; whistleblowing legislation
Sanctions and disciplinary system

Training on corruption and bribery is extended to the entire organisation, regardless of an individual's role or function. As for the Italian perimeter, BasicNet ensures that 100% of functions identified as potentially at risk are covered by training programs, thereby reinforcing a systemic approach to corruption prevention and integrity within the organisation (as was the case in 2024).

The principles established by Legislative Decree No. 231/2001 are presented in a one-hour video training course made available to members of the administrative, management and supervisory bodies. The Supervisory Board ensures that this content is regularly updated and disseminated in order to provide continuous and comprehensive information on regulatory compliance and ethical integrity, in line with international best practices.

[G1-4] Confirmed incidents of corruption or bribery

In line with its commitment to transparency and integrity, BasicNet provides below the information regarding confirmed incidents of corruption or bribery that occurred during the reporting period, during which BasicNet received no convictions or related fines for breaches of anti-corruption laws.

Likewise, the Group did not report any confirmed incidents of corruption and bribery involving its workforce or business partners that resulted in the termination of contractual relationships.

Any convictions, fines or termination of business relationships due to breaches related to corruption or bribery are recorded and monitored by the Legal and Administration departments, which promptly inform management accordingly.

Table 27 - Incidents of corruption

	2025	2024
Number of convictions for violation of anti-corruption and anti-bribery laws (no.)	0	0
Amount of fines for violation of anti-corruption and anti-bribery laws (Euro)	0	0
Total number of confirmed incidents of corruption or bribery (no.)	0	0
Number of confirmed incidents in which own workers were dismissed or disciplined for corruption or bribery-related incidents (no.)	0	0
Number of confirmed incidents relating to contracts with business partners that were terminated or not renewed due to violations related to corruption or bribery (no.)	0	0

ANNEX

Disclosure requirements index

Table 28 - List of material DRs

LIST OF MATERIAL DISCLOSURE REQUIREMENTS	PAGE REFERENCE
ESRS 2 - GENERAL DISCLOSURES
BP-1 General basis for preparation of the sustainability statements	65
BP-2 - Disclosures in relation to specific circumstances	65
GOV-1 - The role of the administrative, management and supervisory bodies	66
GOV-2 - Information provided to and sustainability matters addressed by the undertaking's administrative, management and supervisory bodies	69
GOV-3 - Integration of sustainability-related performance in incentive schemes	70
GOV-4 - Statement on due diligence	70
GOV-5 - Risk management and internal controls over sustainability reporting	72
SBM-1 - Strategy, business model and value chain	73
SBM-2 - Interests and views of stakeholders	77
SBM-3 - Material impacts, risks and opportunities and their interaction with strategy and business model	79
IRO-1 - Description of the processes to identify and assess material impacts, risks and opportunities	79
IRO-2 - Disclosure Requirements in ESRS covered by the undertaking's sustainability statement	79
ESRS E1 - CLIMATE CHANGE
ESRS 2 SBM-3 E1 - Material impacts, risks and opportunities and their interaction with strategy and business model	103
ESRS 2 IRO-1 E1 - Description of the processes to identify and assess material climate related impacts, risks and opportunities	103
E1-1 - Transition plan for climate change mitigation	104
ESRS 2 GOV-3 E1 - Integration of sustainability-related performance in incentive schemes	70
E1-2 - Policies related to climate change mitigation and adaptation	104
E1-3 - Actions and resources in relation to climate change policies	104
E1-4 - Targets related to climate change mitigation and adaptation	104
E1-5 - Energy consumption and mix	105
E1-6 - Gross Scopes 1, 2, 3 and Total GHG emissions	106
E1-9 - Anticipated financial effects from material physical and transition risks and potential climate-related opportunities	The Group has chosen to apply the phase-in option
ESRS E3 - WATER AND MARINE RESOURCES
ESRS 2 IRO-1-E3 — Description of the processes to identify and assess material water and marine resources-related impacts, risks and opportunities	112
E3-1 - Policies related to water and marine resources	112
E3-2 - Actions and resources related to water and marine resources	112

E3-3 - Targets related to water and marine resources	112
E3-4 - Water consumption	The topic is considered material only in relation to the value chain and, consequently, its metrics are disclosed only qualitatively.
E3-5 - Anticipated financial effects from water and marine resources-related impacts, risks and opportunities	The Group has chosen to apply the phase-in option.
ESRS E5 - RESOURCE USE AND CIRCULAR ECONOMY
ESRS 2 IRO-1 E5 - Description of the processes to identify and assess material resource use and circular economy-related impacts, risks and opportunities	113
E5-1 - Policies related to resource use and circular economy	114
E5-2 - Actions and resources related to resource use and circular economy	114
E5-3 - Targets related to resource use and circular economy	114
E5-4 - Resource inflows	The topic is considered material only in relation to the value chain and, consequently, its metrics are disclosed only qualitatively.
E5-5 - Resource outflows	The topic is considered material only in relation to the value chain and, consequently, its metrics are disclosed only qualitatively.
E5-6 - Anticipated financial effects from resource use and circular economy-related impacts, risks and opportunities	The Group has chosen to apply the phase-in option
ESRS S1 - OWN WORKFORCE
ESRS 2 SBM-3 S1 - Material impacts, risks and opportunities and their interaction with strategy and business model	117
S1-1 - Policies related to own workforce	118
S1-2 - Processes for engaging with own workers and workers' representatives about impacts	119
S1-3 – Processes to remediate negative impacts and channels for own workers to raise concerns	120
S1-4 - Taking action on material impacts and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions and approaches	121
S1-5 - Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities	123
S1-6 - Characteristics of the undertaking's employees	123
S1-7 - Characteristics of non-employee workers in the undertaking's own workforce	125
S1-8 - Collective bargaining coverage and social dialogue	126
S1-9 - Diversity metrics	127
S1-13 - Training and skills development metrics	128
S1-14 – Health and safety metrics	129
S1-15 - Work-life balance metrics	The Group has chosen to apply the phase-in option

S1-16 – Remuneration metrics (pay gap and total remuneration)	127
S1-17 - Incidents, complaints and severe human rights impacts	128
ESRS S2 - WORKERS IN THE VALUE CHAIN
ESRS 2 SBM-3 S2 - Material impacts, risks and opportunities and their interaction with strategy and business model	130
S2-1 - Policies related to value chain workers	131
S2-2 - Processes for engaging with value chain workers about impacts	132
S2-3 - Processes to remediate negative impacts and channels for value chain workers to raise concerns	132
S2-4 - Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions	133
S2-5 - Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities	134
ESRS S4 - CONSUMERS AND END-USERS
ESRS 2 SBM-2 S4 - Material impacts, risks and opportunities and their interaction with strategy and business model	135
S4-1 – Policies related to consumers and end-users	135
S4-2 - Processes for engaging with consumers and end-users about impacts	136
S4-3 - Processes to remediate negative impacts and channels for consumers and end users to raise concerns	136
S4-4 - Taking action on material impacts on consumers and end-users, and approaches to managing material risks and pursuing material opportunities related to consumers and end-users, and effectiveness of those actions	137
S4-5 - Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities	138
ESRS G1 - BUSINESS CONDUCT
ESRS 2 GOV-1 G1 - The role of the administrative, management and supervisory bodies	139
ESRS 2 IRO-1-G1 – Description of the processes to identify and assess material impacts, risks and opportunities	139
G1-1 - Corporate culture and business conduct policies	139
G1-2 - Management of relationships with suppliers	139
G1-3 - Prevention and detection of corruption and bribery	141
G1-4 - Confirmed incidents of corruption or bribery	142

Index of disclosure requirements included by reference

Table 29 - List of DRs included by reference

DISCLOSURE REQUIREMENT	REFERENCE
ESRS 2 - BP-1, par. 5c
Coverage of the upstream and downstream	Sustainability Statement 2025: "The Group's Double Materiality"
value chain in the Group's materiality
analysis
ESRS 2 - GOV-1, par. 20 a, 21 a, d, e	Directors' Report: "COMPOSITION OF THE BOARD OF DIRECTORS"; "INTERNAL
Composition and diversity of the Group's	BOARD COMMITTEES"; "COMPOSITION AND FUNCTIONING OF THE BOARD OF
administrative, management and supervisory	STATUTORY AUDITORS"
bodies
ESRS 2 - GOV-1, par. 20 b, 20 c, 21 c
Roles, responsibilities, and competencies of	Directors' Report: ROLE OF THE BOARD OF DIRECTORS
the administrative, management, and
supervisory bodies on sustainability matters ESRS 2 - GOV-4, Table 2, point b
Stakeholder engagement in key phases of due	Sustainability Statement 2025: "SBM-2 - Interests and views of stakeholders"
diligence
ESRS 2 - SMB-1, par. 40 b
Breakdown of revenues by significant ESRS
segments and reconciliation with IFRS 8	Directors' Report: "2025 FINANCIAL PERFORMANCE OVERVIEW"
information
ENVIRONMENTAL INFORMATION (ESRS
E) - EUROPEAN TAXONOMY	Directors' Report
KPI calculation methodology
SBM-3, par. 19 a, b, c
Resilience of strategy and business model in	Sustainability Statement 2025: "The Group's Double Materiality"
the face of climate change
ESRS 2 IRO-1, par. 20 c ii
Process to identify and assess climate-related	Sustainability Statement 2025: "The Group's Double Materiality"
impacts, risks and opportunities
ESRS E1-5, par. 43 Reconciliation of net revenues from high	Sustainability Statement 2025: "E1-5 - Energy consumption and mix"
climate impact sectors
ESRS S1-1, par. 22
Human trafficking, forced and child labour in	Sustainability Statement 2025: "S2-1 - Policies related to value chain workers"
workforce policies
ESRS S1-4, par. 41
Management of material negative impacts	Sustainability Statement 2025: "S1 – SBM-3 - Material impacts, risks and
on own workforce	opportunities and their interaction with strategy and business model"
ESRS S1-6	Directors' Report: "COMPOSITION OF THE BOARD OF DIRECTORS (pursuant to
Characteristics of the undertaking's	Article 123-bis, paragraph 2, letters d), and d-bis) of the CFA)"
employees
ESRS S2-1, par. 16
Group policies to manage its material	Sustainability Statement 2025: "S1-1 - Policies related to own workforce"
impacts, risks and opportunities related to value chain workers
ESRS S2-4, par. 34
Group actions to prevent, mitigate and	Sustainability Statement 2025: "S2-SBM-3 - Material impacts, risks and
remediate the negative material impacts on	opportunities and their interaction with strategy and business model"
value chain workers
ESRS S2-4, par. 34
Group actions to prevent, mitigate and	Sustainability Statement 2025: "S2-3 - Processes to remediate negative impacts
remediate the negative material impacts on	and channels for value chain workers to raise concerns";
value chain workers
ESRS S4-3 par. 26
Awareness and protection of consumers and	Sustainability Statement 2025: "S4-1 - Policies related to consumers and end
end-users when accessing Group facilities	users"
and processes

ESRS S4-3 par. 26 Awareness and protection of consumers and end-users when accessing Group facilities and processes	Sustainability Statement 2025: "S1-4 - Taking action on material impacts and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions and approaches"
ESRS G1 ESRS 2 GOV-1, par. 5	Sustainability Statement 2025: "GOV-5" - Risk management and internal controls over sustainability reporting"
ESRS G1 ESRS 2 IRO-1, par. 6	2025 Sustainability Statement: "IRO-2 – Disclosure requirements in ESRS covered by the undertaking's sustainability statement"; Group Double Materiality" in the chapter "General Information (ESRS 2
ESRS G1-1, par. 7; 9
Group business conduct policies and	Sustainability Statement 2025: "S1-1 - Policies related to own workforce"
corporate culture
ESRS G1-1, par. 7; 9
Group business conduct policies and	Sustainability Statement 2025: "S2-1 - Policies related to value chain workers"
corporate culture
ESRS G1-1, par. 10
Group mechanisms, policies and actions	Sustainability Statement 2025: "G1-3 - Prevention and detection of corruption
related to business conduct, anti-corruption	and bribery"
and protection of whistleblowers
ESRS G1-2, par. 15 a	Sustainability Statement 2025: "S2-4 - Taking action on material impacts on
Group approach to management of	value chain workers, and approaches to managing material risks and pursuing
relationships with suppliers and to risks in	material opportunities related to value chain workers, and effectiveness of
the supply chain	those actions"
ESRS G1-3, par. 18 a
Group approach to management of	Directors' Report: "Conflicts of interest and prevention of bribery and
relationships with suppliers and to risks in	corruption"
the supply chain
ESRS G1-3, par. 18 b, c

Independence of internal investigations and	Sustainability Statement 2025: "S1-3 - Processes to remediate negative impacts and channels for own workers to raise concerns"

List of datapoints in cross-cutting and topical standards that derive from other EU legislation

	Table 30 - List of datapoints in cross-cutting and topical standards that derive from other legislation
--	---------------------------------------------------------------------------------------------------------

Disclosure requirement and related datapoint	SFDR reference	Pillar 3 Reference	Benchmark Regulation Reference	Materia/N ot material	Page reference
ESRS 2 GOV-1 Board's gender diversity, paragraph 21(d)	Annex I, table 1, indicator no. 13		Delegated Regulation (EU) 2020/1816 of the Commission, Annex II	Material	67
ESRS 2 GOV-1 Percentage of board members who are independent, paragraph 21(e)			Delegated Regulation (EU) 2020/1816 of the Commission, Annex II	Material	67
ESRS 2 GOV-4 Statement on due diligence, paragraph 30	Annex I, table 3, indicator no. 10			Material	71
ESRS 2 SBM-1 Involvement in activities related to fossil fuel activities, paragraph 40(d)(i)	Annex I, table 1, indicator no. 4	Article 449a of Regulation (EU) no. 575/2013; Commission Implementing Regulation (EU) 2022/2453 table 1 - Qualitative disclosure on environmental risk and Table 2 - Qualitative disclosure on social risk	Delegated Regulation (EU) 2020/1816 of the Commission, Annex II	Not material
ESRS 2 SBM-1 Involvement in activities related to chemical production, paragraph 40(d)(ii) (d)(ii)	Annex I, table 2, indicator no. 9		Delegated Regulation (EU) 2020/1816 of the Commission, Annex II	Not material
ESRS 2 SBM-1 Involvement in activities related to controversial weapons, paragraph 40(d)(iii) (d)(iii)	Annex I, table 1, indicator no. 14		Article 12, paragraph 1 of Delegated Regulation (EU) 2020/1818 and Annex II of Delegated Regulation (EU) 2020/1816	Not material
ESRS 2 SBM-1 Involvement in			Article 12, paragraph 1	Not material

activities related to cultivation and production of tobacco, paragraph 40(d)(iv)			of Delegated Regulation (EU) 2020/1818 and Annex II of Delegated Regulation (EU) 2020/1816
ESRS E1-1 Transition plan to reach climate neutrality by 2050, paragraph 14				Article 2, paragraph 1 of Regulation (EU) 2021/1119	Material	104
ESRS E1-1 Undertakings excluded from Paris-aligned Benchmarks paragraph 16(g)		Article 449a of Regulation (EU) No. 575/2013; Commission Implementing Regulation (EU) 2022/2453, Template 1: Banking book - Climate change transition risk indicators: Credit quality of exposures by sector, emissions and residual maturity	Article 12(1)(d) to (g), and paragraph 2, of Delegated Regulation (EU) 2020/1818		Material	104
ESRS E1-4 GHG emission reduction targets, paragraph 34	Annex I, table 2, indicator no. 4	Article 449a of Regulation (EU) No. 575/2013; Commission Implementing Regulation (EU) 2022/2453, Template 3: Banking book - Climate change transition risk: alignment metrics	Article 6 of Delegated Regulation (EU) 2020/1818		Material	104
ESRS E1-5 Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors), paragraph 38	Annex I, table 1, indicator no. 5 and Annex I, table 2, indicator no. 5				Material	105
ESRS E1-5 Energy consumption and mix, paragraph 37	Annex I, table 1, indicator no. 5				Material	105
ESRS E1-5 Energy intensity associated with activities in high climate impact	Annex I, table 1, indicator no. 6				Material	106

sectors, paragraphs 40 to 43
ESRS E1-6 Gross Scope 1, 2, 3 and Total GHG emissions, paragraph 44	Annex I, table 1, indicators no. 1 and 2	Article 449a of Regulation (EU) No. 575/2013; Commission Implementing Regulation (EU) 2022/2453, Template 1: Banking book - Climate change transition risk indicators: Credit quality of exposures by sector, emissions and residual maturity	Article 5, paragraph 1, Article 6 and Article 8, paragraph 1 of Delegated Regulation (EU) 2020/1818		Material	107
ESRS E1-6 Gross GHG emissions intensity, paragraphs 53 to 55	Annex I, table 1, indicator no. 3	Article 449a of Regulation (EU) No. 575/2013; Commission Implementing Regulation (EU) 2022/2453, Template 3: Banking book - Climate change transition risk: alignment metrics	Article 8, paragraph 1 of Delegated Regulation (EU) 2020/1818		Material	107
ESRS E1-7 GHG removals and carbon credits, paragraph 56				Article 2, paragraph 1 of Regulation (EU) 2021/1119	Not material
ESRS E1-9 Exposure of the benchmark portfolio to climate-related physical risks, paragraph 66			Annex II of Delegated Regulation (EU) 2020/1818 and Annex II of Delegated Regulation (EU) 2020/1816		Material (Phase-in)
ESRS E1-9 Disaggregation of monetary amounts by acute and chronic physical risk, paragraph 66 (a) ESRS E1-9 Location of significant assets at material physical risk, paragraph 66(c)		Article 449a of Regulation (EU) No. 575/2013; paragraphs 46 and 47 of Commission Implementing Regulation (EU) 2022/2453; template 5: Banking book - Potential climate change			Material (Phase-in)

		transition risk indicators: exposures subject to physical risk
ESRS E1-9 Breakdown of the carrying value of its real estate assets by energy efficiency classes, paragraph 67(c)		Article 449a of Regulation (EU) No. 575/2013; Item 34 of Commission Implementing Regulation (EU) 2022/2453; Template 2: Banking book - Potential climate change transition risk indicators: loans collateralised by immovable property - Energy efficiency of the collateral		Material (Phase-in)
ESRS E1-9 Degree of exposure of the portfolio to climate-related opportunities, paragraph 69			Annex II of Delegated Regulation (EU) 2020/1818	Material (Phase-in)
ESRS E2-4 Amount of each pollutant listed in Annex II of the E-PRTR Regulation (European Pollutant Release and Transfer Register) emitted to air, water and soil, paragraph 28	Annex I, table 1, indicator no. 8; Annex I, table 2, indicator no. 2; Annex I, table 2, indicator no. 1; Annex I, table 2, indicator no. 3			Not material
ESRS E3-1 Water and marine resources, paragraph 9	Annex I, table 2, indicator no. 7			Material	112
ESRS E3-1 Dedicated policy, paragraph 13	Annex I, table 2, indicator no. 8			Material	112
ESRS E3-1 Sustainable oceans and seas paragraph 14	Annex I, table 2, indicator no. 12			Material	112
ESRS E3-4 Total water recycled and reused, paragraph 28(c)	Annex I, table 2, indicator no. 6.2			Material	112
ESRS E3-4 Total water	Annex I, table 2,			Material

consumption in m3 per net revenue on own operations, paragraph 29	indicator no. 6.1
ESRS 2 IRO-1 - E4 paragraph 16 a) i	Annex I, table 1, indicator no. 7		Not material
ESRS 2 IRO-1 - E4 paragraph 16(b)	Annex I, table 2, indicator no. 10		Not material
ESRS 2 IRO-1 - E4 paragraph 16 c)	Annex I, table 2, indicator no. 14		Not material
ESRS E4-2 Sustainable land/agriculture practices or policies, paragraph 24(b)	Annex I, table 2, indicator no. 11		Not material
ESRS E4-2 Sustainable oceans/seas practices or policies, paragraph 24(c)	Annex I, table 2, indicator no. 12		Not material
ESRS E4-2 Policies to address deforestation, paragraph 24(d)	Annex I, table 2, indicator no. 15		Not material
ESRS E5-5 Non recycled waste, paragraph 37(d)	Annex I, table 2, indicator no. 13		Material to the value chain	115
ESRS E5-5 Hazardous waste and radioactive waste, paragraph 39	Annex I, table 1, indicator no. 9		Material to the value chain	115
ESRS 2 - SBM3 - S1 Risk of incidents of forced labour, paragraph 14(f)	Annex I, table 3, indicator no. 13		Material	118
ESRS 2 - SBM3 - S1 Risk of incidents of child labour, paragraph 14(g)	Annex I, table 3, indicator no. 12		Material	118
ESRS S1-1 Human rights policy commitments, paragraph 20	Annex I, table 3, indicator no. 9 and Annex I, table 1, indicator no. 11		Material	118
ESRS S1-1 Due diligence policies on issues addressed by the fundamental		Delegated Regulation (EU) 2020/1816 of the	Material	119

International		Commission,
Labour Organization		Annex II
Conventions 1 to
8, paragraph 21 ESRS S1-1
Processes and	Annex I,
measures for preventing	table 3,		Material	119
trafficking in	indicator no. 11
human beings, paragraph 22
ESRS S1-1
Workplace	Annex I,
accident prevention policy	table 3,		Material	119
or management	indicator no. 1
system, paragraph 23
ESRS S1-3
Grievance/compla	Annex I, table 3,
ints handling mechanisms,	indicator		Material	120
paragraph 32(c)	no. 5
ESRS S1-14 Number of		Delegated
fatalities and	Annex I,	Regulation (EU)
number and rate	table 3,	2020/1816	Material	129
of work-related accidents,	indicator no. 2	of the
paragraph 88, (b)		Commission, Annex II
and (c) ESRS S1-14
Number of days	Annex I,
lost due to injuries, accidents,	table 3, indicator		Material	129
fatalities or illness,	no. 3
paragraph 88(e)
		Delegated Regulation
ESRS S1-16 Unadjusted gender	Annex I, table 1,	(EU)
pay gap,	indicator	2020/1816 of the	Material	127
paragraph 97(a)	no. 12	Commission,
		Annex II
ESRS S1-16 Excessive CEO pay	Annex I, table 3,
ratio, paragraph	indicator		Material	127
97(b) ESRS S1-17	no. 8 Annex I,
Incidents of	table 3,		Material	128
discrimination,	indicator
paragraph 103(a)	no. 7	Annex II of
	Annex I,	Delegated
ESR S1-17 Non respect of UNGPs	table 1, indicator	Regulation (EU)
on Business and	no. 10 and	2020/1816	Material	128
Human Rights and OECD, paragraph	Annex I, table 3,	and Article 12,
104(a)	indicator	paragraph 1
	no. 14	of Delegated
		Regulation

		(EU) 2020/1818
ESRS 2 SBM-3 - S2 Significant risk of child labour or forced labour in the value chain, paragraph 11(b)	Annex I, table 3, indicators no. 12 and 13		Material	131
ESRS S2-1 Human rights policy commitments, paragraph 17	Annex I, table 3, indicator no. 9 and Annex I, table 1, indicator no. 11		Material	131
ESRS S2-1 Policies related to value chain workers, paragraph 18	Annex I, table 3, indicators no. 11 and 4		Material	131
ESRS S2-1 Non respect of UNGPs on Business and Human Rights principles and OECD guidelines, paragraph 19	Annex I, table 1, indicator no. 10	Annex II of Delegated Regulation (EU) 2020/1816 and Article 12, paragraph 1 of Delegated Regulation (EU) 2020/1818	Material	132
ESRS S2-1 Due diligence policies on issues addressed by the fundamental International Labour Organization Conventions 1 to 8, paragraph 19		Delegated Regulation (EU) 2020/1816 of the Commission, Annex II	Material	132
ESRS S2-4 Human rights issues and incidents connected to its upstream and downstream value chain, paragraph 36	Annex I, table 3, indicator no. 14		Material	134
ESRS S3-1 Human rights policy commitments, paragraph 16	Annex I, table 3, indicator no. 9 and Annex I, table 1, indicator no. 11		Not material	135
ESRS S3-1 Non respect of UNGPs on Business and Human Rights, ILO principles or OECD	Annex I, table 1, indicator no. 10	Annex II of Delegated Regulation (EU) 2020/1816	Not material

guidelines, paragraph 17		and Article 12, paragraph 1 of Delegated Regulation (EU) 2020/1818
ESRS S3-4 Human rights issues and incidents, paragraph 36	Annex I, table 3, indicator no. 14		Not material
ESRS S4-1 Policies related to consumers and end-users, paragraph 16	Annex I, table 3, indicator no. 9 and Annex I, table 1, indicator no. 11		Material	135
ESRS S4-1 Non respect of UNGPs on Business and Human Rights principles and OECD guidelines, paragraph 17	Annex I, table 1, indicator no. 10	Annex II of Delegated Regulation (EU) 2020/1816 and Article 12, paragraph 1 of Delegated Regulation (EU) 2020/1818	Material	135
ESRS S4-4 Human Rights Issues and Incidents, paragraph 35	Annex I, table 3, indicator no. 14			138
ESRS G1-1 United Nations Convention against corruption, paragraph 10(b)	Annex I, table 3, indicator no. 15		Material	139
ESRS G1-1 Protection of whistleblowers, paragraph 10(d)	Annex I, table 3, indicator no. 6		Not material
ESRS G1-4 Fines for violation of anti-corruption and anti-bribery laws paragraph 24(a)	Annex I, table 3, indicator no. 17	Annex II of Delegated Regulation (EU) 2020/1816	Material	143
ESRS G1-4 Standards of anti corruption and anti-bribery, paragraph 24(b)	Annex I, table 3, indicator no. 16		Material	143

ATTACHMENT

ATTESTATION OF THE SUSTAINABILITY STATEMENT AS PER ARTICLE 81-TER, PARAGRAPH 1 OF CONSOB REGULATION NO. 11971 OF MAY 14, 1999 AND SUBSEQUENT AMENDMENTS AND SUPPLEMENTS

The undersigned Marco Daniele Boglione Executive Chairperson, Alessandro Boglione Chief Executive Officer and Marco Enrico, Executive Officer for Financial Reporting of BasicNet S.p.A. declare, pursuant to Article 154-bis, paragraph 5-ter, of Legislative Decree No. 58 of February 24, 1998, that the Sustainability Statement included in the Directors' Report has been prepared:

a) in accordance with the reporting standards applied pursuant to Directive 2013/34/EU of the European Parliament and of the Council of June 26, 2013, and Legislative Decree No. 125 of September 6, 2024;
b) with the specifications adopted under Article 8(4) of Regulation (EU) 2020/852 of the European Parliament and of the Council of June 18, 2020.

Marco Daniele Boglione Chairperson

Alessandro Boglione Marco Enrico

Chief Executive Officer Executive Officer for Financial Reporting

EY S.p.A. Via Giuseppe Giacosa, 38 10125 Torino

Tel: +39 011 5161611 Fax: +39 011 5612554 ey.com

Independent auditor's report on the limited assurance of the Consolidated Sustainability Reporting in accordance with Article 14 bis of Legislative Decree n. 39, dated 27 January 2010

(Translation from the original Italian text)

To the Shareholders of BasicNet S.p.A.

Conclusions

We have been appointed to perform a limited assurance engagement pursuant to Articles 8 and 18, paragraph 1 of Legislative Decree n. 125 dated 6 September 2024 (hereinafter also referred to as the "Decree") on the Consolidated Sustainability Reporting of BasicNet S.p.A. and its subsidiaries (hereinafter "Group" or "BasicNet Group") for the year ended on 31 December 2025, prepared in accordance with Article 4 of the Decree, included in the specific section of the Management Report.

Based on the procedures performed, nothing has come to our attention that causes us to believe that:

the BasicNet Group's Consolidated Sustainability Reporting for the year ended on 31 December 2025, has not been prepared, in all material aspects, in accordance with the reporting principles adopted by the European Commission pursuant to European Directive 2013/34/EU (European Sustainability Reporting Standards, hereinafter also referred to as "ESRS");
the information included in the paragraph "European Taxonomy" of the Consolidated Sustainability Reporting has not been prepared, in all material aspects, in accordance with Article 8 of European Regulation n. 852 dated 18 June 2020 (hereinafter also referred to as "Taxonomy Regulation").

Elements Underlying the Conclusions

We have performed a limited assurance engagement in accordance with the Sustainability Reporting Assurance Standard ("Principio di Attestazione della Rendicontazione di sostenibilità") – SSAE (Italy). The procedures performed in this type of engagement vary in nature and timing compared to those necessary for conducting an engagement aimed at obtaining a reasonable level of assurance and are also less extensive. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the level of assurance that would have been obtained if the engagement aimed to acquire a reasonable level of assurance. Our responsibilities under this Standard are further described in the section "Auditor's responsibility for the Assurance on the Consolidated Sustainability Reporting" of this report.

We are independent in accordance with the standards and principles regarding ethics and independence applicable to the assurance engagement of the Consolidated Sustainability Reporting according to Italian law.

Our audit firm applies the International Standard on Quality Control (ISQM Italy) 1, under which it is required to establish, implement, and operate a quality management system that includes instructions and procedures on compliance with ethical principles, professional principles, and applicable legal and regulatory provisions.

We believe we have obtained sufficient and appropriate evidence on which to base our conclusions.

Responsibility of the Directors and Those Charged with Governance for the Consolidated Sustainability Reporting

The Directors are responsible for the development and implementation of procedures used to identify the information included in the Consolidated Sustainability Reporting in accordance with the requirements of the ESRS (hereinafter referred to as the "Relevance assessment process") and for the description of such procedures in the paragraph "The Group's Double Materiality Assessment" of the Consolidated Sustainability Reporting.

The Directors are also responsible for the preparation of the Consolidated Sustainability Reporting, which contains the information identified through the Relevance assessment process, in accordance with the requirements of Article 4 of the Decree, including:

compliance with the ESRS;
compliance with Article 8 of the EU Taxonomy Regulation regarding the information contained in the paragraph "European Taxonomy".

This responsibility entails the establishment, implementation, and maintenance, as required by law, for that part of internal control that they consider necessary in order to allow the preparation of the Consolidated Sustainability Reporting in accordance with the requirements of Article 4 of the Decree, free from material misstatements caused by fraud or not intentional behaviors or events. This responsibility also includes the selection and application of appropriate methods for processing the information as well as the development of assumptions and estimates regarding specific sustainability information that are reasonable under the circumstances.

The statutory audit committee ("Collegio Sindacale") is responsible, within the terms provided by the law, for overseeing the compliance with the requirements of the Decree.

Intrinsic Limitations in the Preparation of the Consolidated Sustainability Reporting

As indicated in the paragraph "Methodological Note" for the purpose of reporting prospective information in accordance with the ESRS, the Directors are required to prepare such information based on assumptions, described in the Consolidated Sustainability Reporting, regarding events that may occur in the future and possible future actions by the Group. Due to the uncertainty associated with the realization of any future events, both concerning the occurrence itself and regarding the extent and timing of its occurrence, the variations between actual values and prospective information could be significant.

As indicated in the paragraph "ESRS E1 – Climate Change", the information related to Scope 3 greenhouse gas emissions is subject to greater intrinsic limitations compared to Scope 1 and 2, due to the limited availability and accuracy of the information used to define such information, both quantitative and qualitative.

Auditor's responsibility for the Assurance of the Consolidated Sustainability Reporting

Our objectives are to plan and perform procedures to obtain a limited level of assurance that the Consolidated Sustainability Reporting is free from material misstatements, due to fraud or not

intentional behaviors or events, and to issue a report containing our conclusions. Errors may arise from fraud or not intentional behaviors or events and are considered significant if it can be reasonably expected that they, individually or in the aggregate, could influence the decisions made by users based on the Consolidated Sustainability Reporting.

In the context of the engagement aimed at obtaining a limited level of assurance in accordance with the Sustainability Reporting Assurance Standard ("Principio di Attestazione della Rendicontazione di Sostenibilità") – SSAE (Italy), we exercised professional judgment and maintained professional skepticism throughout the duration of the engagement.

Our responsibilities include:

considering the risks to identify the information in which a significant error is likely to occur, whether due to fraud or not intentional behaviors or events;
defining and performing procedures to verify the information in which a significant error is likely to occur. The risk of not detecting a significant error due to fraud is higher than the risk of not detecting a significant error arising from not intentional behaviors or events, as fraud may involve collusion, forgery, intentional omissions, misleading representations, or manipulation of internal controls;
directing, supervising, and conducting the limited assurance of the Consolidated Sustainability Reporting and assuming full responsibility for the conclusions regarding the Consolidated Sustainability Reporting.

Summary of the Work Performed

An engagement aimed at obtaining a limited level of assurance involves performing procedures to obtain evidence as a basis for formulating our conclusions.

The procedures performed on the Consolidated Sustainability Reporting were based on our professional judgment and included interviews, primarily with the company personnel responsible for preparing the information included in the Consolidated Sustainability Reporting, as well as documents analysis, recalculations and other procedures aimed to obtain evidence considered appropriate.

In particular, we performed the following procedures, partly in a preliminary phase before the end of the year and subsequently in a final phase up to the date of issuance of this report:

understanding the business model, the Group's strategies, and the context in which it operates concerning sustainability issues;
understanding the processes underlying the generation, detection, and management of the qualitative and quantitative information included in the Consolidated Sustainability Reporting, including the analysis of the reporting perimeter;
understanding the process implemented by the Group for identifying and assessing relevant impacts, risks, and opportunities based on the principle of Double Materiality concerning sustainability issues and verifying the related information included in the Consolidated Sustainability Reporting;
identifying the information for which there is a likelihood of a significant error risk;
defining and performing analytical and substantive procedures, based on our professional judgment, to address the identified significant error risks, including:
for the information collected at the Group level:

carrying out inquiries and document analysis regarding qualitative information, particularly policies, actions, and targets on sustainability issues, to verify consistency with the evidence collected;
performing analytical procedures and limited assurance procedures on a sample basis regarding quantitative information;
for the information collected at site level, conducting on-site visits for BasicNet S.p.A. (K-Way France and K-Way Retail S.p.A.). These sites were selected based on their activities and their relevance to the metrics of the Consolidated Sustainability Reporting. During these visits, we conducted interviews with Group personnel and obtained documentary evidence regarding the determination of the metrics;
regarding the requirements of Article 8 of the EU Taxonomy Regulation, understanding the process implemented by the Group to identify eligible economic activities and determine their aligned nature based on the provisions of the EU Taxonomy Regulation, and verifying the related information included in the Consolidated Sustainability Reporting;
cross-checking the information reported in the Consolidated Sustainability Reporting with the information contained in the consolidated financial statements in accordance with the applicable financial reporting framework or with the accounting data used for the preparation of the consolidated financial statements or with the management data of an accounting nature;
verifying the structure and presentation of the information included in the Consolidated Sustainability Reporting in accordance with the ESRS;
obtaining letter of representations.

Turin, 26 March 2026

EY S.p.A. Signed by: Massimiliano Vercellotti, Auditor

This independent auditor's report has been translated into the English language solely for the convenience of international readers. Accordingly, only the original text in Italian language is authoritative.

FINANCIAL STATEMENTS AND

EXPLANATORY NOTES OF THE BASICNET GROUP

AT DECEMBER 31, 2025

CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES

In accordance with Consob Resolution No. 15519 of July 27, 2006 the transactions with related parties are described at Note 49.

BASICNET GROUP CONSOLIDATED INCOME STATEMENT

(Euro thousands)	Note	FY 2025		FY 2024			Changes
			%		%		%
Consolidated direct sales Cost of sales	(8) (9)	348,282 (185,023)	100.00 (53.12)	346,802 (194,145)	100.00 (55.98)	1,480 9,122	0.43 4.70
GROSS MARGIN		163,260	46.88	152,657	44.02	10,602	6.95
Royalties and sourcing commissions	(10)	66,431	19.07	60,882	17.56	5,549	9.11
Other income	(11)	7,909	2.27	17,622	5.08	(9,713)	(55.12)
Sponsorship and media costs	(12)	(47,340)	(13.59)	(43,618)	(12.58)	(3,722)	(8.53)
Personnel costs	(13)	(58,513)	(16.80)	(49,151)	(14.17)	(9,362)	(19.05)
Selling, general and administrative costs,
royalties expenses	(14)	(102,428)	(29.41)	(77,323)	(22.30)	(25,105)	(32.47)
Amortization and depreciation	(15)	(23,348)	(6.70)	(18,927)	(5.46)	(4,421)	(23.36)
EBIT		5,972	1.71	42,143	12.15	(36,171)	(85.83)
Net financial income (charges)	(16)	(3,338)	(0.96)	(5,421)	(1.56)	2,084	38.44
Management of equity investments	(17)	(1,897)	(0.54)	(7)	0.00	(1,890)	N.A.
PROFIT BEFORE TAXES		738	0.21	36,715	10.59	(35,977)	(97.99)
Income taxes	(18)	(8,448)	(2.43)	(11,451)	(3.30)	3,002	26.22
NET PROFIT/(LOSS) FOR THE YEAR		(7,711)	(2.21)	25,264	7.28	(32,975)	(130.52)

Attributable to:
- Shareholders of the company		(12,143)	(3.49)	-	0.00	(12,143)	N.A.
- Minority shareholders		4,432	1.27	-	0.00	4,432	N.A.
Earnings per share:	(19)
basic diluted		(0.1661) (0.1654)		0.5354 0.5354		(0.702) (0.701)	(131.03) (130.89)

CONSOLIDATED COMPREHENSIVE INCOME STATEMENT

(Euro thousands)	Note	December 31, 2025	December 31, 2024	Changes
Profit(loss) for the period (A)		(7,711)	25,264	(32,975)
Profit/(loss) from previous years (B)		-	-	-
Effective portion of the gains/(losses) on cash flow hedges		(6,030)	1,366	(7,396)
Effective part of the Gains/(losses) on cash flow instruments generated in the year ("interest rate hedges")		(114)	(234)	121
Effective portion of the gains/(losses) on cash flow hedges		(6,143)	1,132	(7,275)
Remeasurement of the agents indemnity provision (IAS 37) (*)		(217)	267	(484)
Re-measurement of post-employment benefits (IAS 19) (*)		15	(156)	171
Gains/(losses) recorded directly to Stock Grant reserve (IFRS 2)		554	-	554
Gains/losses from translation of accounts of foreign subsidiaries		(598)	1,241	(1,839)
Tax effect on other profits/(losses)		1,362	(349)	1,711
Total other gains/(losses), net of tax effect (C)	(33)	(5,028)	2,134	(7,162)
Total Comprehensive Profit (A)+(B)+(C)		(12,739)	27,398	(40,137)

(*) items which may not be reclassified to the profit and loss account

BASICNET GROUP CONSOLIDATED BALANCE SHEET

(Euro thousands)	Note	December 31, 2025	December 31, 2024
Intangible assets	(20)	117,498	71,834
Rights-of-use	(21)	100,191	41,871
Goodwill	(22)	107,947	43,719
Property, plant and equipment	(23)	62,386	56,763
Equity invest. & other financial assets	(24)	55,728	1,980
Interests in joint ventures	(25)	-	175
Deferred tax assets	(26)	25,693	6,008
Total non-current assets		469,443	222,350
Net inventories	(27)	159,629	108,357
Trade receivables	(28)	88,779	84,073
Other current assets	(29)	61,407	10,985
Prepayments	(30)	19,676	10,645
Cash and cash equivalents	(31)	51,138	28,195
Derivative financial instruments	(32)	105	3,101
Total current assets		380,733	245,356

TOTAL ASSETS 850,176 467,706

850,176
---------	--

(Euro thousands)	Note	December 31, 2025	December 31, 2024
Share capital		31,717	31,717
Reserve for treasury shares in portfolio		(32,000)	(30,861)
Other reserves		330,138	144,226
Net Profit		(7,711)	25,264
TOTAL SHAREHOLDERS' EQUITY	(33)	322,144	170,346
of which MINORITY INTEREST SHAREHOLDERS' EQUITY	(33)	44,025	-
Provisions for risks and charges	(34)	5,790	2,440
Loans	(35)	78,233	28,206
Payables for rights-of-use	(37)	102,597	43,080
Other financial payables	(38)	7,000	6,432
Employee and Director benefits	(39)	6,280	4,443
Deferred tax liabilities	(40)	14,793	9,507
Other non-current liabilities	(41)	1,784	1,684
Total non-current liabilities		216,477	95,791
Bank payables	(36)	137,418	90,780
Trade payables	(42)	116,560	82,294
Tax payables	(43)	12,422	5,254
Other current liabilities	(44)	30,804	14,546
Accrued expenses	(45)	10,100	8,648
Derivative financial instruments	(46)	4,251	48
Total current liabilities		311,555	201,569
TOTAL LIABILITIES		528,032	297,360
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY		850,176	467,706

CONSOLIDATED CASH FLOW STATEMENT OF THE BASICNET GROUP

	December 31, 2025	December 31, 2024
A) OPENING SHORT-TERM NET BANK DEBT	(51,370)	(39,059)
B) CASH FLOW FROM OPERATING ACTIVITIES
Net profit (loss)	(7,711)	25,264
Amortisation and depreciation	23,348	18,927
Management of equity investments	1,897	7
Changes in working capital:
(Increase) decrease in trade receivables	18,304	(7,743)
(Increase) decrease in inventories	(13,770)	3,883
(Increase) decrease in other receivables	(14,428)	6,696
. Increase (decrease) in trade payables	(94)	5,335
. Increase (decrease) in other payables	6,790	(3,879)
Net changes in employee and director benefits	(1,170)	573
Others, net	600	122
	13,766	49,184
C) CASH FLOW FROM INVESTING ACTIVITIES
Investments in fixed assets:
- tangible assets	(10,593)	(6,985)
- intangible assets	(3,642)	(7,841)
- financial assets	(3,762)	(1,017)
- acquisition K-Way Normandy franchisee	(2,070)	-
- acquisition K-Way France	(1,649)	(1,657)
- acquisition Woolrich	(36,101)	-
- acquisition Sundek	(10,105)	-
- acquisition Sebago France	(4,475)	-
Realisable value for fixed asset disposals:
- tangible assets	-	-
- intangible assets	579	809
- financial assets Financial investments – Medium to long-term	- (50,100)	- -
	(121,917)	(16,691)
D) CASH FLOW FROM FINANCING ACTIVITIES
New medium/long term loans	80,000	206
Loan repayments	(83,894)	(14,330)
Repayment of loans for rights-of-use	(11,429)	(8,841)
Sale of 40% of the stake in K-Way S.p.A.
	170,389	-
Acquisition of treasury shares	(14,432)	(14,419)
Dividend payments	(7,449)	(7,421)
	133,185	(44,803)
E) CASH FLOW IN THE YEAR	25,035	(12,311)
F) CLOSING SHORT-TERM NET BANK DEBT	(26,335)	(51,370)

Interest paid for the year amounts to respectively Euro 3.0 million in 2025 and Euro 3.9 million in 2024, while income taxes paid in the year amount respectively to Euro 5.5 million in 2025 and Euro 3.4 million in 2024.

STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY

					Reserves
(Euro thousands)	Share Capital	Treas. shares	Reserves & Retained earnings	Translati on reserve	Remeasure. reserve IAS 19	IAS37 Reserve	IFRS 2 Reserve	Cash flow hedge reserve	Result	Total shareholders ' equity
December 31, 2023	31,717	(16,442)	123,068	1,245	134	188	-	503	24,376	164,787
Allocation of result as per Shareholders' AGM resolution of 16/04/2024
- Reserves & Retained earnings - Dividends distributed		- -	16,955 -	- -	- -	- -	- -	- -	(16,955) (7,421)	- (7,421)
Acquisition of treasury shares		(14,419)	-	-	-	-	- -	-	-	(14,419)
2024 Result		-	-	-	-	-	-	-	25,264	25,264
Other comprehensive income items: - Gains/(losses) recorded directly to translation reserve		-	-	1,241	-	-	-	-	-	1,241
- Gains/(losses) recorded directly to equity for IAS 19 re-measurement		-	-	-	(119)	-	-	-	-	(119)
- Gains/(losses) recorded directly to cash flow hedge reserve		-	-	-	-	-	-	809	-	809
- Gains/(losses) recorded directly to IAS 37 reserve		-	-	-	-	203	-	-	-	203
Total comprehensive income		-	-	1,241	(119)	203	-	809	25,264	27,398
December 31, 2024	31,717	(30,861)	140,022	2,486	15	391	-	1,312	25,264	170,346
Allocation of result as per Shareholders' AGM resolution of April 17, 2025
- Reserves & Retained earnings - Dividends distributed		- -	17,814 -	- -	- -	- -	- -	- -	(17,814) (7,450)	- (7,450)
Acquisition of treasury shares		(14,432)	-	-	-	-	-	-	-	(14,432)
Sale of treasury shares		13,294	-	-	-	-	-	-	-	13,294
2025 Result		-	-	-	-	-	-	-	(7,711)	(7,711)
Gain (loss) recognised directly to reserves for contribution from the sale of 40% of the stake in K-Way S.p.A.		-	173,124	-	-	-	-	-	-	173,124
Other comprehensive income items:
- Gains/(losses) recorded directly to translation reserve		-	-	(598)	-	-	-	-	-	(598)
- Gains/(losses) recorded directly to equity for IAS 19 re-measurement		-	-	-	11	-	-	-	-	11
- Gains/(losses) recorded directly to cash flow hedge reserve		-	-	-	-	-	-	(4,830)	-	(4,830)
- Gains/(losses) recorded directly to IFRS 37 reserve		-	-	-	-	(165)	-	-	-	(165)
- Gains/(losses) recorded directly to IFRS 2 reserve		-	-	-	-	-	554	-	-	554
Total comprehensive income		-	-	(598)	11	(165)	554	(4,830)	(7,711)	(12,739)
December 31, 2025	31,717	(32,000)	330,961	1,888	26	226	554	(3,518)	(7,711)	322,144

CONSOLIDATED NET FINANCIAL POSITION

(Euro thousands)	December 31, 2025	December 31, 2024

Cash and cash equivalents	51,138	28,196
Current financial investments	40,000	-
Bank overdrafts and bills	(91,208)	(50,838)
Import advances	(26,266)	(28,729)
Sub-total net liquidity available	(26,335)	(51,370)
Short-term portion of medium/long-term loans	(19,944)	(11,214)
Payables for the purchase of equity investments	(1,178)	(1,649)
Short-term net financial position	(47,457)	(64,234)

Financial investments – Medium to long-term	50,100	-
Medium/long term loans	(78,056)	(27,922)
Payables for rights-of-use	(102,597)	(43,080)
Payables for purchase of equity investments beyond one year	(12,798)	(6,432)
Finance lease payables	(177)	(284)
Sub-total loans and leasing	(143,528)	(77,718)
Consolidated Net Financial Position	(190,985)	(141,952)

The following table shows the composition of the Group's net debt as of December 31, 2025 and December 31, 2024, determined in accordance with the "Guidelines on disclosure requirements under the Prospectus Regulation" issued by ESMA (European Securities & Markets Authority) on March 4, 2021 (ESMA32-382-1138) and implemented by Consob with Attention Reminder No. 5/21 of April 29, 2021.

	(Euro thousands)	December 31,	December 31,
		2025	2024
A.	Cash	384	138
B.	Other cash equivalents	50,754	28,057
C.	Securities held for trading	-	-
D.	Cash & cash equivalents (A)+(B)+(C)	51,138	28,196
E.	Current financial receivables	40,000	-
F.	Current bank payables	(118,652)	(81,216)
G.	Current portion of non-current debt	(19,944)	(11,214)
H.	Other current financial payables	-	-
I.	Current financial debt (F)+(G)+(H)	(138,596)	(92,430)
J.	Net current financial debt (I)-(E)-(D)	(47,457)	(64,234)
K.	Non-current bank payables	(193,628)	(77,718)
L.	Bonds issued	-	-
M.	Other non-current financial payables	(4,146)	3,053
N.	Trade payables and other non-current payables	-	-
O.	Non-current financial debt (K) + (L) + (M) + (N)	(197,774)	(74,664)
P.	Net financial debt (J) + (O)	(245,231)	(138,898)

The net financial debt differs from the consolidated net financial position for the fair value of the interest and currency hedging operations - cash flow hedges (Note 32) and for the amount of financial investments whose natural maturity is beyond one year (Note 24).

CHANGES IN NET FINANCIAL POSITION

(Euro thousands)	December 31, 2025	December 31, 2024
A) OPENING NET FINANCIAL POSITION	(141,952)	(139,119)
B) CASH FLOW FROM OPERATING ACTIVITIES
Net profit (loss)	(7,711)	25,264
Amortisation and depreciation	23,348	18,927
Management of equity investments	1,897	7
Changes in working capital	(2,308)	4,291
Net changes in employee and director benefits	(1,170)	573
Others, net	(290)	122
	13,766	49,184
C) CASH FLOW FROM INVESTING ACTIVITIES
Fixed asset investments	(14,235)	(14,826)
Acquisition K-Way Normandy franchisee	(3,337)	-
Acquisition K-Way France franchisee	1,178	-
Acquisition of Woolrich	(122,257)	-
Acquisition of Sundek	(36,184)	-
Acquisition of Sebago France	(8,227)	-
Acquisition of financial assets	(3,762)	(1,017)
Realisable value for fixed asset disposals	579	809
	(186,243)	(15,035)
D) CASH FLOW FROM FINANCING ACTIVITIES
Registration payables for Right-of-use	(25,064)	(15,143)
Sale of 40% of the stake in K-Way S.p.A.	170,389	-
Acquisition of treasury shares	(14,432)	(14,419)
Dividend payments	(7,449)	(7,421)
	123,444	(36,982)
E) CASH FLOW IN THE YEAR	(49,033)	(2,832)
F) CLOSING NET FINANCIAL POSITION	(190,985)	(141,952)

EXPLANATORY NOTES

1. GENERAL INFORMATION

BasicNet S.p.A. – with registered office in Turin (Italy), Largo Maurizio Vitale 1, listed on the Italian Stock Exchange since November 17, 1999 and its subsidiaries, operate in the sports and casual clothing, footwear and accessories sector through the brands Kappa, Robe di Kappa, Jesus Jeans, K-Way, Superga, Briko, Sebago Woolrich and Sundek. Group activities involve the development of the value of the brands and the distribution of their products through a global network of independent licensees.

The duration of BasicNet S.p.A. is fixed by the company by-laws until December 31, 2050.

The publication of the consolidated financial statements of BasicNet as at December 31, 2025 was approved by the Board of Directors on March 11, 2026.

2. FORM AND CONTENT

The main accounting principles adopted in the preparation of the consolidated financial statements and Group financial reporting are described below.

This document has been prepared in accordance with IFRS issued by the International Accounting Standards Board (IASB) and approved by the European Union. IFRS include all the revised international accounting standards (IAS) and all interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"), previously known as the Standing Interpretations Committee ("SIC").

The financial statements are prepared under the historical cost convention (modified where applicable for the valuation of certain financial instruments), as well as on the going concern assumption.

The Group consolidated financial statements include the financial statements at December 31, 2025 of BasicNet S.p.A. and all the Italian and foreign companies in which the Parent Company holds control - directly or indirectly. For the financial statements of the US, Asian, Spanish, English, Swiss and French subsidiaries, which utilise local accounting standards, as not obliged to adopt IAS/IFRS, the appropriate adjustments were made for the preparation of the consolidated financial statements in accordance with international accounting standards.

The accounting policies utilised for the preparation of the Consolidated Financial Statements at December 31, 2025 are the same as those utilised for the previous year, with the exception of the adoption of new standards and amendments from January 1, 2025. The Group has not adopted in advance any accounting standard, interpretation or amendment issued but not yet in effect.

Accounting standards, amendments and interpretations issued but not yet in force

The standards and interpretations which at the date of the preparation of the Group consolidated financial statements were issued but not yet in force are reported below. The Group will adopt these standards when they enter into force, if applicable.

IFRS 18 Presentation and Disclosure in Financial Statements

In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new requirements for the presentation of the income statement, including specific totals and subtotals. Additionally, entities will need to classify all expenses and revenues within the income statement within four categories: operating, investing, financing, income tax, and discontinued operations. The first three categories are new.

The standard also requires disclosures based on the new definition of management-defined performance indicators (MPMs), subtotals of costs and revenues, and includes new provisions for aggregating and disaggregating financial information based on the identified roles of Primary Financial Statements (PFS) and the notes.

In addition, changes have been made to IAS 7 Statement of Cash Flows, which include changing the starting point for determining cash flows from operations based on the indirect method; from profit or loss to operating profit or loss and removing the option to classify cash flows from dividends and interest. Additionally, consequential changes were made to multiple other accounting standards.

IFRS 18, and amendments to other standards, are effective for fiscal years beginning on or after 1 January 2027, but early application is permitted subject to disclosure. IFRS 18 will apply retrospectively.

The Group is currently working to identify the impacts that the changes will have on its financial statements and notes to the financial statements.

IFRS 19 Subsidiaries without Public Accountability: Disclosures

In May 2024, the IASB issued IFRS 19, which allows eligible entities to opt for a reduction in their disclosure requirements while continuing to apply the recognition, measurement and presentation requirements in the other IFRS accounting standards. To be eligible, at the end of the fiscal year, an entity must be a subsidiary as defined within IFRS 19, may not have "public accountability" and must have a parent (ultimate or interim) that prepares consolidated financial statements, available to the public, prepared in accordance with IFRS accounting standards.

IFRS 19 will become effective for fiscal years beginning on or after 1 January 2027, with early application possible.

Amendments to the Classification and Measurement of Financial Instruments—Amendments to IFRS 9 and IFRS 7

In May 2024, the IASB issued amendments to IFRS 9 and IFRS 7, called Amendments to the Classification and Measurement of Financial Instruments (the "Amendments"). The Amendments include:

a clarification that a financial liability is written off on the "settlement date" and the introduction of an accounting policy choice (where specific conditions are met) to cancel financial liabilities settled through electronic payment systems before the settlement date;
additional guidance on how to evaluate contractual cash flows for financial assets with environmental, social and governance (ESG) characteristics or similar;
clarification of the characteristics of a "non-recourse" instrument (non-recourse feature) and on the characteristics of contractually linked instruments;
the introduction of disclosure requirements for financial instruments with contingent characteristics and additional disclosure requirements for equity instruments classified at fair value through comprehensive income (OCI).

The Amendments are effective for annual periods beginning on or after January 1, 2026, with early adoption permitted only for the classification of financial assets and related disclosures.

The Group does not expect the changes to have a significant effect on the consolidated financial statements.

Annual Improvements to IFRS Accounting Standards - Volume 11

In December 2024, the IASB issued amendments to IFRS 9 and IFRS 7, Contracts Referencing Naturedependent Electricity. The amendments apply only to contracts that refer to that type of electricity and:

clarify the application of own-use requirements for contracts within the scope;
change the requirements for designating a hedged item in a cash flow hedging relationship for these contracts;
introduce new disclosure requirements to enable investors to understand the effects of such contracts on a company's financial performance and cash flows.

The amendments will be effective for fiscal years beginning on or after January 1, 2026. Early adoption is permitted, although adequate disclosure must be given.

The amendments related to the own-use exception should be applied retrospectively, while those in hedge accounting should be applied prospectively to new hedging relationships designated as of the date of first application. In addition, the disclosure changes in IFRS 7 must be implemented in conjunction with the changes to IFRS 9. In the event that an entity does not restate the comparative information, it may not submit comparative disclosures.

The Group does not expect these amendments to have a significant impact on its consolidated financial statements.

3. FORMAT OF THE FINANCIAL STATEMENTS

The BasicNet Group presents its income statement by nature of cost items; the assets and liabilities are classified as current or non-current. The statement of cash flows was prepared applying the indirect method. The format of the consolidated financial statements applied the provisions of Consob Resolution No. 15519 of July 27, 2006 and Notice No. 6064293 of July 28, 2006 on financial disclosure requirements. With reference to Consob Motion No. 15519 of July 27, 2006, transactions with related parties are described in Note 49 of the consolidated financial statements.

4. CONSOLIDATION PRINCIPLES

The consolidated financial statements were prepared including the financial statements at December 31, 2025 of the Group companies included in the consolidation scope, appropriately adjusted in accordance with the accounting principles adopted by the Parent Company.

The consolidated financial statements of the BasicNet Group are presented in Euro thousands, where not otherwise stated; the Euro is the functional currency of the Parent Company and the majority of the consolidated companies.

Financial statements in currencies other than the Euro are translated into the Euro applying the average exchange rate for the year for the income statement and the exchange rate at the date of the operation in the case of significant non-recurring transactions. The balance sheet accounts are translated at the year-end exchange rate. The differences arising from the translation into Euro of the financial statements prepared in currencies other than the Euro are recorded in a specific reserve in the Comprehensive Income Statement.

Currency		FY 2025	FY 2024
	Average	At year end	Average	At year end
US Dollar	1.1314	1.1750	1.0808	1.0389
HK Dollar	8.8217	9.1464	8.4315	8.0686
Japanese Yen	169.5133	184.0900	164.0558	163.0600
UK Sterling	0.8567	0.8726	0.8450	0.8292
Swiss Franc	0.9366	0.9314	0.9534	0.9412
Vietnamese Dong	29,460	30,883	27,103	26,478

The exchange rates applied are as follows (for 1 Euro):

The criteria adopted for the consolidation were as follows:

a) the assets and liabilities, as well as the income and charges of the financial statements consolidated under the line-by-line method are included in the financial statements of the Group, without consideration of the holding in the subsidiary. The carrying value of the investments are eliminated against the relative net equity of the subsidiaries.
b) the positive differences resulting from the elimination of the investments against the book net equity at the acquisition date is allocated to the higher values attributed to the assets and liabilities acquired, and the residual part to goodwill. On the first-time adoption of IFRS, the Group has chosen not to apply IFRS 3 - Business combinations in retrospective manner for the acquisitions made prior to January 1, 2004;
c) the payables/receivables, costs/revenues between consolidated companies and the gains/losses resulting from inter-company operations are eliminated, as are the effects of mergers and the sale of business units between companies in the consolidation scope.

As illustrated in Attachment 2, at December 31, 2025 the Group is comprised solely of subsidiaries owned directly or indirectly by the Parent Company BasicNet S.p.A., or jointly controlled; there are no associated companies or investments in structured entities.

Control exists where the Parent Company BasicNet S.p.A. simultaneously:

exercises decision-making power over the investee, i.e. has the capacity to manage its main activities, therefore those activities which have a significant impact on the investee's results;

has the right to variable profits or losses from its investment in the entity;
has the capacity to utilise its decision-making power to establish the amount of profits devolving from its investment in the entity.

The existence of control is verified where events or circumstances indicate an alteration to one or more of the three factors determining control.

Investments in associates and joint ventures are consolidated at equity, as established respectively by IAS 28 - Investments in associates and joint ventures and by IFRS 11 – Joint arrangements.

An associate is a company in which the Group holds at least 20% of voting rights or exercises significant influence - however not control or joint control - on the financial and operational policies. A joint venture is a joint control agreement, in which the parties who jointly hold control maintain rights on the net assets of the entity. Joint control concerns the sharing, under an agreement, of the control of economic activities, which exists only where the decisions regarding such activities requires unanimity by all parties sharing control.

Associates and joint ventures are consolidated from the date in which significant influence or joint control begins and until the discontinuation of such. Under the equity method, the investment in an associated company or a joint venture is initially recognised at cost and subsequently the carrying amount is increased or decreased to recognise the associated company's share of the profit or loss after the date of acquisition. The share of profits (losses) of the investment is recognised to the consolidated income statements. Dividends received from the investee reduce the book value of the investment.

If the share of losses of an entity in an associate or a joint venture is equal to or greater than its interest in the associate or joint venture the entity discontinues the recognition of its share of further losses. After the investor's interest is reduced to zero, additional losses are provisioned and a liability is recognised, only to the extent that the investor has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. If the associate or the joint venture subsequently reports profits, the investor resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised.

Consolidation scope

The consolidation scope includes the Parent company BasicNet S.p.A. and the Italian and foreign subsidiaries in which BasicNet S.p.A. exercises direct, or indirect, control. Attachment 2 contains a list of consolidated companies under the line-by-line method, as well as the complete list of Group companies, registered office, corporate purpose, share capital and direct and indirect holdings.

Information by business segment and geographic area

Two operating segments have been identified within the BasicNet Group: i) apparel, footwear and accessories and ii) real estate. The relevant information is reported in Note 7.

The information by geographic area has significance for the Group in relation to royalty income and direct sales, and therefore was included for the two respective items. The breakdown of licensee aggregate sales by geographic area, from which the royalties derive, is reported in the Directors' Report.

5. ACCOUNTING POLICIES

The present financial statements were prepared on the going concern basis, and in accordance with the accruals principle.

The main accounting policies adopted for the preparation of the consolidated financial statements at December 31, 2025, in line with those utilised in the previous year, are disclosed below.

Revenue recognition

Revenues derive from Group operations in the ordinary course of business and comprise revenues from sales and services. Revenues are recognised net of sales tax, returns and discounts.

Revenues from contracts with customers rare recognised when the control of the goods and services is transferred to the client for an amount which reflects the consideration that the Group expects to receive in exchange for these goods and services. The Group has concluded that generally it acts as the Principal for the agreements from which it receives revenues, as usually it controls the goods and services before their transfer to the customer. In calculating the sales transaction price for goods, the Group considers the effects from variable fees, significant financial components and non-monetary fees. Where the fee concluded in the contract includes a variable amount, such as that connected to a right of return, the Group estimates the amount of the fee to which it will be entitled in exchange for the transfer of the goods to the customer.

Sales to Group brand stores managed by third parties, on consignment, are recognised on the sale of the goods by the store to the final consumer, in accordance with IFRS 15.

Royalties and sourcing commissions, including the minimum guaranteed component, are recognised on an accruals basis in accordance with the underlying contracts and consistent with the state of advancement of the sales or the production of the licensees.

Recognition of costs and expenses

Costs and expenses are recognised in accordance with the accruals principle.

Costs associated with sponsorship contracts paid each year are recognised in line with the contractual conditions.

Advertising campaign costs undertaken to drive orders by the salesforce, in accordance with current interpretations of IAS/IFRS, are directly expensed at the moment of the campaign, rather than in correlation to the relative revenues, which will only be recognised on the subsequent shipment of the orders received.

Interest income and expenses, and income and charges

Interest income and expenses and other income and charges are recorded and shown in the financial statements on the accrual basis.

In accordance with IAS 23 – Borrowing costs, the financial charges directly attributable to the purchase, construction and production of the asset which requires a significant amount of time before use or sale are capitalised together with the value of the asset. Such an event has not arisen up to the present moment for the Group. If these conditions are not met the financial charges are expensed directly to the income statement.

Translation of balances in foreign currencies

The receivables and payables originally expressed in foreign currencies are translated into Euro at the exchange rate when the transaction originated. Exchange differences arising on collections and payments in foreign currencies are recorded in the income statement.

Revenues and income, costs and charges related to currency transactions are recorded at the exchange rate at the transaction date.

At the end of the period, the assets and liabilities valued in foreign currencies, with the exception of fixed assets, are recorded at the exchange rates at the balance sheet date and the relative gains or losses on exchange are recorded in the income statement.

Income taxes

Current income taxes include all the taxes calculated on the assessable income of the Group. Income taxes are recognised in profit and loss, except where they relate to items charged or credited directly to equity, in which case the tax effect is also recognised directly in equity.

Other taxes not related to income, such as taxes on property and share capital, are included under operating charges.

Deferred taxes are calculated on all the temporary differences arising between the assessable income of an asset or liability and the relative book value in the consolidated financial statements. Deferred tax assets, including those relating to losses carried forward, for the portion not offset by deferred tax liabilities, are recognised only for those amounts for which it is probable there will be future assessable income to recover the amounts. Deferred tax assets and liabilities are determined with the tax rates that are expected to be applied, in accordance with the regulations of the countries in which the Group operates, in the years in which the temporary differences will be realised or settled. The deferred tax assets and liabilities are offset when the income tax is applied by the same fiscal authority and when there is a legal right of compensation.

The Parent Company adhered to the tax consolidation in accordance with Article 117 and thereafter of the CFA – Presidential Decree No. 917 of December 22, 1986 together with all of the wholly-owned Italian subsidiary companies. Other taxes not related to income, such as taxes on property and share capital, are included under operating charges.

Similarly, the French group companies have opted to join the tax consolidation system ('Régime fiscal des groupes de sociétés') provided for in Articles 223-A to 223-U of the Code général des impôts (CGI): Kappa France S.a.s. operates as the consolidating company.

Earnings per share/ Diluted earnings per share

Earnings per share is calculated dividing the profit or loss attributable to the shareholders of the Parent Company by the weighted average ordinary shares in circulation during the period.

The diluted earnings per share is calculated dividing the profit or loss attributable to the shareholders of the Parent Company by the average weighted number of shares outstanding, taking into account the effects of all the potential ordinary shares with dilution effects. In 2025, there were no diluting effects on the shares.

Provisions and contingent liabilities

The Group may be involved in legal and tax disputes, concerning specific issues and in various jurisdictions. Considering the uncertainties relating to these issues, it is difficult to predict with certainty any future payments required. In addition, the Group has instigated legal action for the protection of its Trademarks, and of its products, against counterfeit products. The cases and disputes against the Group often derive from complex legal issues, which are often subject to varying degrees of uncertainty, including the facts and circumstances relating to each case, jurisprudence and different applicable laws.

In the normal course of business, Management consults with its legal consultants and experts on legal matters.

The Group accrues a liability against disputes when it considers it is probable that there will be a financial payment made and when the amount of the losses arising can be reasonably estimated.

The contingent liabilities are not recorded in the financial statements, but are reported as a disclosure in the Notes (Note 52) unless the probability of payment is remote. In accordance with paragraph 10 of IAS 37 – Provisions, contingent liabilities and contingent assets a contingent liability is (a) a possible obligation which derives from past events and whose existence will be confirmed only on the occurrence or otherwise of one or more future uncertain events, not entirely under the control of the enterprise, or (b) a current obligation which derives from past events but which cannot be recorded in the financial statements as the payment is improbable or cannot be reliably estimated.

Use of estimates

The preparation of the financial statements and the relative notes in application of IFRS require that management make estimates and assumptions on the values of the assets and liabilities in the financial statements and on the information relating to the assets and contingent liabilities at the balance sheet date. The actual results may differ from such estimates.

Estimates are utilised to measure intangible and tangible assets subject to impairment tests, in addition to recognise provisions on doubtful debts, inventory obsolescence, amortisation and depreciation, the writedown of assets, employee benefits and income taxes.

The estimates and assumptions are reviewed periodically and the effects of all variations are immediately recognised in the income statement.

Intangible assets

An intangible asset is a non-monetary asset, identifiable and without physical substance, controllable and capable of generating future economic benefits. Intangible assets are recognised at purchase and/or production cost, including the costs of bringing the asset to its current use net of accumulated amortisation and any loss in value. Amortisation begins when the asset is available for use and is recognised on a straightline basis over the residual estimated useful life of the asset.

Software development

Software acquired and IT programmes developed internally are amortised over five years, while the costs incurred to maintain or upgrade the original operational standard are expensed in the year and are not capitalised.

Concessions, brands and similar rights

The brands Kappa, Robe di Kappa, Superga, K-Way, Briko, Sebago, Woolrich and Sundek are considered intangible assets with indefinite useful life; as such these assets are not amortised but subject to an impairment test at least annually.

The brand Jesus Jeans, which has not yet reached a position similar to those of the principal brands, is amortised over a period of 20 years.

The patent rights are amortised over ten years.

Other intangible assets

Other intangible assets mainly consist of leasehold improvements and are amortised on the basis of the relevant lease contract.

Business combinations

Business combinations are recognised according to the acquisition method.

According to this method, the amount transferred in a business combination is recognised at fair value, calculated as the sum of the fair value of the assets transferred and the liabilities assumed by the Group at the acquisition date. Transaction costs are recognized to profit or loss when they are incurred.

Goodwill is calculated as the excess of the amounts transferred to the business combination, of the value of minority interests' net equity and the fair value of any holding previously held in the acquired company compared to the fair value of the net assets acquired and liabilities assumed at the acquisition date. If the value of the net assets acquired and the liabilities assumed at the acquisition date exceeds the sum of amounts transferred, any non-controlling interest and the fair value of any previously held interests in the acquiree, this excess is immediately recognized in profit or loss as income deriving from the business combination.

If the initial values of a business combination are incomplete at the period-end in which the business combination took place, the Group reports in its consolidated financial statements the provisional values of the items for which the final calculations could not be made. These provisional values are adjusted in the measurement period to take account of the new information obtained on the facts and circumstances existing at the acquisition date which, if known, would have had effects on the value of assets and liabilities recognised at this date.

Goodwill

In the case of business combinations, the assets, the liabilities and the contingent liabilities acquired and identifiable are recorded at their fair value at the date of acquisition. The positive difference between the acquisition cost and the portion held by the Group of the present value of the assets and liabilities is classified as goodwill and recorded in the financial statements as an intangible asset. Any negative difference ("negative goodwill") is recognised in the income statement at the date of acquisition.

Goodwill is not amortised, but is subject annually, or more frequently if specific events or circumstances indicate the possibility of having incurred an impairment, to verifications of any reduction in value, as provided by

IAS 36 - Reduction in value of assets After initial recognition, goodwill is measured at cost less any loss in value. The impairment of goodwill may not be written back.

This category includes the amounts paid by the Group to sub-enter into the contractual positions of directly managed and franchising stores (key money). This commercial goodwill, where related to commercial positions of value, is recognised to the consolidated financial statements as an intangible assets with indefinite useful life, and subject to an impairment test at least once a year, or more frequently in the presence of impairment indicators, comparing the book value with the higher between the value in use and the fair value less selling costs, with this latter also determined in view of valuations made by independent experts. Commercial goodwill relating to other positions is amortised over the duration of the relative rental contract.

Property, plant and equipment

Property, plant and equipment are recorded at purchase or production costs, including accessory charges and direct and indirect costs, for the amount reasonably attributable to the assets.

Subsequent expenditures are only capitalised where they increase the future economic benefits of the asset to which they relate. All other costs are expensed as incurred.

Property, plant and equipment are amortised on a straight-line basis over the estimated useful life of each asset. The depreciation rates by asset category are shown below:

Description	Estimated useful life years
Property	33
Plant & machinery	8
Furniture and furnishings	3-8
Motor vehicles	4
EDP	3-8

Fixed assets which at the balance sheet date are lower than the book value are recorded at this lower value, which however may not be maintained at this value in subsequent periods if the reasons for the adjustment no longer exist.

Ordinary maintenance costs are fully charged to the income statement.

Advances and costs for property, plant and equipment in progress which are not yet utilised in the operating activities are reported separately.

The historic value of land is not depreciated.

Leased assets

Right-of-use assets

The Group recognises the right-of-use assets at the initial leasing date (i.e. the date on which the underlying asset is available for use). The right-of-use assets are measured at cost, net of accumulated amortisation and impairments, adjusted for any remeasurement of the lease liabilities.

The cost of the right-of-use assets includes the amount of the lease liabilities recognised, the initial direct costs incurred and the payment of leases at the commencement date or before, net of any incentives received. Unless the Group does not have the reasonable certainty of obtaining ownership of the leased asset on conclusion of the leasing contract, the usage right assets are amortised on a straight-line basis for a period covering the lesser between the estimated useful life and the lease duration. Right-of-use assets are subject to impairment.

Lease liabilities

At the lease commencement date, the Group recognises the lease liabilities measuring them at the present value of the payments due for the lease not yet settled at that date. The payments due include the fixed payments (including the fixed payments in substance), net of any lease incentives to be received, the variable lease payments which depend on an index or a rate and the amounts expected to be paid as guarantee on the residual value. The lease payments include also the exercise price of a purchase option where it is reasonably certain that this option shall be exercised by the Group and the lease termination penalty payments, where its duration takes account of the exercise by the Group of the termination option on the lease.

The variable lease payments not depending on an index or a rate are recognised as costs in the period in which the event or the condition generating the payment occurs. In calculating the present value of the payments due, the Group uses the marginal loan rate at the commencement date where the implied interest rate may not be easily determined.

After the commencement date, the amount of the lease liability increases to take account of the interest on the lease liabilities and reduces to consider the payments made. In addition, the carrying amount of the lease payables is restated in the case of any changes to the lease or a review of the contractual terms with regards to the change in the fixed payments in substance; it is in addition restated amid changes to the valuation of the acquisition of the underlying asset.

Short-term leases and low value asset leases

The Group applies the exception for the recognition of short-term leases for machinery and equipment (i.e. leasing with a duration of 12 months or less from the commencement date and not containing a purchase option). The Group has also applied the exception for leases concerning assets of a modest value with regards to the leasing contracts on office equipment whose value is considered low (i.e. below Euro 5,000).

The short-term lease charges and those for low value assets are recognised as costs on a straight-line basis over the lease duration.

Impairments

The carrying value of the assets of the Group are measured at each reporting date to determine whether there has been a loss in value, in which case an estimate is made of the recoverable value of the asset. A loss in value (impairment) is recorded in the income statement when the carrying value of an asset or a cashgenerating unit exceeds its recoverable value.

The indefinite intangible assets (including goodwill) are tested annually and whenever there is an indication of a possible loss, in order to determine whether a loss in value has occurred.

Measuring recoverable amount

The Group's principal objective is the growth in value of its own brands, managed within a portfolio, with the distribution of the associated products through a global network of licensee producers and distributors or directly.

Within this business model, for the purposes of the impairment test of the BasicNet Group at consolidated level, the CGU's were identified as the brands of the company.

The impairment test was carried out comparing the book value of the net assets of each CGU with their recoverable value, defined as the higher between their value in use and the fair value less selling costs.

The value in use is determined discounting to the WACC the cash flows generated from each CGU. This latter are identified with the first level gross operating margin, less investments in fixed assets and notional taxes, generated by each brand through royalties, sourcing commissions and direct sales. The changes in working capital are not included in these cash flows, in line with the underlying carrying amount and the assumption that these changes approximate zero.

The operating costs are allocated to the related CGU or divided based on determined and certain criteria. The costs not specifically allocated, or whose division based on analytic criteria does not reflect the effective period of use, are tested at Group level.

For the years beyond the Plan a terminal value is estimated applying the perpetual yield model to the cash flows of the final year. The growth rate utilised in the calculation of the terminal value, in accordance with the provisions of paragraph 36 of IAS 36, reflect the growth trend for the demand of clothing goods (i.e. clothes and footwear) at international level. In line with the most common valuation practices adopted, in the calculation of the terminal value the changes in the net working capital are assumed as zero and the investments equal to depreciation.

The BasicNet Group, on completion of the tests described above, carries out a second level test in relation to the presence of permanent loss in value on the totality of the consolidated assets.

Write-back of value

This loss is restated if the elements that generated the loss no longer exist. The recoverable value is recorded in the income statement adjusting the book value of the asset to its recoverable value. This latter must not be above the value which would have been determined, net of depreciation, if no loss in value of the asset had been recorded in previous years.

Investments

Investments in associates and joint ventures are measured under the equity method. The share of cost exceeding the net equity of the investee at the acquisition date is treated in a similar manner as that described for the consolidation criteria.

The non consolidated investments other than associates and joint ventures, non-listed, are measured under the cost method less any losses in value, as their fair value may not be reliably determined. The original value is restored in future years should the reason for the write-down no longer exist.

Financial assets consist of loans are recorded at their estimated realisable value.

Net inventories

Inventories are measured at the lower of purchase or production cost and their net realisable value. The cost is calculated using the weighed average cost method.

Financial instruments

Trade receivables and debt securities issued are recognised as they arise. All other financial assets and liabilities are initially recognised on the trading date, i.e. when the Group becomes a contractual party to the financial instrument.

With the exception of trade receivables without a material financing component, financial assets are initially recognised at fair value increased or reduced, in the case of financial assets or liabilities not measured at FVTPL, by the costs directly attributable to the transaction.

Upon initial recognition, a financial asset is classified according to how it is measured: at amortised cost, at fair value through other comprehensive income (FVOCI) and at fair value through profit or loss (FVTPL).

Financial assets are not reclassified following initial recognition unless the Group modifies the business model within which the assets are held. In such cases, all the affected financial assets are reclassified on the first day of the first reporting period following the change of the business model.

A financial asset shall be measured at amortized cost if both of the following conditions are met and it is not designated at FVTPL:

the financial asset is held within a business model whose objective is the holding of financial assets for the collection of the contractual cash flows; and
the contractual terms of the financial assets establish, at certain dates, cash flows represented entirely by the payment of capital and of interest on the amount of capital to be repaid.

In subsequent measurement, assets in this category are measured at amortised cost, using the effective interest rate. The effects of this measurement are recognised to financial income components. These assets are also subject to the impairment model described under Trade receivables, financial receivables, and other current and non-current receivables.

A financial asset must be measured at FVOCI if both of the following conditions are met and it is not designated at FVTPL:

the financial asset is held within a business model whose objective is achieved both through the collection of contractual cash flows and the sale of the financial assets; and
the contractual terms of the financial assets establish, at certain dates, cash flows represented entirely by the payment of capital and of interest on the amount of capital to be repaid.

Upon initial recognition of an equity security not held for trading purposes, the Group may make an irrevocable election to present subsequent changes in fair value in other comprehensive income. This choice is made for each asset. In subsequent measurement, the valuation made at recognition is updated, and any changes in fair value are recognised to the comprehensive income statement.

All financial assets not classified as measured at amortized cost or FVOCI, as noted above, are measured at FVTPL. Upon initial recognition, the Group may irrevocably designate the financial asset as measured at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch that would otherwise result from measuring the financial asset at amortized cost or FVOCI.

In subsequent measurement, FVTPL financial assets are measured at fair value. Gains and losses arising from fair value changes are recognised in the consolidated income statement in the period in which they occur.

Financial assets are derecognized when the contractual rights to the cash flows from them expire, when the contractual rights to receive the cash flows as part of a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or when the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset and does not retain control of the financial asset.

Financial liabilities are classified as measured at amortised cost or FVTPL.

A financial liability is classified at FVTPL when it is held for trading, represents a derivative, or is designated as such upon initial recognition. Financial liabilities at FVTPL are measured at fair value and any changes, including interest expense, are recognized in profit/(loss) for the year.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and exchange rate gains and losses are recognized in the income statement, as are any gains or losses from derecognition.

Trade receivables

Receivables recorded under current assets are stated at their nominal value, which substantially coincides with the amortised cost. The initial value is subsequently adjusted to take account of any write-downs, which reflects the bad debt estimate. The Group applies the simplified approach to calculating expected losses, fully recognising the expected loss at the reporting date according to historic information supplemented by forward looking considerations. Medium/long-term receivables which include an implicit interest component are discounted utilising an appropriate market rate. Receivables transferred without recourse, in which all the risks and benefits are substantially transferred by the owner of the financial assets to the factoring company, are reversed in the financial statements at their nominal value.

Cash and cash equivalents

The liquid assets principally relate to current bank accounts and cash. They are recorded for amounts effectively available at year end.

The cash equivalents are invested in highly liquid temporary financial instruments.

Prepayments and accrued income

The account includes amounts related to two accounting periods, in accordance with the accruals concept.

Treasury shares

Treasury shares are recognised as a deduction from equity. The original cost of the treasury shares and the revenues deriving from any subsequent sale are recognized as equity movements.

Provisions for risks and charges

Provisions for risks and charges are recorded in the balance sheet only when a legal or implicit obligation exists deriving from a past event that determines the commitment of resources to produce economic benefits for their compliance and a reliable estimate of the amount can be determined.

Share-based payment arrangements

The companies of the Group grant additional benefits to certain Group personnel through a 2024 - 2027 equity participation plan. The above-mentioned plan is accounted for in accordance with IFRS 2 (Share-based payments). In accordance with IFRS 2, these plans represent a remuneration component of the beneficiaries; therefore, for the equity participation plans, the cost is represented by the fair value of these instruments at the granting date, and recognised in the separate consolidated income statement under "Employee stock grant costs" over the period between the granting date and that of maturity, and in the "Employee stockbased compensation (IFRS2) reserve" under equity. Changes subsequent to the granting date in the fair value do not have an effect on the initial value. At the end of each year the estimate is updated on the number of rights which will mature on maturity. The change in estimate is carried as an adjustment to the item "Employee stock-based compensation (IFRS2) reserve" with an offsetting entry "Employee stock grant costs."

Employee benefits

The Post-Employment Benefit in accordance with Italian legislation is quantified as a defined benefit plan and is measured in accordance with the "Projected Unit Credit Method".

From January 1, 2007, this liability refers exclusively to the portion of the Post-Employment Benefit, matured up to December 31, 2006, which following the complementary pension reform (Legislative Decree No. 252 of December 5, 2005) continues to constitute an obligation of the company. Following the entry into force of the above-mentioned reform as enacted by Law No. 296 of December 27, 2006 (2007 Finance Law), the liability, as concerning services already completely matured, was restated without applying the pro-rata of the employment service and without considering, in the actuarial calculation, the components relating to future salary increases.

The cost relating to employment services for the companies of the Group with less than 50 employees, as well as the interest on the "time value" component in the actuarial calculations will remain in the profit and loss account.

The portion of the Post-Employment Benefit paid to a supplementary pension fund is considered a defined contribution plan as the obligation of the company towards the employee ceases with the payment of the amount matured to the funds. Also the portion of the Post-Employment Benefit paid to the INPS Treasury fund is recorded as a defined contribution plan.

Payables

Financial payables are recorded at their amortised cost. The book value of the trade and other payables, recognised at nominal value which approximates the amortised cost, at the balance sheet date approximates their fair value.

Cash flow hedges and accounting of relative operations

The BasicNet Group utilises financial instruments to hedge interest rates on some loans and to hedge against fluctuations in the Euro/USD exchange rates on the purchases of products for sale, not adequately hedged by royalties and sourcing commission income.

These instruments are initially recorded at their fair value, and subsequently measured according to whether they are "hedged" or "not hedged" as per IFRS 9.

It is recalled that the BasicNet Group does not undertake derivative contracts for speculative purposes.

The hedging may be of two types:

Fair value hedges;
Cash flow hedges.

The BasicNet Group, before signing a hedge contract, undertakes a close examination of the relationship between the hedge instrument and the item hedged, in view of the objectives to reduce the risk, also evaluating the existence and the continuation over the life of the financial instrument of the effectiveness requirements, necessary for the hedge accounting.

After their initial recognition, they are accounted as follows:

a) Fair value hedges

The changes in their fair value are recognised in the income statement, together with the changes in the fair value of the relative assets and liabilities hedged.

b) Cash flow hedges

The accumulated amounts in the comprehensive income statement are recorded in the income statement in the year in which the scheduled hedge operation matures or the instrument hedged is sold, or when the effectiveness requirements for hedge accounting no longer exist.

c) Derivative financial instruments which do not have the effectiveness requirements for hedge accounting

The derivative financial instruments which do not comply with the requirements of IFRS 9 for the identification of the hedge, where present, are classified in the category of financial assets and liabilities measured at fair value through the profit and loss account. The Group does not utilise financial instruments not for hedging purposes.

Fair value

The Group applies IFRS 13 for fair value measurement and for the relevant information when such a measurement is required or permitted by other accounting standards. Specifically, the accounting standard defines the fair value as the price that would be received for the sale of an asset, or that would be paid to transfer a liability in an arm's length transaction at the measurement date.

Hierarchy of Fair Value according to IFRS 7

IFRS 7 requires that the classification of financial instruments measured at fair value is determined based on the quality of the input sources used in the valuation.

The IFRS 7 classification implies the following hierarchy:

level 1: determination of fair value based on prices listed ("unadjusted") in active markets for identical assets or liabilities;
level 2: determination of fair value based on other inputs than the listed prices included in "level 1" but which are directly or indirectly observable. This category includes the instruments with which the Group mitigates the risk deriving from fluctuations in interest rates and currencies;
level 3: determination of fair value based on valuation models whose input is not based on observable market data ("unobservable inputs"). There are no financial instruments measured in this manner.

6. OTHER INFORMATION

The subsequent events to the end of the year and the outlook for the current year are reported in the Directors' Report.

K-Way transaction

On February 28, 2025, having received clearance from the European Antitrust Authority, the Group completed Permira's entry into the share capital of K-Way S.p.A. The transaction comprised a number of transfers, following which the share capital of K-Way is now indirectly held approximately 60% by BasicNet, approximately 40% by Permira through its Permira Growth Opportunities II fund, and for a stake of less than 0.5% by a number of key managers of K-Way S.p.A:

BasicNet established the three sub-holdings K-Way TopCo (wholly-owned), K-Way MidCo (whollyowned by K-Way TopCo) and K-Way BidCo (in turn, wholly-owned by K-Way MidCo);
BasicNet transferred a stake comprising approx. 57% of the share capital of K-Way S.p.A. to K-Way TopCo;
Permira and some key K-Way managers made cash contributions to K-Way TopCo of more than Euro 170 million;
The stake in K-Way and the cash contributions were in turn transferred by K-Way TopCo to K-Way MidCo and by the latter to K-Way BidCo;
K-Way BidCo then purchased the remaining stake in K-Way, constituting approx. 43% of the capital, from BasicNet, for an amount of approx. Euro 190.9 million following the price adjustments resulting from the calculation of the net financial position at the closing date;
The purchase price of Euro 125.9 million due from K-Way BidCo to BasicNet was paid in cash and through the granting of a Vendor loan for Euro 65 million.
In December, the Group completed the reverse merger of K-Way BidCo into K-Way, effective for accounting and fiscal purposes as of January 1, 2025.

The impact of this transaction on the BasicNet Group's consolidated financial statements resulted in:

an increase in shareholders' equity and cash and cash equivalents for cash contributions made by third parties, amounting to Euro 170 million;

The recognition to the income statement of transaction costs and other non-recurring extraordinary costs related to the transaction totalling Euro 20.3 million and the consequent reduction of cash and cash equivalents against the settlement of the respective payables;
the recognition of current taxes on capital gains realised by BasicNet S.p.A. for Euro 2.4 million.

The cash latterly received by BasicNet S.p.A. was used for Euro 23.6 million for the early repayment of the mortgage taken out by BasicVillage with Banco BPM (Note 35) and for Euro 90.1 million for a temporary investment in financial securities with varying maturities (Notes 24 and 29) with primary financial institutions as counterparties.

As part of the transaction, K-Way and its subsidiaries fully repaid the medium to long-term loans (Note 35) and signed a revolving credit line totalling Euro 65.0 million with BNL, Banco BPM, BPER Banca and Unicredit.

Woolrich Transaction

In November, the BasicNet Group reached an agreement with investment fund L-Gam for the acquisition of Woolrich®, a storied American brand synonymous with authenticity, quality and outdoor heritage.

The transaction was completed through Tow S.p.A. (formerly Jesus Jeans S.r.l.), which acquired:

the trademark rights to the Woolrich® brand for Europe from John Rich & Sons Inv. Hold. Co., for a cash consideration of Euro 11.55 million (Note 20);
100% of the shares of Woolrich Europe S.p.A., the company responsible for its distribution and retail operations, from Woolrich International Ltd. This transaction was completed for a total consideration of Euro 28.45 million, of which Euro 12.0 million was settled through the delivery of 1.2 million ordinary BasicNet shares at a unit value of Euro 10.0 per share, with the remainder paid in cash. Provision has also been made for the selling party to receive a potential variable deferred consideration, preliminarily estimated at Euro 2.0 million (Note 38).

With a view to optimising the Group's financial structure, the transaction was structured using medium and long-term credit facilities as well as a revolving credit facility totalling up to Euro 90 million made available by UniCredit (Note 35). Specifically, these include:

an unsecured loan totalling Euro 58.0 million, disbursed to BasicNet S.p.A., with a five-year term including a nine-month grace period, repayable in quarterly instalments in arrears, at a contractual rate of 3-month Euribor + 100 bps p.a. with a margin ratchet mechanism. A portion of the proceeds was used to repay Woolrich Europe's outstanding debt at the closing date;
a secured loan (supported by a pledge over the shares of Tow S.p.A. and Woolrich Europe S.p.A., together with a first demand guarantee provided by BasicNet S.p.A.) totalling Euro 12.0 million, with a seven-year term including an 18-month grace period, repayable in quarterly instalments in arrears, at a contractual rate of 3-month Euribor + 135 bps p.a. with a margin ratchet mechanism, with use restricted to the acquisition of the Woolrich® brand;
a revolving credit facility of up to Euro 20.0 million granted to Woolrich Europe S.p.A..

Set out below is a detailed schedule of the assets and liabilities assumed at the date of initial consolidation (December 1, 2025), net of goodwill already recognised in the financial statements of the newly acquired company, together with a comparison against the consideration paid. For the purposes of applying IFRS 3, the consideration agreed between the parties was adjusted, for the portion paid through the delivery of treasury shares, to the fair value or stock market value of those shares on the day of the closing.

EXPLANATORY NOTES

	Amount
Fixed cash component	16,450
Fixed component in treasury shares	12,000
Variable component ("earn-out")	2,000
Total paid	30,450
Price adjustment per IFRS 3	(3,576)
Net assets acquired
Intangible and tangible fixed assets	4,857
Right-of-use	35,785
Equity invest. & other financial assets	2,362
Net inventories	24,114
Trade receivables	21,091
Cash and cash equivalents	2,627
Loans	(59,099)
Payables for right-of-use	(35,785)
Trade payables	(31,220)
Other net current assets and liabilities	(2,109)
Other net non-current assets and liabilities	13,535
Net identifiable assets	(23,842)
Consolidation differences	50,716

The difference between the consideration paid and the carrying amount of the net assets assumed has been provisionally allocated to goodwill (Note 22). The Group expects to complete the purchase price allocation process within 12 months.

Sundek Transaction

In December, the BasicNet Group reached an agreement with Winnie S.r.l. for the acquisition of the Sundek® brand, a storied icon of beachwear, together with 100% of the shares of Kickoff S.p.A. (subsequently renamed Sundek S.p.A.), the current owner and manager of the brand.

The acquisition was completed directly by BasicNet S.p.A. for an initial consideration of Euro 10.0 million, settled entirely through the delivery of 1.38 million ordinary BasicNet shares at a unit value of Euro 7.2 per share. The treasury shares delivered to the counterparty as part of the initial consideration will be subject to a 36-month lock-up period from the date of completion of the acquisition, with partial releases beginning in the second year.

Provision has also been made for the selling party to receive a potential variable deferred consideration, the present value of which is preliminarily estimated at Euro 4.0 million (Note 38) and linked to the brand's global revenue over the four-year period 2026–2029. Any amounts due as earn-out may be settled, at BasicNet's discretion, in whole or in part in cash or through the transfer of treasury shares valued at the average market price for the six months preceding the date of approval of the financial statements for the year in which the Sundek® brand's revenue threshold is exceeded. Any additional treasury shares delivered by BasicNet to the counterparty as earnout will be subject to a 12-month lock-up period from the date of their transfer.

As part of the transaction, BasicNet also acquired at face value a shareholder loan of Euro 1.0 million granted by Winnie S.r.l. to Kickoff S.p.A., and transferred Euro 6.7 million to the newly acquired company by means of a dedicated shareholder loan, to provide it with the liquidity needed to settle outstanding liabilities, principally of a tax nature, existing at the closing date.

Set out below is a detailed schedule of the assets and liabilities assumed at the date of initial consolidation (December 31, 2025), net of the brand and goodwill already recognised in the financial statements of the newly acquired company, together with a comparison against the consideration paid:

	Amount
Fixed cash component	-
Fixed component in treasury shares	10,000
Variable component ("earn-out")	4,000
Total paid	14,000
Net assets acquired
Intangible and tangible fixed assets	3,636
Right-of-use	8,298
Net inventories	6,777
Trade receivables	907
Cash and cash equivalents	603
Loans	(24,488)
Payables for right-of-use	(8,298)
Trade payables	(2,494)
Other net current assets and liabilities	947
Other net non-current assets and liabilities	(1,693)
Net identifiable assets	(15.807)
Consolidation differences	29,807

The difference between the consideration paid and the carrying amount of the net assets assumed has been provisionally allocated Euro 27.5 million to the brand (Note 22), with a consequent recognition of deferred tax liabilities of Euro 4.1 million (Note 40) and Euro 6.5 million to goodwill. The Group expects to complete the purchase price allocation process within 12 months.

Sebago France Transaction

In December, the BasicNet Group reached an agreement for the acquisition of the entire share capital of Sebago France S.a.s., the existing licensee of the Sebago® brand for the French market.

The acquisition, which is considered strategic for the consolidation of the brand's European market presence, for accelerating the development of direct retail in the country, and as consistent with the project to centralise e-commerce and multi-brand distribution, was completed for a consideration comprising:

an initial price of Euro 4.2 million, paid in December, subject to an upward adjustment of Euro 1.7 million based on the final balance sheet figures at the closing date. This additional component (Note 44) was paid in full in February 2026;
an earn-out based on the brand's performance in the French market for 2026, preliminarily estimated at Euro 1.0 million, equal to the floor (Note 38) and payable in the first quarter of 2027.

The transaction was financed entirely from the Group's own financial resources.

Set out below is a detailed schedule of the assets and liabilities assumed at the date of initial consolidation (December 31, 2025), together with a comparison against the consideration paid:

EXPLANATORY NOTES

	Amount
Fixed cash component	5,921
Fixed component in treasury shares	-
Variable component ("earn-out")	1,000
Total paid	6,921
Net assets acquired
Intangible and tangible fixed assets	299
Key money	2,096
Right-of-use	1,030
Net inventories	1,961
Trade receivables	1,017
Cash and cash equivalents	945
Loans	(1,220)
Payables for right-of-use	(1,030)
Trade payables	(601)
Other net current assets and liabilities	433
Net identifiable assets	4,929
Consolidation differences	1,992

Information required by Law No. 124 of August 4, 2017, Article 1, paragraph 125

In accordance with Article 1, paragraph 125 of Law 124/2017, the Group has not received any grants from public bodies in excess of Euro 10 thousand.

7. DISCLOSURE BY OPERATING SEGMENT

The BasicNet Group identifies three reporting segments, as outlined extensively in the Directors' Report:

"Clothing, footwear and accessories," encompasses the development of proprietary brands and the distribution of related products both directly and through a global network of licensee companies. The following Group companies are included: BasicNet S.p.A., Basic Properties America, Inc., BasicNet Asia Ltd. and BasicNet Asia Company Limited (Vietnam) Ltd, Kappa S.r.l. and subsidiaries KappaRetail S.r.l., Kappa Sport Iberia SL and the Kappa France Group, Sebago S.r.l. and subsidiaries SebagoRetail S.r.l., Sebago Iberia S.L. and Sebago France S.a.s., Superga S.r.l. and subsidiary SupergaRetail S.r.l., BasicAir S.r.l., K-Way Topco S.r.l., K-Way Midco S.p.A. and subsidiary K-Way S.p.A. with its subsidiaries ( K-Way France S.a.s Group, K-WayRetail S.r.l., K-WayRetail SUISSE S.A., K-Way Iberia SL, K-Way Retail Ireland Ltd. and GLD Brands Ltd.), and BasicItalia S.r.l.; as of December 1, 2025 through Tow S.p.A. (formerly Jesus Jeans S.r.l.) Woolrich Europe S.p.A. with its subsidiaries Woolrich Footwear S.r.l., Woolrich France S.L., Woolrich Germany GmbH, CH Branch, Woolrich Netherlands, Woolrich Sweden AB; from December 31, Sundek S.p.A. and its subsidiaries Kickoff France S.a.s, Kickoff SL and Kickoff USA Inc;
"Property", which includes the management of the Group's real estate properties.
"Investments", which includes the development of future strategic investments for the Group.

(In Euro thousands)

December 31, 2025	Clothing, footwear and accessories	Property	Investments	Inter-segment eliminations	Consolidated
Direct sales – third parties	348,282	-	-	-	348,282
(Cost of sales)	(185,023)	-	-	-	(185,023)
GROSS MARGIN	163,260	-	-	-	163,260
Royalties and sourcing commissions – third parties	66,431	-	-	-	66,431
Other income - third parties	6,556	6,505	-	(5,152)	7,909
(Sponsorship and media costs)	(47,340)	-	-	-	(47,340)
(Personnel costs)	(58,400)	(113)	-	-	(58,513)
(Selling, general and administrative costs, royalties expenses)	(100,926)	(2,992)	-	1,490	(102,428)
Amortisation and depreciation	(24,263)	(2,421)	-	3,336	(23,348)
EBIT	5,318	979	-	(326)	5,972
Financial income	6,535	-	-	268	6,803
(Financial charges)	(9,311)	(829)	-	-	(10,140)
Share of profit/(loss) of investments	1,103	-	(3,000)	-	(1,897)
PROFIT/(LOSS) BEFORE TAXES	3,645	150	(3,000)	(58)	738
Income taxes	(9,140)	(30)	720	2	(8,448)
NET PROFIT/(LOSS) FOR THE YEAR	(5,496)	120	(2,280)	(55)	(7,711)
Significant non-cash items:
Income from right-of-use Amortisation and depreciation Write-downs	(24,263) -	(2,421) -	- -	3,336 -	(23,348) -
Total non-cash items	(24,263)	(2,421)	-	3,336	(23,348)
Segment assets and liabilities:
Assets	859,564	45,911	735	(56,033)	850,176
Liabilities	540,384	37,662	5	(50,019)	528,032

(In Euro thousands)

December 31, 2024	Clothing, footwear and accessories	Property	Investments	Inter-segment eliminations	Consolidated
Direct sales – third parties	346,802	-	-	-	346,802
(Cost of sales)	(194,145)	-	-	-	(194,145)
GROSS MARGIN	152,657	-	- -	-	152,657
Royalties and sourcing commissions – third parties	60,882	-	-	-	60,882
Other income - third parties	16,142	6,313	-	(4,833)	17,622
(Sponsorship and media costs)	(43,624)	-	-	6	(43,618)
(Personnel costs)	(49,014)	(137)	-	-	(49,151)
(Selling, general and administrative costs, royalties expenses)	(75,809)	(2,906)	-	1,392	(77,323)
Amortisation and depreciation	(19,552)	(2,593)	-	3,219	(18,927)
EBIT	41,683	676	-	(216)	42,143
Financial income	3,441	1	-	289	3,732
(Financial charges)	(7,627)	(1,526)	-	-	(9,153)
Share of profit/(loss) of investments	(7)	-	-	-	(7)
PROFIT/(LOSS) BEFORE TAXES	37,490	(848)	- -	73	36,715
Income taxes	(11,770)	318	- -	2	(11,451)
NET PROFIT/(LOSS) FOR THE YEAR	25,720	(531)	-	75	25,264
Significant non-cash items:			-
Income from right-of-use Amortisation and depreciation Write-downs	- (19,552) -	- (2,593) -	- - - -	- 3,219 -	- (18,927) -
Total non-cash items	(19,552)	(2,593)	-	3,219	(18,927)
Segment assets and liabilities:			- -
Assets	451,469	45,562	-	(29,325)	467,706
Liabilities	287,251	37,470	-	(27361)	297,360

The Group operating performance is outlined in detail in the Directors' Report. The segment performances may be summarised as follows:

the "Clothing, footwear and accessories" segment reports net royalties and sourcing commissions of Euro 66.4 million in 2025, compared to Euro 60.9 million in the previous year. Direct sales are also reported of Euro 348.3 million, compared to sales in the previous year of Euro 346.8 million. The contribution margin on sales was Euro 163.3 million, compared to Euro 152.7 million in 2024. The revenue margin was 47% (44% in 2024). Personnel costs increased on the same period of the previous year, mainly due to the development the Group's strategic areas and of direct retail operations. The segment reports a loss of Euro 7.7 million due to the extraordinary and non-recurring charges from the transaction outlined at Note 5, compared to a profit of Euro 25.7 million in the same period of the previous year.
the "Property" segment reports an operating profit of Euro 979 thousand, compared to Euro 676 thousand in 2024.
The "Investments" segment includes an initial investment of Euro 3 million, represented by the undertaking of the stake in the company Florence S.r.l. The segment reports a loss of Euro 2.3 million, equal to the write-down recognised, net of related tax effect.

EXPLANATORY NOTES TO THE INCOME STATEMENT

8. CONSOLIDATED DIRECT SALES

The breakdown of "consolidated direct sales" by geographic area is reported below:

	FY 2025	FY 2024
Sales Italy	211,504	207,609
EU countries other than Italy	128,791	130,160
Rest of the World	7,987	9,034
Total consolidated direct sales	348,282	346,802

Sales revenues concern the finished product sales of the Group companies through the wholesale, retail (both direct and through franchising) and online channels (Euro 346.4 million) and for the sale of samples (Euro 1.9 million). Sales on the home market accounted for 60.7%, while approx. 37% of sales were in other EU countries, with the remaining approx. 2.3% outside the EU.

The composition of revenues from direct sales by distribution channel is presented in the following table:

	FY 2025	FY 2024
Multibrand sales	216,462	219,502
Retail sales	103,207	101,404
Online sales	26,634	23,921
Sample sales	1,979	1,974
Total consolidated direct sales	348,282	346,802

9. COST OF SALES

	FY 2025	FY 2024
Goods purchased – Overseas	149,834	145,529
Freight charges and accessory purchasing cost	17,648	18,432
Cost of outsourced logistics	12,817	11,144
Goods purchased – Italy	14,255	9,405
Samples purchased	3,197	2,821
Packaging	1,262	1,106
Change in inventory of raw materials, ancillary, consumables and goods	(19,398)	3,588
Others	5,407	2,113
Total cost of sales	185,023	194,145

"Goods purchased" concern the finished products acquired by the Group companies for distribution in their respective territories.

Sample purchases were made by for resale to the licensees.

10. ROYALTIES AND SOURCING COMMISSIONS

"Royalties and sourcing commissions" refer to royalty fees for the brand licenses in the countries where the licenses have been assigned, or recognised to authorised sourcing centres for the production and sale of group brand products by commercial licensees.

The changes in the year are commented upon in the Directors' Report.

	FY 2025	FY 2024
Europe (EU and non-EU)	35,120	28,423
The Americas	5,092	6,553
Asia and Oceania	20,535	19,875
Middle East and Africa	5,684	6,031
Total	66,431	60,882

11. OTHER INCOME

	FY 2025	FY 2024
Prior year income	3,176	4,034
Rental income	818	1,195
Income and chargebacks from aircraft	751	737
Income from promo sales	262	761
Recovery of condominium expenses	205	213
Income from contractual conclusion	-	6,791
Signing fees from commercial licensees	-	863
Other income	2,697	3,029
Total other income	7,909	17,622

"Prior year income" concerns the positive differences on the assessment of expenses from previous years.

"Income and recharges from aircraft" include the recharge of costs to specialised aircraft operators and income from leasing aircraft to third parties.

The "recovery of condominium expenses" concerns the recharge to lessees of utility costs.

The "income from contractual conclusion" for 2024 included fees recognised by an Asian licensee for the early termination of a multi-year license.

"Other income" includes the recharge of expenses to third parties and other indemnities against counterfeiting and unauthorised usage protection actions.

12. SPONSORSHIP AND MEDIA COSTS

	FY 2025	FY 2024
Sponsorship and marketing	33,066	30,641
Advertising	11,821	10,476
Promotional expenses	2,452	2,501
Total sponsorship and media costs	47,340	43,618

The account "sponsorship and marketing contribution" refers to communication investments incurred directly to which the Group contributes, described in detail in the Directors' Report.

"Advertising" refers to billboard advertising and press communication campaigns.

Promotional expenses concern gifts of products and advertising material, not relating to specific sponsorship contracts.

13. PERSONNEL COSTS

	FY 2025	FY 2024
Salaries and wages	41,931	36,236
Social security charges	12,833	11,385
Post-employment benefits	3,749	1,529
Total	58,513	49,151

The number of employees at the reporting date, by category, is reported in the separate section in the Consolidated Non-Financial Declaration.

At December 31, 2025, the Group had 1,771 employees, distributed across the locations in which the Group operates.

The average number of employees in 2025 was 1,230, broken down as 40 executives, 7 managers, 1,159 white-collar and 23 blue-collar employees, an increase of 650 resources on the previous year.

The increase mainly concerns the personnel employed at the new sales points, and the new strategic commercial and marketing resources and also includes the effects of the settlement agreement signed following the departure of an executive of the Group.

14. SELLING, GENERAL AND ADMINISTRATIVE COSTS AND ROYALTIES EXPENSES

	FY 2025	FY 2024
Selling and royalty service expenses	20,406	21,559
Professional consultants	19,581	6,367
Commercial expenses	14,289	12,660
Rental, accessory and utility expenses	12,873	11,098
Directors and Statutory Auditors emoluments	11,676	4,155
Doubtful debt provision	4,227	5,099
Bank charges	2,217	1,945
Taxes and duties	1,937	1,803
Costs related to Human Resources	1,900	1,832
Hire	1,735	1,486
Insurance	1,571	1,394
Purchase of consumables, stationery and printed material	1,304	974
Extraordinary charges	555	1,133
Company expenses	550	376
Other transport costs	501	388
Other general expenses	7,108	5,056
Total selling, general and administrative costs, and royalties expenses	102,428	77,323

"Selling and royalty service expenses" mainly includes commissions to agents and transport costs to customers, whose increase is related to higher revenues; the item also includes royalties on sports team merchandising contracts and co-branding operations.

The increase in "professional consultants" is essentially attributable to the fees paid to professionals involved in the numerous M&A transactions during the year.

"Directors and Statutory Auditors emoluments", for offices held at the date of the present Report, approved by the Shareholders' AGM and the Board of Directors' meetings of April 17, 2025, are in line with the company remuneration policy, pursuant to Article 78 of Consob Regulation No. 11971/99 and subsequent amendments and supplements, and are reported in the Remuneration Report pursuant to Article 123-ter of the CFA, which is available on the company's website www.basicnet.com Shareholder' Meeting 2026 section, to which reference should be made.

"Other general expenses" includes other taxes, consumption materials, hire charges, and corporate and other minor expenses.

15. AMORTISATION & DEPRECIATION

	FY 2025	FY 2024
Rights-of-use	12,579	9,350
Property, plant and equipment	5,704	5,692
Intangible assets	5,064	3,885
Total amortisation & depreciation	23,348	18,927

Amortisation of intangible assets includes approx. Euro 70 thousand of key-money write-down relating to some sales points for which the decision to close has been made, within a normal rotation of less profitable sales point in favour of the opening of new locations or more appropriate operational strategies.

Provided below is a summary of total charges related to right-of-use assets:

	FY 2025	FY 2024
Depreciation for right-of-use	12,579	9,350
Leasing and rental costs excluded from IFRS 16	3,536	2,813
Interest on payables for right-of-use	1,734	1,052
Total rent, lease and hire costs	17,849	13,215

16. NET FINANCIAL INCOME/(CHARGES)

	FY 2025	FY 2024
Interest income on securities	1,801	-
Interest income	425	116
Bank interest charges	(3,259)	(3,021)
Interest on medium/long term loans	(702)	(1,495)
Property lease interest	(15)	(21)
Interest IFRS 16	(1,734)	(1,052)
Loan and current account fees	(309)	(256)
IAS 19 interest	(89)	(89)
Others	(422)	(355)
Total financial income and charges	(4,303)	(6,173)
Exchange gains	3,627	3,366
Exchange losses	(2,662)	(2,614)
Net exchange gains/(losses)	966	752
Total financial income/(charges)	(3,338)	(5,421)

Net exchange gains amounted to Euro 966 thousand, against gains of Euro 752 thousand in the previous year, as a result of trends in the US dollar and related hedging instruments obtained during the previous year; net financial charges servicing debt amounted to Euro 4.3 million compared to Euro 6.2 million in the previous year due to the lower average level of debt for the Group during the year and the guaranteed return from the temporary liquidity invested.

"Others" includes approximately Euro 351 thousand financial discounts and rebates mainly on the French and English markets.

17. MANAGEMENT OF EQUITY INVESTMENTS

The account reflects the effect on the consolidated result for the year of the valuation at equity of the joint venture Fashion S.r.l. for approximately Euro 70 thousand (Euro -7 thousand in 2024). The investment was sold at the end of 2025.

It also includes the charge resulting from the write-down of the investment in Florence S.r.l. (Euro 3.0 million), net of the gain resulting from the adjustment to the final tranche of the earnout of K-Way France (Euro 1.1 million).

18. INCOME TAXES

The balance of income taxes comprises current taxes for Euro 6.7 million (of which Euro 1.2 million for IRAP), the release of deferred taxes from previous years and the assessment of deferred taxes emerging in the year for Euro 2.1 million and Euro 0.8 million regarding the positive effects from the application of the "Patent Box", in addition to prior year taxes and other minor items for Euro 0.5 million.

The reconciliation between the theoretical and actual rate is shown below:

	2025	2024
Profit before taxes	738	36,715
Income tax rate	24%	24%
THEORETICAL IRES	(177)	(8,812)
Effect of differences between Italian and foreign tax rates Permanent tax differences effect Tax effect on BasicNet gain Effect of write-down of BPA foreign tax credits (for liquidation) Prior year taxes Patent Box benefit IRAP	(623) (720) (2,421) (1,817) (473) 838 (1,198)	(358) (904) - - (170) 1,717 (1,677)
WHT reversal/write-down (including BPA) Other changes	(1,836) (21)	(1,190) (58)
EFFECTIVE TAX CHARGE Effective tax rate	(8,448) -1145.2%	(11,451) -31.2%
TOTAL EFFECTIVE TAX CHARGE	(8,448)	(11,451)

19. EARNINGS PER SHARE

The basic earnings per share, for 2025, is calculated dividing the net result attributable to the shareholders of the Group by the weighted average number of ordinary shares outstanding during the year:

(In Euro)	FY 2025	FY 2024
Net result	(7,710,972)	25,263,988
Weighted average number of ordinary shares	46,414,184	47,185,500

Basic earnings per ordinary share	(0.1661)	0.5354
Diluted earnings per ordinary share	(0.1654)	0.5354

At December 31, 2025, the potentially dilutive effect is exclusively related to the Stock Grant plan for some employees of the Group, as referred to in Note 33.

The change in the weighted average number of ordinary shares outstanding between 2025 and 2024 is mainly attributable to the number of treasury shares acquired in the year, partially offset by the utilisation of shares held in portfolio as part of the corporate transactions described in Note 6.

EXPLANATORY NOTES TO THE BALANCE SHEET

20. INTANGIBLE ASSETS

	December 31, 2025 December 31, 2024		Changes
Concessions, brands and similar rights	98,766	59,696	39,070
Software development	7,072	5,829	1,243
Other intangible assets	11,592	6,245	5,347
Industrial patents	69	64	5
Total intangible assets	117,498	71,834	45,665

The changes in the original costs of the intangible assets were as follows:

	Concessions, brands &	Software	Other	Industrial patents
	and similar rights	development	intangible assets		Total
Historic cost at 1.1.2024	72,645	55,281	15,583	839	144,348
Investments	289	3,378	2,897	12	6,576
Disposals & other changes	-	(3)	(32)	-	(35)
Historic cost at 31.12.2024	72,934	58,656	18,448	851	150,889
Investments	18,275	3,912	3,272	10	25,470
Acquisition of Normandy	-	-	808	-	808
Acquisition of Woolrich	-	8,346	11,372	-	19,717
Acquisition of Sundek	27,595	1,681	2,163	-	31,439
Disposals & other changes	-	(13)	(348)	-	(361)
Historic cost at 31.12.2025	118,804	72,583	35,714	861	227,962

The changes in the relative accumulated amortisation provisions were as follows:

	Concessions, brands &	Software	Other	Industrial patents
	and similar rights	development	intangible assets		Total
Acc. Amort. at 1.1.2024	(12,873)	(50,193)	(11,199)	(793)	(75,058)
Amortisation	(366)	(2,645)	(1,002)	(17)	(4,029)
Disposals and other changes	-	11	(2)	22	31
Acc. Amort. at 31.12.2024	(13,239)	(52,827)	(12,203)	(788)	(79,056)
Amortisation	(6,800)	(2,993)	(1,294)	(21)	(11,108)
Acc. Amort. Normandy	-	-	(297)	-	(297)
Woolrich accumulated amort.	-	(8,340)	(9,053)	-	(17,393)
Sundek accumulated amort.	-	(1,364)	(1,523)	-	(2,887)
Disposals and other changes	-	13	248	16	277
Acc. Amort. at 31.12.2025	(20,039)	(65,511)	(24,122)	(793)	(110,465)

	Concessions, brands & and similar rights	Software development	Other intangible assets	Industrial patents	Total
Closing net book value at 1.1.2024	59,772	5,087	4,384	47	69,290
Investments	289	3,378	2,897	12	6,576
Disposals and other changes	-	8	(34)	22	(4)
Amortisation	(366)	(2,645)	(1,002)	(17)	(4,029)
Closing net book value at 31.12.2024	59,696	5,829	6,245	64	71,834
Investments and other changes	18,275	3,912	3,272	10	25,470
Acquisition of Normandy	-	-	511	-	511
Acquisition of Woolrich	-	6	2,318	-	2,324
Acquisition of Sundek	27,595	317	640	-	28,552
Disposals and other changes	-	1	(100)	16	(84)
Amortisation	(6,800)	(2,993)	(1,294)	(21)	(11,108)
Closing net book value at 31.12.2025	98,765	7,072	11,592	69	117,498

The net book value of intangible assets is reported below:

The increase in "concessions, brands and similar rights" is due to the acquisition of the Woolrich brand and the consolidation of Sundek S.p.A., as well as the capitalisation of costs incurred for the registration of trademarks in new countries, for renewals and extensions and for the purchase of software licenses. Amortisation in the period concerns the Jesus Jeans brand, amortised over 20 years, as not yet reaching a market positioning equal to that of the principal brands.

At December 31, 2025, the Kappa and Robe di Kappa brands report a book value of Euro 15.3 million, the Superga brand a book value of Euro 21.3 million; the K-Way brand Euro 9.4 million, the Sabago brand Euro 12.1 million, Briko brand Euro 0.9 million, the Woolrich brand Euro 11.6 million and the Sundek brand Euro 27.5 million. The Kappa, Robe di Kappa, Superga, K-Way, Briko, Sebago, Woolrich and Sundek brands are considered intangible assets with indefinite useful life and as such are subject to an impairment test at least annually.

At December 31, 2025 in application of the provisions of IAS 36 on impairment testing, the Group has conducted all the checks on any permanent impairment of corporate brands and related CGU's.

For the purposes of the impairment test of the BasicNet Group at consolidated level, the CGU's were identified as the brands of the company.

The verification of the reduction in the loss in value (impairment test) of the indefinite useful life assets, among which brands and goodwill, allocated to each CGU was carried out comparing the carrying amount with the respective recoverable value. The recoverable value was determined discounting the expected net cash flows allocated to each CGU (value in use). The key assumptions utilised for the calculation principally refer to:

the estimate of the future net cash flows of each CGU is based on the plans approved by the Board of Directors and on reasonable and sustainable assumptions, with respect to future and historical cash flows;
the terminal value, equal to the value of the cash flows at the end of the explicit time period, is calculated assuming a perpetual growth rate of 2.0% (2.0% in 2024);

the discounting of the weighed average cost of capital (WACC) of 7.9% (8.3% in 2024).

Following the impairment test no write-down is required of the book value of the brands or the goodwill. The value in use of the CGUs thus determined are significantly higher than their carrying amount: in particular, the sensitivity analyses carried out against this backdrop confirmed the full recoverability of the values even in the event of significant reductions in expected cash flows or a significant increase in discount rates. Similarly, the development of alternative scenarios involving an increase in the principal production sources, reflecting the current degree of uncertainty about future economic prospects, also revealed the presence of significant headroom for all CGUs.

The assets acquired in the corporate transactions referred to in Note 6 were not subjected to impairment tests, as the related acquisitions were completed near the end of the financial year and in the absence of indicators of permanent loss in value.

The account "software development" increased Euro 3.9 million for investments and decreased Euro 3.0 million for amortisation in the year.

The account "other intangible assets" principally includes improvements related to the franchising project and recorded investments of Euro 3.3 million and amortisation of Euro 1.2 million.

21. RIGHTS-OF-USE

The Group utilises the exceptions under the standard on leasing contracts which have a duration of equal to or less than 12 months and which do not contain a purchase option ("short-term leasing") and on leases whose underlying asset is of a low value ("low value asset").

	December 31, 2025 December 31, 2024	Changes
Rights-of-use	100,191	41,871	58,320
Total right-of-use	100,191	41,871	58,320

The changes in the original cost of the right-of-use were as follows:

	2025	2024
Historical cost at 01.01	89,638	74,321
Investments and increases ISTAT	25,058	15,443
Acquisition of Normandy	745	-
Acquisition of Woolrich	37,848	-
Acquisition of Sundek	8,298	-
Acquisition of Sebago France	1,030	-
Disposals and other changes	(2,081)	(127)
Historical cost at 31.12	160,537	89,638

The changes in the relative accumulated depreciation provisions were as follows:

	2025	2024
Accum. Deprec. at 01.01	(47,766)	(38,421)
Depreciation	(12,579)	(9,350)
Disposals and other changes	-	5
Accum. Deprec. at 31.12	(60,345)	(47,766)

	2025	2024
Net book value at 01.01	41,871	35,900
Investments and increases ISTAT	25,058	15,443
Acquisition of Normandy	745	-
Acquisition of Woolrich	37,848	-
Acquisition of Sundek	8,298	-
Acquisition of Sebago France	1,030	-
Disposals and other changes	(2,081)	(122)
Depreciation	(12,579)	(9,350)
Net book value at 31.12	100,191	41,871

The movements in the net book value of the right-of-use is shown below:

22. GOODWILL

	December 31, 2025 December 31, 2024	Changes
Goodwill	107,947	43,719	64,228
Goodwill	107,947	43,719	64,228

"Goodwill" includes:

the goodwill from the initial consolidation of K-Way France (Euro 24.5 million);
the goodwill arising on the business combination with the Spanish licensee (Euro 6.7 million) and the French licensee (Euro 1.2 million), of the Kappa brand;
the goodwill following the acquisition of the French Group Kappa France (Euro 3.4 million);
the goodwill of Euro 7.8 million for K-Way France;
acquisition of a franchise of K-Way France in Normandy Euro 2.1 million;
acquisition of Sebago France Euro 4.1 million, of which Euro 2.1 million refers to key money;
acquisition Woolrich Euro 50.7 million;
acquisition Sundek Euro 6.5 million;
the amounts paid to acquire retail businesses for Euro 8.7 million.

The Group verifies the recovery of the goodwill at least on an annual basis or more frequently when there is an indication of a loss in value. For the purposes of the impairment test the goodwill is allocated to the lowest cash-generating unit. See Note 20 on the checks carried out as at December 31, 2025.

23. PROPERTY, PLANT AND EQUIPMENT

	December 31, 2025 December 31, 2024		Changes
Property	38,701	39,781	(1,079)
Furniture and other assets	17,904	11,676	6,228
Plant & machinery	3,327	3,286	42
EDP	1,935	1,769	166
Industrial & commercial equipment	519	252	267
Total property, plant and equipment	62,386	56,763	5,623

		Furniture		EDP	Industrial &
	Property	and other assets	Plant & machinery		commercial equipment	Total
Historic cost at 1.1.2024	61,693	30,985	6,950	18,452	1,419	119,499
Investments	2,362	2,967	428	1,111	117	6,985
Disposals and other changes	-	(878)	(2)	(365)	-	(1,245)
Historic cost at 31.12.2024	64,055	33,074	7,376	19,197	1,537	125,238
Investments	203	4,155	360	1,002	86	5,804
Acquisition of Normandy	-	162	-	62	-	224
Acquisition of Woolrich	-	6,156	1,581	812	682	9,232
Acquisition of Sundek	-	4,965	950	289	168	6,373
Acquisition of Sebago France	-	99	-	1	242	343
Disposals and other changes	-	(525)	(231)	(336)	-	(1,092)
Historic cost at 31.12.2025	64,257	48,087	10,036	21,027	2,715	146,122

The changes in the historical cost of property, plant and equipment were as follows:

The changes in the relative accumulated depreciation provisions were as follows:

	Property	Furniture and other assets	Plant & machinery	EDP	Industrial & commercial equipment	Total
Acc. Deprec. at 1.1.2024	(22,453)	(20,082)	(3,470)	(16,904)	(1,218)	(64,128)
Depreciation	(1,821)	(2,086)	(620)	(802)	(66)	(5,396)
Disposals and other changes	-	770	-	279	-	1,049
Acc. Deprec. at 31.12.2024	(24,274)	(21,399)	(4,090)	(17,428)	(1,284)	(68,475)
Depreciation	(1,644)	(2,313)	(680)	(875)	(75)	(5,588)
Normandy accumulated deprec.	-	(83)	-	(34)	-	(116)
Woolrich accumulated deprec.	-	(3,885)	(1,345)	(709)	(618)	(6,557)
Sundek accumulated deprec.	-	(2,976)	(715)	(221)	(149)	(4,096)
Sebago France accumulated deprec.	-	(41)	-	-	(69)	(111)
Disposals and other changes	363	513	157	174	-	1,206
Acc. Deprec. at 31.12.2025	(25,556)	(30,183)	(6,709)	(19,092)	(2,196)	(87,736)

		Furniture and other	Plant &	EDP	Industrial & commercial
	Property	assets	machinery		equipment	Total
Net book value at 1.1.2024	39,240	10,903	3,479	1,548	201	55,371
Investments	2,362	2,967	428	1,111	117	6,985
Depreciation	(1,821)	(2,086)	(620)	(802)	(66)	(5,396)
Disposals and other changes	-	(108)	(1)	(87)	-	(196)
Net book value at 31.12.2024	39,781	11,676	3,286	1,769	252	56,763
Investments	203	4,155	360	1,002	86	5,804
Acquisition of Normandy	-	162	-	62	-	224
Acquisition of Woolrich	-	6,156	1,581	812	682	9,232
Acquisition of Sundek	-	4,965	950	289	168	6,373
Acquisition of Sebago France	-	99	-	1	242	343
Depreciation	(1,644)	(2,313)	(680)	(875)	(75)	(5,588)
Normandy accumulated deprec.	-	(83)	-	(34)	-	(116)
Woolrich accumulated deprec.	-	(3,885)	(1,345)	(709)	(618)	(6,557)
Sundek accumulated deprec.	-	(2,976)	(715)	(221)	(149)	(4,096)
Sebago France accumulated deprec.	-	(41)	-	-	(69)	(111)
Disposals and other changes	363	(13)	(74)	(162)	-	114
Net book value at 31.12.2025	38,701	17,904	3,327	1,935	519	62,386

The net book value of property, plant and equipment was as follow:

"Property" includes the value of the buildings at Strada della Cebrosa 106, Turin, headquarters of BasicItalia S.r.l. and at Largo Maurizio Vitale 1, Turin, headquarters of the Parent Company, adjacent buildings owned by Basic Village S.p.A. acquired in late 2016, and the property complex at Via dell'Aprica, No. 12 in Milan, owned by Aprica Costruzione S.r.l, Milan, a company which was acquired in January 2020, and merged into Basic Village S.p.A. in July 2020, to which the property at C.so Regio Parco, 33, Turin, was added, acquired in 2022 and the adjacent land to the building of Strada Cebrosa in Turin acquired in 2024.

Total gross investments in the year amounted to Euro 5.8 million, principally relating to the acquisition of furniture and EDP for the opening of new stores.

The net book value of property, plant and equipment acquired according to the finance lease formula is reported below:

	Net value at December 31, 2025	Net value at December 31, 2024
Furniture and other assets	-	-
EDP	225	303
Plant	-	-
Transport vehicles	52	73
Total	277	376

24. EQUITY INVESTMENTS AND OTHER FINANCIAL ASSETS

		December 31, 2025 December 31, 2024
Investments in:
- Other companies	-	10	(10)
Total investments	-	10	(10)
Receivables:
- Securities	50,103	-	50,103
Other receivables, guarantees	5,625	1,970	3,655
Total financial receivables	55,728	1,970	53,758
Total investments & other financial assets	55,728	1,980	53,748

"Securities" includes cash investments in the form of senior non-preferred bonds. Specifically, Euro 35.1 million refers to a private placement by Unicredit, maturing in April 2029 with a fixed yield of 3.10%, and Euro 15.0 million to foreign bonds placed by BNL, maturing in April 2028 with a fixed yield of 2.74%.

"Other receivables, guarantees" principally refer to deposits on real estate property.

25. INTERESTS IN JOINT VENTURES

	December 31, 2025 December 31, 2024	Changes
Investments in: - Joint ventures	-	175	(175)
Total investments in joint ventures	-	175	(175)

Investments in joint ventures at December 31, 2024, concerned the value of the investment in Fashion S.r.l., held 50%. The company owns the Sabelt brand. From January 1, 2014, this category of investment has been valued at equity, as per IFRS 11. The investment was sold on December 23, 2025.

26. DEFERRED TAX ASSETS

	December 31, 2025	December 31, 2024	Changes
Deferred tax assets	25,693	6,008	19,685
Total deferred tax assets	25,693	6,008	19,685

Deferred tax assets and liabilities are calculated on all the temporary differences arising between the book value in the consolidated financial statements and their assessable amount for tax purposes.

Reference should be made to Note 40 below for further details.

27. NET INVENTORIES

	December 31, 2025	December 31, 2024	Changes
Finished products and goods	168,654	112,104	56,550
Raw materials, ancillaries and consumables	-	71	(71)
Inventory obsolescence provision	(9,026)	(3,818)	(5,208)
Total net inventories	159,629	108,357	51,272

Finished inventories include goods in transit at the reporting date, which at December 31, 2025 amount to approx. Euro 23.7 million (Euro 26.8 million at December 31, 2024), and goods held at Group brand stores for Euro 29.3 million (Euro 14.5 million at December 31, 2024).

The increase in inventory reflects the combination of higher purchases of carry-over items within the never out of stock program, the expansion of the retail network and related inventories, the advancement of the purchasing calendar for the 2026 Spring Summer season and the inclusion of the newly acquired companies (Note 6).

Inventories are valued under the weighted average cost method and net of the obsolescence provision considered reasonable for a prudent valuation of inventories, which recorded the following changes during the year:

	2025	2024
Inventory obsolescence provision at 01.01	3,818	4,382
Initial acquisition balance	2,470	-
Provisions in the period	3,068	750
Utilisations	(330)	(1,314)
Inventory obsolescence provision at 31.12	9,026	3,818

28. TRADE RECEIVABLES

	December 31, 2025 December 31, 2024	Changes
Gross value Doubtful debt provision	108,311 (19,533)	103,475 (19,402)	4,837 (130)
Total trade receivables	88,779	84,073	4,706

"Trade receivables" refer for Euro 75.3 million to goods sold by proprietary licensees compared to Euro 78.4 million at December 31, 2024 against which a doubtful debt provision was recorded of approx. Euro 10.9 million (Euro 9 million at December 31, 2024) and for Euro 32.5 million to royalties and sourcing commissions (Euro 24.4 million at December 31, 2024) against which a doubtful debt provision was recorded of Euro 8.6 million (Euro 10.4 million at December 31, 2024).

The receivables are aligned with their expected realisable value through a doubtful debt provision based on estimated losses on all trade receivables and includes a component calculated on specific disputed and/or past-due positions and a residual component calculated by a statistical approach.

The movements during the year were as follows:

	2025	2024
Doubtful debt provision at 01.01	19,402	22,245
Initial acquisition balance	1,741	-
Provisions in the period	4,227	5,099
Utilisations	(5,596)	(7,333)
Release	(241)	(609)
Doubtful debt provision at 31.12	19,533	19,402

The utilisations of the provision are related to the write off of long outstanding amounts and are made when the legal documentation of the loss has been received. Provisions are made based on an examination of individual credit positions and the estimation of expected losses also based on statistical and parametric elements. Overdue receivables not written down are generally recovered in the period immediately after the maturity date and in any case are subject to specific recoverability evaluations.

29. OTHER CURRENT ASSETS

	December 31, 2025	December 31, 2024	Changes
Tax receivables	17,278	7,436	9,841
Securities	40,000	-	40,000
Other receivables	4,129	3,549	580
Total other current assets	61,407	10,985	50,868

Current "tax receivables" principally relate to withholding taxes on royalties for Euro 4.1 million, VAT receivables for Euro 8.6 million, IRES and IRAP receivables of Euro 1.8 million, in addition to minor amounts.

"Securities" includes temporary cash investments, maturing within the year and readily liquidated. Specifically, a deposit certificate issued by BNL for Euro 15.0 million, with an annual yield of 2.70% and maturity in April 2026, and a time deposit at Banco BPM for Euro 25.0 million, with an annual yield equal to Euribor plus 5 basis points, maturing in April 2026.

"Other receivables" mainly includes advances to suppliers and sundry receivables. The account also includes the premium paid to the insurance company against Directors Termination Indemnities, to be paid to the Chairman of the Board of Directors, as approved by the Board of Directors on April 17, 2025, on the indication of the Shareholders' AGM and the proposal of the Remuneration Committee and with the favourable opinion of the Board of Statutory Auditors, on conclusion of his role for Euro 1.5 million.

30. PREPAYMENTS

	December 31, 2025 December 31, 2024		Changes
Sponsorship and media	8,099	3,571	4,527
Expenses pertaining to future collections	-	5	(5)
Others	11,577	7,068	4,509
Total prepayments	19,676	10,645	9,031

The "sponsorship costs" relate to the annual amount contractually defined by the parties, which is partially invoiced in advance during the sports season, compared to the timing of the services.

The "other prepayments" include various costs for samples, services, utilities, insurance and other minor amounts incurred by the companies of the Group.

31. CASH AND CASH EQUIVALENTS

	December 31, 2025 December 31, 2024		Changes
Bank and postal deposits	50,754	28,057	22,697
Cash in hand and similar	384	138	246
Total cash and cash equivalents	51,138	28,195	22,943

"Bank deposits" refer to temporary current account balances principally due to receipts from clients. In particular, they are held at: K-Way S.p.A. (Euro 22.0 million), K-Way France S.a.s. (Euro 5.5 million), companies of the Kappa France Group (Euro 4.4 million), Woolrich Europe S.p.A. (Euro 3.9 million), BasicNet S.p.A. (Euro 2.8 million), Basic Properties America, Inc. (Euro 2.2 million), Kappa S.r.l. (Euro 2.1 million), Sebago S.r.l. (Euro 1.4 million), Kappa Sport Iberia S.L. (Euro 1.3 million), K-WayRetail S.r.l. (Euro 1.0 million), Sebago France S.a.s. (Euro 0.9 million), Sundek S.p.A. (Euro 0.6 million), GLD Brands Ltd. (Euro 0.5 million), K-Way Retail Suisse S.A. (Euro 0.5 million ) and for the difference at the other Group companies (Euro 2.0 million).

32. DERIVATIVE FINANCIAL INSTRUMENTS

	December 31, 2025 December 31, 2024		Changes
Derivative financial instruments	105	3,101	(2,996)
Total	105	3,101	(2,996)

Reference should be made to Note 46 below for further details.

33. SHAREHOLDERS' EQUITY

	December 31, 2025 December 31, 2024		Changes
Share capital	31,717	31,717	-
Treasury shares	(32,000)	(30,861)	(1,139)
Other reserves	330,138	144,226	185,912
Net Profit	(7,711)	25,264	(32,975)
Total Shareholders' Equity	322,144	170,346	151,799

The "share capital" of the Parent Company, amounting to Euro 31,716,673.04, is divided into 54,000,000 fully paid-in ordinary shares without par value.

In April, as approved by the Shareholders' Meeting of BasicNet S.p.A. of April 17, 2025, in relation to the allocation of the 2024 net profit, a dividend of Euro 0.16 per share was distributed to each of the ordinary shares in circulation, for a total pay-out of approx. Euro 7.4 million.

During the year 1,926,465 treasury shares were acquired in accordance with Shareholders' Meetings motions and 2,585,965 shares were sold for the acquisition of new brands, resulting in a total of 6,155,000 shares held at December 31, 2025 (11.3981% of the Share Capital).

The account "other reserves" comprises:

-The "cash flow hedge reserve", negative for Euro 3.5 million, changed in the year due to the fair value measurement of cash flow hedges held at December 31, 2025;
the "re-measurement reserve for defined benefit plans (IAS 19)", positive for Euro 26 thousand, refers to the changes in the actuarial gains/losses ("re-measurement"). The valuation is shown net of the tax effect;
the "re-measurement reserve for employee defined benefit plans (IAS 37)" refers to the changes in the actuarial gains/losses ("re-measurement"). The valuation is shown net of the tax effect. This reserve, a positive Euro 226 thousand, is unavailable;
the "currency conversion reserve", positive for Euro 1.9 million, entirely concerns conversion differences into Euro of the financial statements of the US, Asian, Swiss and English subsidiaries;
the "reserve for share-based payment to employees (IFRS 2)" established in 2025 refers to the 2024-2027 Stock Grant Plan for directors and employees of the Company or other Group companies and amounted to Euro 554 thousand at December 31, 2025;
the "retained earnings" amounting to Euro 157.8 million, an increase of approx. Euro 17.8 million compared to the end of 2024.
"Other reserves" includes Euro 170.4 million due to the increase in shareholders' equity resulting from the sale of 40% of the holding in K-Way (referred to in Note 6).

The reconciliation at December 31, 2025 between the net equity and net result of the Parent Company and the net equity and consolidated net result of the Group is reported in the Directors' Report.

The other gains and losses recorded directly to equity in accordance with IAS 1 – Presentation of financial statements are reported below.

	December 31, 2025	December 31, 2024	Changes
Effective part of the Gains/(losses) on cash flow instruments generated in the period (currency hedges)	(6,030)	1,366	(7,396)
Effective part of the Gains/(losses) on cash flow instruments generated in the period (interest rate hedges)	(114)	(234)	121
Effective part of the Gains/losses on cash flow hedge instruments	(6,143)	1,132	(7,275)
Remeasurement of the agents indemnity provision (IAS37) (*)	(217)	267	(484)
Re-measurement of defined benefit plans (IAS 19) (*)	15	(156)	171
Gains/(losses) from translation of accounts of foreign subsidiaries	(598)	1,241	(1,839)
Reserve for share-based payments to employees (IFRS 2)	554	-	554
Tax effect relating to the Other items of the comprehensive income statement	1,362	(349)	1,711
Total other gains/(losses), net of tax effect	(5,028)	2,134	(7,162)

(*) items which may not be reclassified to the profit and loss account

The tax effect relating to Other gains/(losses) is as follows:

	December 31, 2025		December 31, 2024
	Gross value	Tax effect	Net value	Gross value	Tax effect	Net value
Effective part of Gains/losses on cash flow hedge instruments	(6,030)	1,286	(4,744)	1,366	(379)	987
Effective part of the Gains/(losses) on cash flow instruments generated in the year (interest rate hedges)	(114)	27	(86)	(234)	56	(178)
Remeasurement of the agents indemnity provision (IAS37) (*)	(217)	52	(165)	267	(64)	203
Remeasurement gains/(losses) Employee defined benefit plans (IAS 19) (*)	15	(3)	11	(156)	38	(119)
Reserve for share-based payments to employees (IFRS 2)	554	-	554	-	-	-
Gains/(losses) from translation of accounts of foreign subsidiaries	(598)	-	(598)	1,241	-	1,241
Total other gains/(losses), net of tax effect	(6,390)	1,362	(5,028)	2,483	(349)	2,134

(*) items which may not be reclassified to the profit and loss account

34. PROVISIONS FOR RISKS AND CHARGES

	December 31, 2025 December 31, 2024		Changes
Provisions for risks and charges	5,790	2,440	3,350
Total provisions for risks and charges	5,790	2,440	3,350

The provision for risks and charges relates to the Agents Termination Indemnity Provision (FIRR), the Agents Supplementary Indemnity Provision (FISC), and the provisions for commercial disputes and disputes with the licensee network.

The increase for the period refers mainly to the consolidation of the newly acquired companies for euro 2.1 million (Note 6).

35. LOANS

The changes in the loans during the year are shown below:

					Short-term	Medium /long-term
		31/12/2024 Repayments New loans 31/12/2025			portion	portion
Banco BPM Mortgage Loan (Real Estate)	24,413	(24,413)	-	-	-	-
Banco BPM Unsecured Loan (Kappa Japan brand)	2,625	(1,500)	-	1,125	1,125	-
FCG Loan L.662/96 (BasicNet)	2,406	(1,375)	-	1,031	1,031	-
FCG Loan L.662/96 (BasicItalia)	2,406	(1,375)	-	1,031	1,031	-
FCG Loan L.662/96 (K-WayRetail)	1,925	(1,925)	-	-	-	-
FCG Loan L.662/96 (Kappa Japan brand)	2,750	(1,375)	-	1,375	1,375	-
BNL "Mini-Mortgage" (BasicNet)	-	-	10,000	10,000	-	10,000
Unicredit BasicNet (Woolrich) Line A Loan	-	-	58,000	58,000	3,412	54,588
Unicredit Tow (Woolrich) Line B Loan	-	-	12,000	12,000	-	12,000
Unsecured BPM (Woolrich) loan	-	-	512	512	409	103
MPS-Intesa Sundek Loan - Line A	-	-	1,646	1,646	1,646	-
Sundek Intesa Loan (Covid)	-	-	477	477	477	-
Sundek MPS Loan (Covid)	-	-	319	319	319	-
MPS-Intesa Sundek Loan - Line B	-	-	8,500	8,500	8,500	-
Sundek Unicredit Loan (SACE)	-	-	1,500	1,500	500	1,000
Sundek SIMEST 60540 Loan	-	-	416	416	119	297
Sundek SIMEST 902604 Loan	-	-	68	68	-	68
BPI KE loan	334	(333)	-	1	-	1
Abanca "Covid-19" subsidised loan	34	(34)	-	-	-	-
KSI "Covid-19" subsidised loan	48	(48)	-	-	-	-
BNP Loan – La Baule	200	(200)	-	-	-	-
BPI Loan – La Baule	229	(229)	-	-	-	-
HSBC Loan – Montpellier	111	(111)	-	-	-	-
BNP Loan – Nice	177	(177)	-	-	-	-
SGE Loan – Lyon	103	(103)	-	-	-	-
SGE Loan – Temple (restructuring)	16	(16)	-	-	-	-
SGE Loan – Biarritz	99	(99)	-	-	-	-
BPI Loan – Biarritz	75	(75)	-	-	-	-
BNP Loan – PGE	167	(167)	-	-	-	-
HSBC Loan – PGE	112	(112)	-	-	-	-
SGE Loan – PGE	112	(113)	-	(1)	-	(1)
BNP – Lyon	794	(794)		-	-	-
Balance	39,136	(34,575)	93,437	98,000	19,944	78,056

		December 31, 2025 December 31, 2024
Medium/long term loans:
- due within 5 years - due beyond 5 years	75,874 2,182	22,410 5,513	53,464 (3,331)
Total medium/long-term loans	78,056	27,922	50,134
Finance lease payables	177	284	(106)
Total leasing payables (maturity within 5 years)	177	284	(106)
Total loans	78,233	28,206	50,027

The maturity of the long-term portion of loans is highlighted below:

The "Banco BPM Mortgage" was disbursed in September 2022 for Euro 31.5 million and has a ten-year duration, repayable in quarterly instalments. The variable rate, equal to the quarterly Euribor +150 points, was hedged for 30% of the notional amount at a fixed rate of 3.52%. The loan, secured by a first level mortgage on the BasicVillage in Turin and the adjacent property, the BasicVillage in Milan, and the property on Strada Cebrosa, made it possible to fully refinance the debt arising from the Group's real estate operations. The loan was paid off in advance during the period under review.

The "BPM Banco Unsecured Loan" was issued in September 2020 for Euro 6 million and is of six-year duration, repayable in quarterly instalments from December 2022 at a quarterly Euribor rate plus 135 basis points (Note 46). The loan funded Basic Trademark's purchase of the Kappa Japan brand (now Kappa S.r.l.). No financial covenants are stipulated, although the maintenance of a number of ownership conditions are required concerning BasicNet S.p.A., in particular that the overall investment (direct or indirect) of BasicWorld S.r.l. in BasicNet S.p.A. should not reduce below 30%, in addition to the constraint of maintaining the Group's total shareholding in Kappa.

For the loans disbursed in 2020 under the SMEs Guarantee Fund, the following should be noted:

1. BasicNet: Intesa loan in October 2020 disbursed for Euro 5.5 million; it has a six-year term, repayable in quarterly instalments, starting from December 2022, at a fixed rate. The contractual terms provide that the use of the related cash is restricted to the payment of suppliers for the purchase of services and salaries to employees. The Fund's guarantee covers 90% of the amount disbursed;
1. BasicItalia: Intesa loan in October 2020 disbursed for Euro 5.5 million; it has a six-year term, repayable in quarterly instalments, starting from December 2022, at a fixed rate. The contractual terms provide that the use of the related cash is restricted to the payment of suppliers for the purchase of services and salaries to employees. The Fund's guarantee covers 90% of the amount disbursed; The financing is backed by an additional guarantee from BasicNet;
1. K-WayRetail: BPM Banco Loan issued in September 2020 for Euro 5.5 million (initially issued to BasicRetail and transferred to K-WayRetail); and is of six-year duration, repayable in quarterly instalments from December 2021 at a quarterly Euribor rate plus 110 basis points (Note 46). The contractual terms provide that the use of the related cash is restricted to the payment of suppliers for the purchase of services and goods and salaries to employees. The Fund's guarantee covers 90% of the amount disbursed; The loan was paid off in advance within the scope of the transaction to give Permira access to K-Way share capital (Note 6), together with the residual balances of medium and long-term financing obtained in previous years by K-Way France to support development of the retail network;
1. Kappa: BPM Banco Loan issued in October 2020 for Euro 5.5 million and is of six-year duration, repayable in quarterly instalments from January 2023 at a quarterly Euribor rate plus 125 basis points (Note 46). The contractual terms provided that the use of the relative liquidity was tied to the purchase of the Kappa Japan brand. The Fund's guarantee covers 90% of the amount disbursed;

The BNL mini-loan was disbursed in July for a total of Euro 10.0 million at a variable rate equal to the Euribor 6-month rate plus 75 basis points. It has a two-year term with a 12-month grace period and half-yearly instalments in arrears.

Within the scope of the acquisition of the Woolrich® brand and the shares in Woolrich Europe S.p.A. (Note 6), the Group secured financial support from UniCredit in the form of:

1. an unsecured loan totalling Euro 58.0 million, disbursed to BasicNet S.p.A., with a five-year term including a nine-month grace period, repayable in quarterly instalments in arrears, at a contractual rate of 3-month Euribor plus 100 basis points, with a margin ratchet mechanism and covenants binding on the Group with respect to the incurrence of new debt, the provision of new guarantees, the purchase of treasury shares and the distribution of dividends. A portion of the proceeds was used to repay Woolrich Europe's outstanding debt at the closing date;
1. a secured loan (supported by a pledge over the shares of Tow and Woolrich Europe, together with a first demand guarantee provided by BasicNet S.p.A.) totalling Euro 12.0 million, with a seven-year term including an 18-month grace period, repayable in quarterly instalments in arrears, at a contractual rate of 3-month Euribor plus 135 basis points with a margin ratchet mechanism, with use restricted to the acquisition of the Woolrich brand;
1. a revolving credit facility of up to Euro 20.0 million granted to Woolrich Europe, with a three-year term, at a contractual rate of 1/3/6-month Euribor plus 60 basis points and a commitment fee equal to 35% of the margin. As of the reporting date, no drawdowns have been made under this facility.

Within the scope of the acquisition of the shares of Kickoff S.p.A. (subsequently renamed Sundek S.p.A., Note 6), the Group assumed within its consolidation scope the medium and long-term loans outstanding at the time, set out in detail in the table. In particular, the debt includes three facilities arranged on a club deal basis by Monte dei Paschi di Siena and Intesa Sanpaolo:

1. facility A: an amortising loan with semi-annual instalments, original principal of Euro 8.5 million and outstanding debt of Euro 1.6 million, at a variable rate of 6-month Euribor plus 290 basis points;
1. facility B: a loan originally structured as bullet, now payable in semi-annual instalments with the first repayment in December 2027, for a total of Euro 8.5 million fully outstanding and maturing in December 2030, at a contractual rate of 6-month Euribor plus 340 basis points;
1. a revolving credit facility of up to Euro 3.0 million, fully drawn down.

BasicNet has also stepped into the selling party's position with respect to the obligations towards the lending banks arising from the existing loan agreements, including a security guarantee over the shares of Sundek S.p.A., a personal guarantee provided by BasicNet S.p.A. in place of the previous shareholder, and a series of covenants relating to the minimum liquidity of the acquired company. The renegotiation of the existing financial debt, whose contractual obligations would not be met in light of the 2025 results, with the same credit institutions is currently underway and is expected to be completed by the first half of 2026, in order to align the conditions and maturity with the Group standards. Due to non-compliance with the financial covenants, the payable related to line A, line B, and the revolving line above is classified to bank payables due within one year.

At December 31, 2025, the credit lines available from the banking system (bank overdrafts, commercial advances, medium/long-term loans, import financing, leasing and letters of credit), amount to Euro 622.3 million, broken down as follows:

(in Euro millions)	December 31, 2025	December 31, 2024
Cash facility	373.9	290.3
Factoring	20.7	12.7
Letters of credit and swaps	40.7	42.4
Medium/long term loans	186.0	39.1
Equipment leasing	1.0	2.5
Total	622.3	387.0

The average interest paid for the BasicNet Group in the year is reported in Note 36 below.

36. BANK LOANS

	December 31, 2025 December 31, 2024	Changes
Bank payables due within one year:
- short-term portion of medium/long-term loans	19,944	11,214	8,730
- bank overdrafts and bills	91,208	50,838	40,371
- import advances	26,266	28,729	(2,463)
Total bank payables	137,418	90,780	46,637

The portion of medium/long-term loans due within one year is included under short-term bank debt as described in Note 35.

The changes in the financial position are commented upon in the Directors' Report. Interest due matured at the end of the year on short and medium/long-term loans is reported in the account "bank payables".

Cash advances refer to temporary utilisation by the Parent Company BasicNet S.p.A., for Group treasury needs.

The financial debt by interest rate at December 31, 2025 is as follows:

	Interest Rate
	Fixed	Variable	Total
Short-term	5,090	132,327	137,418
Medium/long term	468	77,765	78,233
Total	5,558	210,093	215,651

The average interest rate on medium/long term loans was 3.28%.

37. PAYABLES FOR RIGHT-OF-USE

	December 31, 2025	December 31, 2024	Changes
Payables for rights-of-use	56,875	43,080	13,795
Payables for rights-of-use Normandy	769	-	769
Payables for rights-of-use Woolrich	35,785	-	35,785
Payables for rights-of-use Sundek	8,298	-	8,298
Payables for right-of-use Sebago France	870	-	870
Total payables for right-of-use	102,597	43,080	59,517

Movements in the account are detailed below:

(in Euro millions)	FY 2025	FY 2024
Opening balance	43.1	36.8
New contracts	20.8	10.7
Acquisition of Woolrich	35.8	-
Acquisition of Sundek	8.3	-
Acquisition of Sebago France	0.9	-
Renewals	5.0	5.1
ISTAT changes	0.9	0.7
Payments	(11.4)	(9.0)
Corrections, withdrawals and other changes	(0.8)	(1.1)
Closing balance	102.6	43.1
of which: within 12 months	22.8	9.7
of which beyond 12 months	79.8	33.4

38. OTHER FINANCIAL PAYABLES

	December 31, 2025	December 31, 2024	Changes
Other financial payables	7,000	6,432	568
Other financial payables	7,000	6,432	568

Other financial payables include: Euro 4.0 million for the present value of the non-current portion of the variable price component (earnout) payable in connection with the acquisition of the Sundek brand; Euro 2.0 million for the non-current portion of the variable price component (earnout) payable in connection with the acquisition of the Woolrich brand; and Euro 1.0 million for the non-current portion of the variable price component (earnout) payable in connection with the acquisition of Sebago France. At December 31, 2024, the portion due beyond one year of the variable component ("earn-out") of the price to be paid for the acquisition of K-Way France was included. The residual portion of the payable is fully due within one year and amounts to Euro 5.3 million and is classified to Other current liabilities (Note 44).

39. EMPLOYEE AND DIRECTOR BENEFITS

The account includes the post-employment benefits for employees of Euro 5.9 million and the termination indemnities of Directors of Euro 0.3 million.

	December 31, 2025			December 31, 2024
	Defined benefit plans	Defined contrib. plans	Total	Defined benefit plans	Defined contrib. plans	Total
Change in the balance sheet:
Net liabilities recognized at begin. of year	2,871	-	2,871	2,717	-	2,717
Change in consolidation scope	-	-	-	-	-	-
Interest	92	-	92	90	-	90
Pension cost, net of withholdings	116	645	761	85	1,517	1,602
Benefits paid	(364)	-	(364)	(177)	-	(177)
Payments to the INPS treasury fund	-	(489)	(489)	-	(1,185)	(1,185)
Payments to other supp. pension fund	-	(156)	(156)	-	(332)	(332)
Actuarial profits/(losses)	(15)	-	(15)	156	-	156
Net liabilities recognised in the accounts	2,699	-	2,699	2,871	-	2,871
Change in the income statement:
Interest	92	-	92	90	-	90
Pension Cost	116	645	761	85	1,517	1,602
Total charges/(income) for post-employment benefits	207	645	853	175	1,517	1,692

The changes in the year of the post-employment benefit liability were as follows:

The account "defined benefit plans" includes the present value of the liabilities in the Italian companies of the Group towards employees in accordance with Article 2120 of the Civil Code. Based on the regulatory changes in 2007, the sums matured prior to January 1, 2007 to employees are recognised as defined benefit plans in accordance with IAS 19 – Employee benefits; those matured subsequent to this date are on the other hand recognised as defined contribution plans in accordance with the same standard.

Within the Group there are no other defined benefit plans.

The actuarial valuation of the Post-Employment Benefit is prepared based on the "matured benefits" method through the Projected Unit Credit Method in accordance with IAS 19. Under this method the valuation is based on the average present value of the pension obligations matured based on the employment service up to the time of the valuation, without projecting the remuneration of the employee in accordance with the regulatory modifications introduced by the Pension Reform.

The revaluations of the amounts at the option date for all of the companies and the benefits matured and not allocated to complementary pension schemes for businesses with less than 50 employees are recorded under post-employment benefit. In accordance with IAS 19, this provision was recorded as a "Defined benefit plans". The actuarial model for the measurement of the post-employment benefit is based on various assumptions of a demographic and financial nature.

The sensitivity analysis carried out on the basis of the following variables: 1) inflation rate +0.25%/-0.25%, 2) discount rate +0.25%/-0.25%, 3) turnover rate +1%/-1% shows non-material impacts of less than Euro 50 thousand.

The principal assumptions of the model concerning the actuarial valuations relating to personnel costs are:

	December 31, 2025	December 31, 2024
discount rate	3.69%	3.41%
inflation rate:	2.00%	2.00%
annual increase in post-employment benefit	3.00%	3.00%
annual increase in salaries	1.00%	1.00%
turnover rate	7.50%	7.50%

The change in the annual discount rate reflects the change in the yields of the "corporate bonds" of the basket utilised (Iboxx Eurozone Corporate) at the balance sheet date.

40. DEFERRED TAX LIABILITIES

	December 31, 2025 December 31, 2024	Changes
Deferred tax liabilities	14,793	9,507	5,286
Total deferred tax liabilities	14,793	9,507	5,286

The individual effects are reported in the table below:

	December 31, 2025			December 31, 2024
	Temporary differences	Rate % (*)	Tax effect	Temporary differences	Rate % (*)	Tax effect
Deferred tax assets:
- Excess doubtful debt provision not deductible	(10,904)	24.0%	(2,617)	(15,599)	24.8%	(3,845)
- Inventory obsolescence provision	(3,316)	28.9%	(960)	(2,650)	27.8%	(737)
- Provisions for stock grants	(554)	24.0%	(133)	-	-	-
- MBO provisions and exit fee	(1,227)	24.0%	(294)	-	-	-
- Misc. charges temporarily non deductible	(21,126)	24.4%	(5,160)	-	-	-
- Effect IAS 19 – Employee Benefits	(105)	26.4%	(28)	(61)	27.9%	(17)
- Effect IFRS 16 - lease payables	(6,647)	24.0%	(1,595)	(183)	29.0%	(53)
- Interest charges carried forward	(6,599)	24.0%	(1,584)	-	-	-
- Employee benefits	(3,595)	24.0%	(863)	-	-	-
- Write-down of LVR investment	(3,000)	24.0%	(720)	-	-	-
- Effect IFRS 39 - financial
instruments	(5,081)	24.9%	(1,264)	-	-	-
Total	(62,154)		(15,218)	(18,493)		(4,652)
Deferred tax liabilities:
Amortisation & depreciation tax basis	23,342	24.0%	6,512	19,167	28.0%	5,349
- Statutory-tax difference on amortisation, depreciation, and valuations	10,754	24.0%	3,023	11,520	28.1%	3,220
- Misc. charges temporarily non-deductible	1,690	24.0%	406	229	20.5%	47
- Effect IAS 37 – agents indemnity provision	298	29.6%	72	515	24.0%	124
- Effect IFRS 39 - financial instruments	-	-	-	3,053	22.8%	697
- Sundek brand	14,816	27.9%	4,134
- Amort. goodwill and other sundry	384	27.9%	107	384	27.9%	107
Total	51,284		14,254	34,869		9,544

Losses carried forward Past losses sub Woolrich Group	(2,217) (41,131)	25% 24%	(554) (9,872)	(5,570) -	25.0% -	(1,394) -
Undistributed profits/reserves	1,960	25%	490	-	-	-
Deferred tax liabilities (asset) net	(52,258)		(10,900)	10,806		3,498
Of which:
Deferred tax assets			25,693			6,008
Deferred tax liabilities			14,793			9,507

(*) Average tax rate

Deferred tax assets are recorded considering probable their recovery based on future profit expectations, and principally relate to non-deductible doubtful debt provisions (approx. Euro 2.6 million), various temporarily non-deductible expenses (approx. Euro 5.1 million, of which approx. Euro 1 million relates to write-downs of financial assets and exchange gains), in addition to Euro 9.8 million for prior tax losses attributable to the Woolrich Group.

Deferred tax liabilities principally refer to the tax effects deriving from the application of the IFRS international accounting standards, with particular reference to the accounting of amortisation on own brands solely for tax purposes (Euro 6.5 million), differences between statutory and fiscal amortisation (Euro 3 million) and to the Brand Sundek (Euro 4 million).

Deferred tax liabilities on temporary differences generated by undistributed earnings of subsidiaries, related entirely to the reserves of K-Way France, amount to Euro 0.5 million.

41. OTHER NON-CURRENT LIABILITIES

	December 31, 2025 December 31, 2024		Changes
Guarantee deposits	1,784	1,684	100
Total other non-current liabilities	1,784	1,684	100

The "guarantee deposits" include the guarantees received from licensees, to cover the minimum royalties guaranteed contractually.

42. TRADE PAYABLES

"Trade payables" are all payable in the short term and increased by approx. Euro 34.3 million compared to December 31, 2024, due to the inclusion of the newly acquired companies (Note 6) and the further advances on the procurement of goods during the last quarter compared to the same period of the previous year, in addition to the general reduction in purchases. At the date of these financial statements there are no initiatives for the suspension of supplies, payment injunctions or executive actions by creditors against BasicNet S.p.A. or other companies of the Group.

Trade payables are normally settled between 30 and 120 days. The book value of trade payables equates the relative fair value.

43. TAX PAYABLES

The breakdown of this account is shown in the following table:

	December 31, 2025	December 31, 2024	Changes
Tax payables:
IRES	(305)	850	(1,155)
Employee contributions	686	829	(143)
Group VAT	10,868	3,242	7,626
Other	1,173	333	840
Total tax payables	12,422	5,254	7,168

Current tax payables include provisions for IRES and IRAP to be settled at the reporting date.

	December 31, 2025	December 31, 2024	Changes
Payables for the purchase of equity investments	6,976	1,649	5,326
Payables to employees and directors	7,485	3,795	3,690
Social security institutions	4,942	3,277	1,665
Accrued expenses	1,691	1,408	283
Shareholder dividend account	3	3	-
Other payables	9,707	4,414	5,294
Total other current liabilities	30,804	14,546	16,258

44. OTHER CURRENT LIABILITIES

"Payables for the purchase of equity investments" includes the portion due within one year of the variable component ("earn-out") of the price based on the 2025 results, to be paid for the acquisition of K-Way France for Euro 5.3 million. They also include the Euro 1.7 million paid in February 2026 to the previous shareholder of Sebago France S.a.s. based on the final balance sheet figures at the closing date. This is an item of a financial nature, so it is included in the statement of Consolidated Net Financial Position in accordance with ESMA instructions.

The account "accrued expenses" principally includes deferred employee remuneration.

"Payables to employees and Directors" mainly concern salaries and expenses for reimbursement settled in the subsequent month.

"Other payables" at December 31, 2025 principally concern advances from customers, royalty payments on account from licensees (Euro 241 thousand) and other miscellaneous amounts.

45. DEFERRED INCOME

		December 31, 2025 December 31, 2024	Changes
Royalties	5,170	4,400	770
Sponsored goods revenues	4,689	3,778	911
Other deferred income	240	469	(229)
Total deferred income	10,100	8,648	1,452

The "sponsored goods revenues" relates to the invoicing of sponsored merchandise, which contractually partially refers to the period after the reporting date, with corresponding prepayments recorded under assets for sponsoring costs.

46. DERIVATIVE FINANCIAL INSTRUMENTS

		December 31, 2025 December 31, 2024	Changes
Derivative financial instruments	4,251	48	4,203
Total	4,251	48	4,203

The account includes the market value at December 31, 2025 of the currency hedge instruments on US Dollars (cash flow hedge), subscribed with primary credit institutions; the instruments utilised were acquired under forward and flexi term contracts which operate in the form of forward currency purchases on a portion of the estimated currency needs for the purchase of goods on foreign markets, to be made in 2026 and 2027, on the basis of the goods orders already sent to suppliers, or still to be made but included in the budget. At December 31, 2025, commitments were in place on estimated future purchases, for USD 92.32 million, broken down into 26 transactions with differing maturities: 12 transactions in the first half of 2026 (for USD 31.6 million), 5 transactions in the second half of 2026 (for USD 25.72 million), and 9 transactions in 2027 (for USD 35 million) at variable fixed exchange rates from USD/Euro 1.087 to USD/Euro 1.203. An equity reserve was recorded of approx. Euro 3.5 million, net of the tax effect. During 2025, forward purchase operations were utilised for approx. USD 16.65 million and the relative effects were recognised to the income statement.

In the case of the Interest Rate Swap (IRS) agreed by the Group, the specific hedge of the variable cash flow realised at market conditions, through the signing of the fix/flo IRS perfectly hedges the item to which the original cash flows stem, as in this case, and continues to be considered effective.

47. GUARANTEES GIVEN/COMMITMENTS

With reference to the guarantees and commitments of the Group with third parties reference should be made to Note 35.

We highlight:

1. For BasicItalia: in February 2010, Intesa Sanpaolo S.p.A. and the Company signed an agreement which would permit access to subsidised finance for the start-up of franchising stores of the Group, against which the Company guarantees a portion of the loan and the purchase of assets in leasing and sub-entry into the management of the sales point in the case of non-compliant of the store owner. At December 31, 2025, the bank deposits of BasicItalia were restricted for Euro 2 thousand; guarantees were also provided on leasing amounting to Euro 33 thousand;
1. BasicNet S.p.A.: the company has commitments for guarantees in favour of store tenants in the interest of KappaRetail for Euro 364 thousand, of K-WayRetail for Euro 209 thousand, of SebagoRetail for Euro 181 thousand, of K-Way for Euro 42 thousand, of Superga for Euro 25 thousand, of Kappa for Euro 15 thousand and of SupergaRetail for Euro 52 thousand;
1. Kappa S.r.l.: it has commitments undertaken through some Credit Institutions, which refer to the opening of documentary credits (letters of credit) for the import of goods for an amount of Euro 9.2 million and VAT deposit guarantees for Euro 2.5 million;
1. K-Way S.p.A.: it has commitments undertaken through some Credit Institutions, which refer to the opening of documentary credits (letters of credit) for the import of goods for an amount of Euro 12.3 million and VAT deposit guarantees for Euro 2.5 million;
1. Superga S.r.l.: it has commitments undertaken through some Credit Institutions, which refer to the opening of documentary credits (letters of credit) for the import of goods for an amount of Euro 0.8 million and VAT deposit guarantees for Euro 1.2 million;
1. Sebago S.r.l.: the shares of the company are subject to a pledge in favour of MPS Capital Services Banca per le Imprese S.p.A. as guarantee of the loan issued in July 2017 and that the company has taken on commitments, by way of a number of banks, related to the opening of letters of credit for the importing of goods for a total amount of Euro 4.1 million and VAT deposit guarantees for Euro 1.2 million;
1. Woolrich Europe S.p.A.: it has commitments undertaken through some Credit Institutions, which refer to the opening of documentary credits (letters of credit) for the import of goods for an amount of Euro 5.2 million;
1. Sundek S.p.A.: it has commitments undertaken through some Credit Institutions, which refer to the opening of documentary credits (letters of credit) for the import of goods for an amount of Euro 1.1 million.

48. CLASSIFICATION OF THE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The principal risks and uncertainties of the Group activities are described in the Directors' Report. The financial instruments of the BasicNet Group include:

cash and cash equivalents and bank overdrafts;
medium/long-term loans and lease financing;
derivative financial instruments;
trade payables and receivables.

It is recalled that the Group only subscribes to cash flow hedges, to hedge against interest and currency risks.

In accordance with the requirements of IFRS 7 in relation to financial risks, the types of financial instruments present in the financial statements, with indication of the valuation criteria applied, are reported below:

	Financial instruments at fair value recorded through:		Financial instruments at amortised cost	Non-listed investments valued at cost	Book value at 31.12.2025
	Income statement	Net Equity
Assets:
Equity invest. & other financial assets	-	-	-	55,728	55,728
Cash and cash equivalents	-	-	51,138	-	51,138
Trade receivables	-	-	88,779	-	88,779
Other current assets	-	-	61,407	-	61,407
Derivative financial instruments	-	105	-	-	105
Liabilities:
Medium/long-term loans	-	-	78,233	-	78,233
Bank payables	-	-	137,418	-	137,418
Trade payables	-	-	116,560	-	116,560
Other current liabilities	-	-	30,804	-	30,804
Derivative financial instruments	-	4,251	-	-	4,251

The financial risk factors, identified in IFRS 7 – Financial instruments: additional disclosures, are described below:

the risk that the fair value or the future cash flows of a financial instrument fluctuate following changes in market prices ("market risk"). The market risk includes the following risks: price, currency and interest rates:
a. the risk that the fair value or the future cash flows of a financial instrument fluctuate following changes in market prices (other than changes determined from interest rate or currency risk), whether the changes are determined by specific factors related to the financial instrument or its issuer, or whether it is due to factors which influence all similar financial instruments traded on the market ("price risk");
b. the risk that the fair value or the future cash flows of a financial instrument fluctuate following changes in currency prices ("currency risk");
c. the risk that the fair value or the future cash flows of a financial instrument fluctuate following changes in market interest rates ("interest rate risk");
the risk that one of the parties that signs a contract of a financial nature does not comply with an obligation ("credit risk");
the risk that an entity has difficulty in complying with the obligations associated with the financial liabilities ("liquidity risk");

• the risk that the loans within the companies of the Group contain clauses which allow the counterparties to request the creditor on the occurrence of certain events or circumstances the immediate repayment of the sums granted and not yet due, generating a liquidity risk ("default risk").

Price risk

The Group is exposed to the risk of fluctuations in commodity prices relating to raw materials (wool, cotton, rubber, synthetic fibre etc.) incorporated in the finished products which BasicItalia S.r.l., K-Way S.p.A. and Kappa France Group acquire on international markets, as well as fluctuations in the cost of oil which influences transport costs.

The Group does not hedge these risks as not directly dealing with raw materials but only finished products and is exposed for the part of the increase which cannot be transferred to the final consumer if the market and competitive conditions do not permit such.

Currency risk

The BasicNet Group has subscribed the majority of its financial instruments in Euro which corresponds to its functional and presentation currency. Operating on the international market the group is also exposed to fluctuations in exchange rates, principally the US Dollar against the Euro.

At December 31, 2025, unrealised exchange gains were recorded of Euro 1.4 million, while unrealised exchange losses were recorded of Euro 784 thousand, for a net exchange gain of Euro 667 thousand.

At the reporting date, there were 26 hedge transactions on US Dollar fluctuations, totalling USD 92.3 million; the relative effects are illustrated in the account "Derivative financial instruments", in Note 46.

Group Management considers that the management and containment polices adopted for this risk are adequate.

All medium/long-term loans and leasing contracts are in Euro, therefore they are not subject to any currency risk.

Interest rate risk

The composition of the gross financial debt between fixed and variable interest rates at December 31, 2025 is shown below:

	December 31, 2025	%	December 31, 2024	%
Fixed rate	5,558	2.6%	22,410	18.8%
Variable rate	210,093	97.4%	96,577	81.2%
Gross debt	215,625	100.0%	118,986	100.0%

The interest rate fluctuation risks of some medium/term loans were hedged with conversion of the variable rate into fixed rates, as described in Note 46. On the remaining part of the debt, the Group is exposed to fluctuation risks.

Where at December 31, 2025 the interest rate on long/term loans at that date were 100 basis points higher (or lower) compared to the actual rates, there would be a higher financial charges (lower), before the tax effect, respectively of Euro +684 thousand and Euro -684 thousand.

Credit risk

The doubtful debt provision (Note 28) which includes provisions against specific credit positions and a general provision on an historical analysis of receivables, represents approx. 18% of trade receivables at December 31, 2025.

Liquidity risk

Liquidity risk is mitigated in the short-term period by the significant generation of cash realised by the "licenses and trademarks" segment, by the significant positive net working capital, and by the overall credit lines provided by the banking system (Note 35).

The table below illustrates the cash flow timing of payments on medium/long-term debt.

	Book value	Future interest income/ (expense)	Contractual cash flows	Within 1 year	From 1 to 5 years	Beyond 5 years
Banco BPM Mortgage Loan (Real	-	-	-	-	-	-
Estate)
Banco BPM Unsecured Loan Kappa	1,125	7	1,132	1,132	-	-
Japan brand
FGC 662/96 loan BasicNet	1,031	5	1,037	1,037	-	-
FGC 662/96 loan BasicItalia	1,031	5	1,037	1,037	-	-
FGC 662/96 K-WayRetail Loan	-	-	-	-	-	-
FGC 662/96 Kappa Japan brand Loan	1,375	9	1,384	1,384	-	-
BNL "Mini-Mortgage" (BasicNet)	10,000	508	10,508	288	10,219	-
Unicredit BasicNet (Woolrich) Line A Loan	58,000	5,404	63,404	5,212	58,192	-
Tow (Woolrich) Line B Loan	12,000	1,817	13,817	415	11,173	2,229
Unsecured BPM (Woolrich) loan	512	5	517	414	103	-
MPS-Intesa Sundek Loan - Line A	1,646	108	1,754	1,754	-	-
Sundek MPS Loan (Covid)	319	3	323	323	-	-
Sundek Intesa Loan (Covid)	477	9	485	485	-	-
MPS-Intesa Sundek Loan - Line B	8,500	858	9,358	9,358	-	-
Sundek Unicredit Loan (SACE)	1,500	120	1,620	559	1,060	-
Sundek SIMEST 68540 Loan	416	3	419	120	299	-
Sundek SIMEST 902604 Loan	68	1	69	-	51	17
BPI KE loan	-	-	-	-	-	-
Subsidised loan
"Covid 19" Abanca	-	-	-	-	-	-
Subsidised loan
"Covid 19" KSI	-	-	-	-	-	-
BNP – La Baule	-	-	-	-	-	-
BPI – La Baule	-	-	-	-	-	-
HSBC – Montpellier	-	-	-	-	-	-
BNP – Nice	-	-	-	-	-	-
SGE – Lyon	-	-	-	-	-	-
SGE – Temple (financement Travaux)	-	-	-	-	-	-
SGE – Biarritz	-	-	-	-	-	-
BPI – Biarritz	-	-	-	-	-	-
BNP – PGE	-	-	-	-	-	-
HSBC – PGE	-	-	-	-	-	-
SGE – PGE	-	-	-	-	-	-
BNP – Lyon	-	-	-	-	-	-
Lease payables	177	13	190	148	42	-
Payables for rights-of-use	102,597	11,229	113,987	25,685	68,595	19,706
Total financial liabilities	200,774	20,105	221,040	49,351	149,736	21,952

Default and debt covenant risk

The risk that the loans within the companies of the Group contain clauses (covenants) which allow the counterparties to request the creditor on the occurrence of certain events or circumstances the immediate repayment of the sums granted and not yet due, generating a liquidity risk.

The loans outstanding at the date of these financial statements are not subject to financial covenants, with the exception of the loans assumed in connection with the Sundek transaction, for which the lending banks are already committed to a full restructuring of the debt.

49. INTERCOMPANY TRANSACTIONS AND TRANSACTIONS WITH RELATED COMPANIES

The transactions between the Parent Company and its subsidiaries and between the subsidiaries were within the normal operating activities of the Group and were concluded at normal market conditions. The balance sheet and income statement effects of the transactions are eliminated in the consolidation process. Based on the information received from the companies of the Group there were no atypical or unusual operations.

BasicNet S.p.A. and, as consolidated companies, BasicItalia S.p.A., K-Way S.p.A., K-WayRetail S.r.l., Kappa S.r.l., KappaRetail S.r.l., Basic Village S.p.A., Tow S.p.A., Sebago S.r.l., SebagoRetail S.r.l, Superga S.r.l., SupergaRetail S.r.l., and BasicAir S.r.l. have adhered to the national fiscal regime as per Article 177/129 of the CFA.

Kappa France S.a.s. and its subsidiaries are part of the French tax consolidation regime pursuant to Articles 223-A/223-U of the General Tax Code (CGI).

The transactions with related parties for the year ended December 31, 2025 are reported below:

	Equity investments	Trade receivables	Trade Payables	Other Income	Costs
Remuneration of Boards and Senior Executives and other related parties	-	-	-	-	15,626
Total		-	-	-	15,626

The remuneration concerns emoluments and all other payments, pension-related or social security deriving from the role of Director or Statutory Auditor in BasicNet S.p.A. and the other companies within the consolidation scope.

In relation to the other related parties, we highlight the legal consulting activities undertaken by Studio Legale Pavesio e Associati with Negri-Clementi, as part of a framework contract, of the Director Carlo Pavesio. These transactions, not material compared to the overall values, were at market conditions.

50. SUBSEQUENT EVENTS

They are described in the Directors' Report.

51. CONSOB COMMUNICATION NO. DEM/6064293 OF JULY 28, 2006

Pursuant to Consob Communication DEM/6064293 of July 28, 2006, we report that there were no nonrecurring significant operations during the year.

52. CONTINGENT LIABILITIES/ASSETS

The BasicNet Group is involved in some legal disputes of a commercial nature which are not expected to give rise to significant liabilities.

Tax disputes

Alleged tax inversion Basic Properties America

The disputes relate specifically to the alleged requalification of the American company Basic Properties America, Ltd. as a tax resident in Italy and the consequent VAT treatment of royalties paid by it to the Group's other foreign companies. As they did not consider the arguments put forward by the Agency to be well-founded, the companies lodged appeals against all the assessment notices, together with requests for suspension of their executive effects.

The Group companies involved have had their claims recognised in the first and second instance for all the years in dispute.

As of today, for all the years in dispute, the scheduling of the hearing before the Court of Cassation is still awaited.

Commercial disputes

FISI pre-emption right

Regarding damages, the Court ruled that the damage resulting from FISI's breach of duty can only be fully assessed and quantified following the last competitive season until at least 2025/2026.

On July 20, 2023, FISI's request for a stay of the enforceability of the first instance ruling was granted by the Court of Appeals.

Dispute with Audi AG

A dispute is ongoing between the BasicNet Group and Audi regarding the use of Audi trademarks on replica products connected to the FISI sponsorship. In 2025, the Turin Court of First Instance issued a judgment ordering BasicItalia S.r.l., jointly and severally with BasicNet S.p.A., to pay Euro 1,450,589. The Company considered that valid grounds existed to challenge the decision and accordingly lodged an appeal, seeking its reversal or, in the alternative, a reassessment of the amount awarded. Audi entered an appearance and in turn filed a cross-appeal. The case is currently pending before the Turin Court of Appeal, with the hearing for submission to judgment scheduled for January 2027. The proceedings are therefore at the secondinstance stage, and developments will be monitored in future years.

For the Board of Directors

The Chairperson

Marco Daniele Boglione

ATTACHMENT 1

DISCLOSURE PURSUANT TO ARTICLE 149 DUODECIES OF THE CONSOB ISSUER'S REGULATION

Type of service	Service provider	Company	Fees for 2025

Audit	EY S.p.A.	Parent BasicNet S.p.A.	59,000
		Subsidiaries	208,000
	Network EY	Subsidiaries	74,000
	Other auditors	Subsidiaries	158,000
Limited audit of the consolidated sustainability statement	EY S.p.A.	Parent BasicNet S.p.A.	54,000
Certification services	EY S.p.A.	Parent BasicNet S.p.A.	50,000
		Subsidiaries	3,000
Other services	EY Advisory S.p.A.	Parent BasicNet S.p.A.	140,000
		Subsidiaries	320,000
	EY Società tra Professionisti S.r.l.	Parent BasicNet S.p.A.	77,000
		Subsidiaries	25,000

Total			1,168,000

ATTACHMENT 2 Page 1 of 3

COMPANIES INCLUDED IN THE CONSOLIDATION UNDER THE LINE-BY-LINE METHOD

	Registered Office	Corporate purpose	Share capital		Parent company holding (%)
PARENT COMPANY
BasicNet S.p.A.
Directly held subsidiaries:
- BasicAir S.r.l. single shareholder company	Turin (Italy)	Company owning the Cessna Citation VII aircraft.	EURO	3,000,000	100
- BasicInvestments S.r.l. single shareholder company	Turin (Italy)	Undertaking & manage. of investments	EURO	10,000	100
- BasicItalia S.r.l. single shareholder company	Turin (Italy)	Logistics hub for the Group's distribution companies and providers of operations, legal and administrative services	EURO	100,000	100
- BasicNet Asia Ltd.	Hong Kong (China)	Control activity of the licensees and sourcing centre in Asia.	HKD	10,000	100
- BasicNet Asia Company Limited	Ho Chi Minh City (Vietnam)	Control activity of the licensees and sourcing centre in Asia.	DONG	462,600,000	100
- Basic Properties America, Inc.	Richmond (Virginia – USA)	Sub-license of brands for the American market	USD	2,000	100
- BasicVillage S.p.A. - single shareholder company	Turin (Italy)	Management of the properties owned in Turin - Largo M. Vitale 1, C.so Regio Parco, 43, C.so Regio Parco, 33, Strada della Cebrosa 106, and adjacent land, and Milan - Via dell'Aprica 12.	EURO	412,800	100
- Kappa S.r.l. single shareholder company	Turin (Italy)	Company owning the Kappa, Robe di Kappa, Briko brands and distributor for the brands, managing direct-to public outlets for the brands' products.	EURO	1,300,000	100
- K-Way Topco S.r.l. single shareholder company	Milan (Italy)	Acquisition of equity investments and the provision of financial, business, securities and real estate, administrative, accounting and technical services for subsidiaries	EURO	1,000,000	59.9
- Sebago S.r.l. single shareholder company	Turin (Italy)	Company owning the Sebago brand and distributor for the brand, managing direct-to-public outlets for brand products.	EURO	50,000	100
- Superga S.r.l. single shareholder company	Turin (Italy)	Company owning the Superga brand and distributor for the brand, managing direct-to-public outlets for brand products.	EURO	50,000	100
- Sundek S.p.A. single shareholder company	Turin (Italy)	Company owning the Sundek brand and distributor for the brand, managing direct-to-public outlets for brand products.	EURO	2,300,000	100
-Tow S.p.A. single shareholder company (formerly Jesus Jeans S.r.l.)	Turin (Italy)	Owner of the Woolrich brand for Europe and the holding company of the Woolrich Europe Group.	EURO	50,000	100

ATTACHMENT 1 Page 2 of 3

	Registered Office	Corporate purpose	Share capital		Parent company holding (%)
Indirectly held subsidiaries:
- through Kappa S.r.l.
- Kappa France S.a.s.		Saint Herblain (France) Kappa licensee for France.	EURO	2,207,600	100
- KappaRetail S.r.l. single shareholder company	Turin (Italy)	Company operating certain retail outlets for products of the Kappa, Robe di Kappa and Briko brands.	EURO	10,000	100
- Kappa Sport Iberia S.L.	Madrid (Spain)	Sub-licensee for the Spanish and Portuguese territory	EURO	505,588	100
- through Kappa France S.a.s.
- Sport Fashion Distribution UK Ltd (in liquidation)	Manchester (United Kingdom)	British company in liquidation.	POUND STERLING	1	100
- Sport Fashion Retail S.a.r.l.		Saint Herblain (France) Company operating direct outlets in France.	EURO	5,000	100
- through K-Way Topco S.r.l.
- K-Way Midco S.p.A. single shareholder company	Milan (Italy)	Acquisition of equity investments and the provision of financial, business, securities and real estate, administrative, accounting and technical services for subsidiaries	EURO	200,000	100
- through K-Way Midco S.p.A.
- K-Way S.p.A. single shareholder company	Turin (Italy)	Company owning the brand K-Way and distributor for the brand, managing direct-to-public outlets for brand products.	EURO	10,050,000	100
- through BasicNet S.p.A.
- K-WayRetail S.r.l. single shareholder company	Turin (Italy)	Management of outlets owned by the Group and a number of K-Way brand and product sales points.	EURO	10,000	100
- K-WayRetail SUISSE S.A.	Mendrisio (Switzerland)	Management of the point of sale to the public in Mendrisio, Switzerland of K Way brand products.	CHF	100,000	100
- K-Way France S.a.s.	Paris (France)	- K-Way licensee for France.	EURO	150,000	100
- K-Way Iberia S.L.	Madrid (Spain)	Management of retail outlets of K-Way brand products to the public in Spain.	EURO	3,000	100

ATTACHMENT 1 Page 3 of 3

	Registered Office	Corporate purpose	Share capital		Parent company holding (%)
Indirectly held subsidiaries:
- follows through K-Way S.p.A. - K-Way Retail Ireland Ltd.	Dublin (Ireland)	Management of retail outlet to the public in Kildare, Ireland of K-Way brand products.	EURO	1,000	100
- GLD Brands Ltd	Blairgowrie (United Kingdom)	Management of public retail outlet in London for K-Way brand products.	POUND STERLING	4	100
- through Sebago S.r.l.
- SebagoRetail S.r.l. single shareholder company	Turin (Italy)	Management of certain retail outlets for Sebago brand products.	EURO	10,000	100
- Sebago France S.L.	Paris (France)	Management of retail outlets of Sebago brand products to the public in France.	EURO	197,080	100
- Sebago Iberia S.L.	Madrid (Spain)	Management of retail outlets of Sebago brand products to the public in Spain.	EURO	3,000	100
- through Superga S.r.l.
- SupergaRetail S.r.l. single shareholder company	Turin (Italy)	Management of certain retail outlets for Superga brand products.	EURO	10,000	100
- through Tow S.p.A.
- Woolrich Europe S.p.A. single shareholder company	Turin (Italy)	Company acquired in December 2025. Direct commercialisation of Woolrich brand products in Europe.		EURO 5,280,000	100
- through Woolrich Europe S.p.A.
- Woolrich Footwear S.r.l.	Torre San Patrizio - FM (Italy)	Woolrich footwear manufacturing company	EURO	100,000	100
- Woolrich France S.L.	…. (France)	Management of retail outlets of Woolrich brand products to the public	EURO	600,000	100
- Woolrich Germany GmbH.	…. (Germany)	in France. Management of retail outlets of Woolrich brand products to the public	EURO	25,000	100
- Woolrich Netherlands	…. (Netherlands)	in Germany. Management of retail outlets of Woolrich brand products to the public in the Netherlands.	EURO	10,000	100

ATTACHMENT 1 Page 3 of 3

	Registered Office	Corporate purpose	Share capital		Parent company holding (%)
- through Sundek S.p.A.
- Kickoff France S.A.S.	…. (France)	Management of retail outlets of Sundek brand products to the public in France	EURO	1,000	100
- Kickoff S.L.	…. (Spain)	Management of retail outlets of Sundek brand products to the public in Spain	EURO	3,000	100
- Kickoff U.S.A. Inc	…. (United States)	Management of retail outlets of Sundek brand products to the public in the United States	USD	1,000	100

230

ATTACHMENT 3

DECLARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS PURSUANT TO ARTICLE 154-BIS PARAGRAPH 3 AND 4-BIS OF LEGISLATIVE DECREE NO. 58 OF FEBRUARY 24, 1998 "FINANCIAL INTERMEDIATION ACT"

The undersigned Marco Daniele Boglione as Executive Chairperson, Alessandro Boglione as Chief Executive Officer, and Marco Enrico as Executive Officer for Financial Reporting of BasicNet S.p.A., affirm, and also in consideration of Article 154-bis, paragraphs 3 and 4, of Legislative Decree No. 58 of February 24, 1998:

the adequacy for company operations and the effective application, of the administrative and accounting procedures for the preparation of the 2025 consolidated financial statements.

In addition, we declare that the consolidated financial statements:

a) corresponds to the underlying accounting documents and records;
b) were prepared in accordance with International Financial Reporting Standards adopted by the European Union, and also in accordance with Article 9 of Legislative Decree No. 38/2005 and provide a true and fair representation of the balance sheet, financial position and results of the Issuer and of the consolidated companies;
c) the Directors' Report includes a reliable analysis on the performance and operating result as well as the situation of the Issuer, together with a description of the risks and uncertainties to which they are exposed.

Marco Daniele Boglione Chairperson

Alessandro Boglione Marco Enrico

Chief Executive Officer Chief Executive Officer for Financial Reporting

BasicNet S.p.A.

Consolidated financial statements as at December 31, 2025

Independent auditor's report pursuant to article 14 of Legislative Decree n. 39, dated 27 January 2010, and article 10 of EU Regulation n. 537/2014

EY S.p.A. Via Meravigli, 12 20123 Milano

Tel: +39 02 722121 Fax: +39 02 722122037 ey.com

Independent auditor's report pursuant to article 14 of Legislative Decree n. 39, dated 27 January 2010 and article 10 of EU Regulation n. 537/2014 (Translation from the original Italian text)

To the Shareholders of BasicNet S.p.A.

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of BasicNet Group (the Group), which comprise the consolidated statement of financial position as at December 31, 2025 and the consolidated statement of income, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at December 31, 2025, and of its financial performance and its cash flows for the year then ended in accordance with IFRS accounting standards issued by International Accounting Standards Board as adopted by the European Union and with the regulations issued for implementing art. 9 of Legislative Decree n. 38/2005.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISA Italia). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of BasicNet S.p.A. in accordance with the regulations and standards on ethics and independence applicable to audits of financial statements under Italian Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We identified the following key audit matters:

Key Audit Matter Audit Response

Valuation of Trademarks and Goodwill

At December 31, 2025 trademarks and goodwill amounted to € 98,2 million and € 112,6 million, respectively. Intangible Assets with indefinite useful life have been allocated to the Cash Generating Units (CGU) related to the Group's trademarks.

The processes and methods used to evaluate and determine the recoverable amount of each CGU, in terms of value in use, are based on assumptions that might be complex and that, due to their nature, imply the use of judgement by

Management, in particular with reference to the forecasting of future cash flows and the determination of the long-term growth and discount rates applied to the future cash flow forecasts.

Considering the level of judgement and complexity of the assumptions applied in estimating the recoverable amount of trademarks and goodwill, we assessed that this area represents a key audit matter.

Disclosures related to the valuation of trademarks and goodwill are provided in note 20 – "Intangible Assets", in note 22 "Goodwill" and in note 5 – "Accounting policies".

Our audit procedures in response to this key audit matter included, among others:

(i) the assessment of the processes implemented by the company in relation to the criteria and methodology of the impairment test;
(ii) the evaluation of the CGUs identified and the allocation of assets and liabilities to the carrying value of each CGU;
(iii) the assessment of the future cash flow forecasts, including comparisons to industry forecasts and sector data;
(iv) the assessment of the consistency of the cash flow forecasts for each CGU as compared to the Group's business plan;
(v) the evaluation of historical accuracy of the forecasts by comparison to actual results;
(vi) the assessment of the long-term growth rates and discount rates.

In performing our analysis, we involved our specialists in valuation techniques, who have performed independent calculations and sensitivity analyses of the key assumptions in order to determine which changes could materially affect the valuation of the recoverable amount.

Lastly, we reviewed the adequacy of the disclosures provided in the explanatory notes in respect to the valuation of trademarks and goodwill.

Acquisitions of Woolrich, Sundek, and Sebago France

The Group completed three significant acquisitions during the fiscal year:

On December 2nd, 2025 the acquisition of Woolrich Europe S.p.A. and the Woolrich trademark. As a result of the business combination, the Group

Our audit procedures in response to this key audit matter included, among others:

(i) the assessment of the processes implemented by the company in relation to the criteria and methodology of the impairment test;

recognized a goodwill amounting to Euro 54,3 million and an intangible asset representing the trademark amounting to Euro 11,5 million. As of December 31st, 2025, the residual liability related to the variable consideration for the acquisition amounted to Euro 2 million, classified as non-current liabilities

On December 16th, 2025, the Group completed the acquisition of Kickoff Group. As a result of the business combination, the Group recognized an intangible asset representing the trademark (Sundek) amounting to Euro 14,8 million. As of December 31st, 2025, the residual liability related to the variable consideration for the acquisition amounted to Euro 4 million, classified as non-current liabilities
On December 18th, 2025, the Group completed the acquisition of Sebago France. As a result of the business combination, the Group recognized a goodwill amounting to Euro 3,1 million. As of December 31st, 2025, the residual liability related to the variable consideration for the acquisition amounted to Euro 1 million, classified as non-current liabilities.

As of December 31st, 2025, the purchase price for acquisitions described above are allocated on a preliminary basis, in accordance with IFRS 3, as certain fair value measurements of the acquired assets and liabilities had not yet been completed.

We have identified the accounting for business acquisitions as a key audit matter given their significance and the level of judgment required in determining the variable consideration.

A detailed description of the transaction and its effects is provided in the notes to the consolidated financial statements, in paragraph 6. Other information.

(ii) the evaluation of the CGUs identified and the allocation of assets and liabilities to the carrying value of each CGU;
(iii) the assessment of the future cash flow forecasts, including comparisons to industry forecasts and sector data;
(iv) the assessment of the consistency of the cash flow forecasts for each CGU as compared to the Group's business plan;
(v) the evaluation of historical accuracy of the forecasts by comparison to actual results;
(vi) the assessment of the long-term growth rates and discount rates.

Lastly, we reviewed the adequacy of the disclosures provided in the explanatory notes in respect to the valuation of trademarks and goodwill.

Responsibilities of Directors and Those Charged with Governance for the Consolidated Financial Statements

The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with IFRS accounting standards issued by International Accounting Standards Board as adopted by the European Union and with the regulations issued for implementing art. 9 of Legislative Decree n. 38/2005, and, within the terms provided by the law, for such internal control as they determine is 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 Group's ability to continue as a going concern and, when preparing the consolidated financial statements, for the appropriateness of the going concern assumption, and for appropriate disclosure thereof. The Directors prepare the consolidated financial statements on a going concern basis unless they either intend to liquidate the Parent Company BasicNet S.p.A. or to cease operations, or have no realistic alternative but to do so.

The statutory audit committee ("Collegio Sindacale") is responsible, within the terms provided by the law, for overseeing the Group's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISA Italia) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with International Standards on Auditing (ISA Italia), we have exercised professional judgment and maintained professional skepticism throughout the audit. In addition:

we have identified and assessed the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, designed and performed audit procedures responsive to those risks, and obtained audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
we have 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 Group's internal control;
we have evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors;
we have concluded on the appropriateness of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to consider this matter in forming our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report.

However, future events or conditions may cause the Group to cease to continue as a going concern;

we have evaluated the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
we have obtained sufficient appropriate audit evidence regarding the financial information of the entities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We have communicated with those charged with governance, identified at an appropriate level as required by ISA Italia, regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We have provided those charged with governance with a statement that we have complied with the ethical and independence requirements applicable in Italy, and we have communicated them all matters that may reasonably be thought to bear on our independence, and where applicable, the actions taken to eliminate relevant risks or the safeguard measures applied.

From the matters communicated with those charged with governance, we have determined those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We have described these matters in our auditor's report.

Additional information pursuant to article 10 of EU Regulation n. 537/14

The shareholders of BasicNet S.p.A., in the general meeting held on 27 April 2017, engaged us to perform the audits of the consolidated financial statements for each of the years ending December 31, 2017 to December 31, 2025.

We declare that we have not provided prohibited non-audit services, referred to article 5, par. 1, of EU Regulation n. 537/2014, and that we have remained independent of the Group in conducting the audit.

We confirm that the opinion on the consolidated financial statements included in this report is consistent with the content of the additional report to the audit committee (Collegio Sindacale) in their capacity as audit committee, prepared pursuant to article 11 of the EU Regulation n. 537/2014.

Report on compliance with other legal and regulatory requirements

Opinion on the compliance with Delegated Regulation (EU) 2019/815

The Directors of BasicNet S.p.A. are responsible for applying the provisions of the European Commission Delegated Regulations (EU) 2019/815 for the regulatory technical standards on the specification of a single electronic reporting format (ESEF – European Single Electronic Format) (the "Delegated Regulation") to the consolidated financial statements as of December 31, 2025, to be included in the annual financial report.

We have performed the procedures under the auditing standard SA Italia n. 700B, in order to express an opinion on the compliance of the consolidated financial statements as at December 31, 2025 with the provisions of the Delegated Regulation.

In our opinion, the consolidated financial statements as at December 31, 2025 have been prepared in the XHTML format and have been marked-up, in all material aspects, in compliance with the provisions of the Delegated Regulation.

Due to certain technical limitations, some information included in the notes to the consolidated financial statements when extracted from the XHTML format to an XBRL instance may not be reproduced in an identical manner with respect to the corresponding information presented in the consolidated financial statements in XHTML.

Opinion and statement pursuant to article 14, paragraph 2, subparagraph e), e-bis) and e-ter) of Legislative Decree n. 39 dated 27 January 2010 and pursuant to article 123-bis, paragraph 4, of Legislative Decree n. 58, dated 24 February 1998

The Directors of BasicNet S.p.A. are responsible for the preparation of the Report on Operations and of the Report on Corporate Governance and Ownership Structure of Group BasicNet as at December 31, 2025, including their consistency with the related consolidated financial statements and their compliance with the applicable laws and regulations.

We have performed the procedures required under audit standard SA Italia n. 720B, in order to:

express an opinion on the consistency of the Report on Operations and of specific information included in the Report on Corporate Governance and Ownership Structure as provided for by article 123-bis, paragraph 4, of Legislative Decree n. 58, dated 24 February 1998, with the consolidated financial statements;
express an opinion of the compliance with the laws and regulations of the Report on Operations, excluding the section related to the consolidated sustainability information, and the above mentioned specific information included in the Report on Corporate Governance and Ownership Structure pursuant article n. 123-bis, paragraph 4, of Legislative Decree n. 58, dated 24 February 1998;
issue a statement on any material misstatement in the Report on Operations and in certain specific information contained in the Report on Corporate Governance and Ownership Structure pursuant article n. 123-bis, paragraph 4, of Legislative Decree n. 58, dated 24 February 1998.

In our opinion, the Report on Operations and the specific information contained in the Report on Corporate Governance and Ownership Structure pursuant article n. 123-bis, paragraph 4, of Legislative Decree n. 58, dated 24 February 1998, are consistent with the consolidated financial statements of BasicNet Group as at December 31, 2025.

Furthermore, in our opinion, the Report on Operations, excluding the section related to the consolidated sustainability information, and the specific information contained in the Report on Corporate Governance and Ownership Structure pursuant article n. 123-bis, paragraph 4, of Legislative Decree n. 58, dated 24 February 1998, comply with the applicable laws and regulations.

With reference to the statement required by art. 14, paragraph 2, subparagraph e-ter), of Legislative Decree n. 39, dated 27 January 2010, based on our knowledge and understanding of the entity and its environment obtained through our audit, we have no matters to report.

Our opinion on compliance with applicable laws and regulations does not extend to the section of the Report on Operations related to consolidated sustainability information. The conclusion on the compliance of this section with the applicable standards governing its preparation criteria and the compliance with the disclosure requirements pursuant to article 8 of (EU) Regulation 2020/852 are formulated by us in the attestation report pursuant to article 14-bis of Legislative Decree No. 39 dated 27 January 2010.

Milan, March 26, 2026

EY S.p.A. Signed by: Massimiliano Vercellotti, Auditor

FINANCIAL STATEMENTS AND

EXPLANATORY NOTES OF BASICNET S.P.A.

AT DECEMBER 31, 2025

240

FINANCIAL STATEMENTS AND EXPLANATORY NOTES

BASICNET S.p.A. – INCOME STATEMENT

(In Euro)	Note	FY 2025	FY 2024	Changes
Services to group companies	(7)	14,879,311	13,856,409	1,022,902
Royalties and sourcing commissions	(8)	6,435,930	8,786,030	(2,350,099)
Direct sales	(9)	67	12,350	(12,283)
Cost of sales	(10)	(59,831)	(183,136)	123,304
Other income	(11)	531,485	1,194,077	(662,593)
Sponsorship and media costs	(12)	(324,912)	(250,704)	(74,208)
Personnel costs	(13)	(10,032,446)	(9,182,521)	(849,924)
Selling, general and administrative costs, royalties expenses	(14)	(22,580,075)	(13,019,600)	(9,560,475)
Amortisation & Depreciation	(15)	(4,252,911)	(4,021,212)	(231,699)
EBIT		(15,403,383)	(2,808,307)	(12,595,075)
Net financial income (charges)	(16)	5,060,937	(620,780)	5,681,717
Dividends	(17)	-	10,568,074	(10,568,074)
Investment income (charges)	(18)	137,002,692	-	137,002,692
PROFIT BEFORE TAXES		126,660,246	7,138,987	119,521,259
Income taxes	(19)	(379,917)	820,448	(1,200,365)
NET PROFIT FOR THE YEAR		126,280,329	7,959,435	118,320,894

BASICNET S.p.A. – COMPREHENSIVE INCOME STATEMENT

(in Euro)	Note	December 31, 2025	December 31, 2024	Changes
Profit for the year (A)		126,280,329	7,959,435	118,320,894
Re-measurement of post-employment benefits (IAS 19) (*)		32,243	(52,315)	84,558
Tax effect on other profits/(losses)		(7,738)	12,556	(20,294)
Reserve for share-based payments to employees (IFRS 2)		361,699	-	361,699
Total other gains/(losses), net of tax effect (B)	(30)	386,204	(39,759)	425,963
Total Comprehensive Profit (A)+(B)		126,666,533	7,919,676	118,746,857

(*) items which may not be reclassified to the profit and loss account

BASICNET S.p.A. – BALANCE SHEET

(In Euro)	Note	December 31, 2025	December 31, 2024
Intangible assets	(20)	5,716,369	4,816,729
Rights-of-use	(21)	1,068,865	2,401,035
Plant, machinery and other assets	(22)	1,896,730	1,991,752
Equity invest. & other financial assets	(23)	192,913,685	138,322,357
Deferred tax assets	(24)	494,842	350,894
Total non-current assets		202,090,492	147,882,767
Net inventories	(25)	-	-
Trade receivables	(26)	2,405,056	3,689,777
Other current assets	(27)	245,038,070	46,553,851
Prepayments	(28)	1,459,590	731,832
Cash and cash equivalents	(29)	2,834,911	1,213,280
Total current assets		251,737,627	52,188,740

TOTAL ASSETS 453,828,118 200,071,507

(in Euro)	Note	December 31, 2025	December 31, 2024
Share capital		31,716,673	31,716,673
Treasury shares		(31,999,682)	(30,861,084)
Other reserves		142,457,423	132,662,588
Net Profit		126,280,329	7,959,435
TOTAL SHAREHOLDERS' EQUITY	(30)	268,454,743	141,477,612
Provision for risks and charges	(31)	45,569	45,569
Loans	(32)	64,742,109	1,314,389
Payables for rights-of-use	(33)	1,099,855	2,498,453
Other financial payables	(34)	4,000,000	-
Employee and Director benefits	(35)	1,196,938	2,306,980
Deferred tax liabilities	(24)	5,712
Total non-current liabilities		71,090,184	6,165,392
Bank payables	(36)	79,033,940	35,903,328
Trade payables	(37)	5,364,691	3,762,896
Tax payables	(38)	1,141,872	1,602,700
Other current liabilities	(39)	28,714,612	11,109,663
Accrued expenses	(40)	28,077	49,916
Total current liabilities		114,283,191	52,428,504
TOTAL LIABILITIES		185,373,376	58,593,895
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		453,828,118	200,071,507

BASICNET S.p.A. – CASH FLOW STATEMENT

	(in Euro)	December 31, 2025	December 31, 2024
A)	OPENING SHORT-TERM NET BANK DEBT	(33,315,048)	(20,814,035)
B)	CASH FLOW FROM OPERATING ACTIVITIES
	Net Profit (Loss) for the year Amortisation & Depreciation Investment income	126,280,329 4,252,911 (137,002,692)	7,959,435 4,021,212 -
	Changes in working capital: - (increase) decrease in trade receivables - (increase) decrease in inventories	1,284,721 -	(1,534,888) -
	- (increase) decrease in other receivables - increase (decrease) in trade payables - increase (decrease) in other payables Net changes in employee and director benefits	(9,868,295) 1,601,795 2,614,338 (723,838)	8,976,609 (220,196) (2,513,893) 516,761
	Others, net	- (11,560,731)	- 17,205,041
C)	CASH FLOW FROM INVESTING ACTIVITIES
	Investments in fixed assets: - tangible assets - intangible assets - financial assets Realisable value for fixed asset disposals: - tangible assets - intangible assets - financial assets	(448,567) (3,347,933) (134,455,755) 10,387 - 126,059,409 (12,182,459)	(692,087) (2,774,561) (488,297) 3,640 - - (3,951,305)
D)	CASH FLOW FROM FINANCING ACTIVITIES
	Net change in inter-company payables/receivables Reimbursement of finance leases Loan proceeds Medium/long term loans (repayments) Repayment of loans for rights-of-use Acquisition of treasury shares	(57,973,974) (129,265) 68,000,000 (1,375,000) (1,337,843) (14,432,141)	963,733 262,395 - (3,812,500) (1,326,151) (14,418,620)
	Distribution dividends	(7,449,553) (14,697,775)	(7,423,604) (25,754,748)
E)	CASH FLOW IN THE YEAR	(38,440,966)	(12,501,013)
F)	CLOSING SHORT-TERM NET BANK DEBT	(71,756,014)	(33,315,048)

It is noted that interest paid for the year amounts to Euro 1.24 million in 2025 and Euro 1 million in 2024, while no taxes were paid in 2025 (Euro 265 thousand in 2024).

BASICNET S.p.A. - STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

(in Euro)	Treasury shares	Legal Reserve	Treasury shares in portfolio reserve	Remeasur ement Reserve IAS19	IFRS 2 Reserve	Stock grant reserve	Conferment reserve	Merger reserve	Exchange gains reserve	Retained earnings/(accu mulated losses)	Net profit	Total
Balance at December 31, 2023	31,716,673 (16,442,464) 6,343,335		16,442,464	(65,826)	-	-	60,903,373	264,495	-	36,161,099		20,077,014 155,400,162
Allocation of result as per Shareholders' AGM resolution of 16/04/2024 - Legal reserve	-	-	-	-	-	-	-	-	-	-	-	-
- Unrealised exchange gains reserve	-	-	-	-	-	-	-	-	-	-	-	-
- Retained earnings/ (accumulated losses) - Distribution of	- -	- -	- -	- -	- -	- -	- -	- -	- -	12,636,744 16,666	(12,636,744) (7,440,270)	- (7,423,604)
dividends - Conferment reserve	-	-	-	-	-	-	-	-	-	-	-	-
Acquisition of treasury shares	(14,418,620)	-	14,418,620	-	-	-	-	-	- -	(14,418,620)	-	(14,418,620)
Result December 31, 2024	-	-	-	-	-	-	-	-	-	-	7,959,435	7,959,435
Other comprehensive income statement items:
- Gains/(losses) recorded directly to cash flow hedge reserve	-	-	-	-	-	-	-	-	-	-	-	-
- Gains/(losses) recorded directly to equity for IAS 19 re measurement	-	-	-	(39,759)	-	-	-	-	-	-	-	(39,759)
Total comprehensive income	-	-	-	(39,759)	-	-	-	-	-	-	7,959,435	7,919,676
Balance at December 31, 2024	31,716,673 (30,861,084) 6,343,335		30,861,084	(105,586)	-	-	60,903,373	264,495	-	34,395,888		7,959,435 141,477,613
Allocation of result as per Shareholders' AGM resolution of April 17,
2025 - Legal reserve	-	-	-	-	-		-	-	-	-	-	-
- Unrealised exchange gains reserve - Retained	-	-	-	-	-	-	-	-	115,801	-	(115,801)	-
earnings/(accumulated losses)	-	-	-	-	-	-	-	-	-	328,914	(328,914)	-
- Distribution of dividends	-	-	-	-	-		-	-	-	65,167	(7,514,720)	(7,449,553)
- Previous year's profit reserve	-	-	-	-	-	-	-	-	-	8,706,457		8,706,457
Acquisition of treasury shares	(14,432,141)	-	14,432,141	-	-	-	-	-	-	(14,432,141)	-	(14,432,141)
Sale of treasury shares Stock Grant reserve	13,293,543 -	- -	(13,293,543) -	- -	- -	- 192,291	- -	- -	- -	13,293,543 -	- -	13,293,543 192,291
Result December 31, 2025	-	-	-	-	-	-	-	-	-	-	126,280,329	126,280,329
Other comprehensive income statement items:
- Gains/(losses) recorded directly to reserve for IFRS 2	-	-	-	-	361,699	-	-	-	-	-	-	361,699
- Gains/(losses) recorded directly to cash flow hedge reserve	-	-	-	-	-	-	-	-	-	-	-	-
- Gains/(losses) recorded directly to equity for IAS 19 re measurement	-	-	-	24,504	-	-	-	-	-	-	-	24,504
Total comprehensive income	-	-	-	24,504	361,699	-	-	-	- -	-	126,280,329	126,666,532
Balance at December 31, 2025	31,716,673 (31,999,682) 6,343,335		31,999,682	(81,081)	361,699	192,291	60,903,373	264,495	115,801		42,357,829 126,280,329 268,454,743

BASICNET S.p.A. – NET FINANCIAL POSITION

(in Euro)	December 31, 2025	December 31, 2024
Cash and cash equivalents	2,834,911	1,213,280
Bank overdrafts and bills	(74,590,925)	(34,528,328)
Sub-total net liquidity available	(71,756,014)	(33,315,048)
Short-term portion of medium/long-term loans	(4,443,015)	(1,375,000)
Short-term net financial position – third parties	(76,199,028)	(34,690,048)
"Intesa Loan - FCG"	-	(1,031,250)
"BNL Loan"	(10,000,000)	-
"Unicredit Loan"	(54,588,235)	-
Payables for rights-of-use	(1,099,855)	(2,498,453)
Medium/long-term financial payables	(4,000,000)	-
Medium/long lease payables	(153,874)	(283,139)
Sub-total loans and leasing – third parties	(69,841,965)	(3,812,842)
Net financial position - third parties	(146,040,993)	(38,502,890)
Group financial receivables / (payables)	78,259,334	20,285,360
Net Financial Position - Group	78,259,334	20,285,360
Total net financial position	(67,781,659)	(18,217,530)

(in Euro)		December 31, 2025	December 31, 2024
A.	Cash	7,667	7,870
B.	Other cash equivalents	2,827,244	1,205,410
C.	Securities held for trading
D.	Cash & cash equivalents (A)+(B)+(C)	2,834,911	1,213,280
E.	Current financial assets
F.	Current bank payables	(74,590,925)	(34,528,328)
G.	Current portion of non-current debt	(4,443,015)	(1,375,000)
H.	Other Group financial receivables/ (payables)	78,259,334	20,285,360
I.	Current financial debt (F)+(G)+(H)	(774,606)	(15,617,968)
J.	Net current financial debt (I)-(E)-(D)	2,060,305	(14,404,688)
K.	Non-current bank payables	(64,742,109)	(1,314,389)
L.	Bonds issued
M.	Other non-current financial payables	(5,099,855)	(2,498,453)
N.	Trade payables and other non-current payables
O.	Non-current financial debt (K) + (L) + (M) + (N)	(69,841,965)	(3,812,842)
P.	Net financial debt (J) + (O)	(67,781,659)	(18,217,530)

BASICNET S.P.A. STATEMENT OF CHANGES IN NET FINANCIAL POSITION

	December 31, 2025	December 31, 2024
A) OPENING NET FINANCIAL POSITION	(18,217,531)	(9,474,916)
B) CASH FLOW FROM OPERATING ACTIVITIES
Net profit (loss)	126,280,329	7,959,435
Amortisation & Depreciation	4,252,911	4,021,212
Investment income	(137,002,692)	-
Changes in working capital	(4,367,441)	4,707,632
Net changes in employee and director benefits Others, net	(723,838) -	516,761 -
	(11,560,731)	17,205,041
C) CASH FLOW FROM INVESTING ACTIVITIES
Fixed asset investments	(138,252,255)	(3,954,946)
Realisable value for fixed asset disposals	126,069,796	3,640
	(12,182,459)	(3,951,305)
D) CASH FLOW FROM FINANCING ACTIVITIES
Assumption (Reduction) payables for rights-of-use	60,755	(154,126)
Acquisition of treasury shares	(14,432,141)	(14,418,620)
Dividend payments	(7,449,553)	(7,423,604)
	(21,820,938)	(21,996,350)
E) CASH FLOW IN THE YEAR	(45,564,129)	(8,742,615)
F) CLOSING NET FINANCIAL POSITION	(63,781,659)	(18,217,531)

(in Euro)	FY 2025	Of which related parties Note 43	FY 2024	Of which related parties
Services to group companies	14,879,311	14,879,311	13,856,409	13,856,409
Royalties and sourcing commissions	6,435,930	60,000	8,726,030	60,000
Direct sales	67	-	12,350	1,350
Cost of sales	(59,831)	-	(183,136)	-
Other income	531,485	-	1,194,077	-
Sponsorship and media costs	(324,912)	(193,498)	(250,704)	(153,545)
Personnel costs	(10,032,446)	-	(9,182,521)	-
Selling, general and administrative costs, royalties expenses	(22,580,075)	(2,044,158)	(13,019,600)	(1,993,450)
Amortisation & Depreciation	(4,252,911)	(1,271,897)	(4,021,212)	(1,278,218)
EBIT	(15,403,383)		(2,808,307)
Net financial income (charges) Dividends	5,060,937 -	4,927,717 -	(620,780) 10,568,074	917,702 10,568,074
Investment income (charges)	137,002,692	-	-	-
PROFIT BEFORE TAXES	126,660,246		7,138,987
Income taxes	(379,917)	-	820,448	-
NET PROFIT FOR THE YEAR	126,280,329		7,959,435

BASICNET S.p.A. – 2025 INCOME STATEMENT PREPARED AS PER CONSOB RESOLUTION NO. 15519 OF JULY 27, 2006

BASICNET S.p.A. – BALANCE SHEET AS AT DECEMBER 31, 2025 PREPARED AS PER CONSOB RESOLUTION NO. 15519 OF JULY 27, 2006

(in Euro)	December 31, 2025	Of which Related parties Notes 21 & 27	December 31, 2024	Of which Related parties Notes 21 & 27
Intangible assets	5,716,369		4,816,729
Rights-of-use	1,068,865	1,068,865	2,401,035	2,328,991
Plant, machinery and other assets	1,896,730		1,991,752
Equity invest. & other financial assets	192,913,685	141,997,523	138,322,357	137,801,950
Deferred tax assets	494,842		350,894
Total non-current assets	202,090,492		147,882,767
Net inventories	-		-
Trade receivables	2,405,056		3,689,777
Other current assets	245,038,070	203,157,796	46,553,851	44,199,061
Prepayments	1,459,590		731,832
Cash and cash equivalents	2,834,911		1,213,280
Total current assets	251,737,627		52,188,740
TOTAL ASSETS	453,828,118		200,071,507

(in Euro)	December 31, 2025	Of which Related parties Notes 33 & 39	December 31, 2024	Of which Related parties Notes 33 & 39
Share capital	31,716,673		31,716,673
Treasury shares	(31,999,682)		(30,861,084)
Other reserves	142,457,423		132,662,588
Net Profit	126,280,329		7,959,435
TOTAL SHAREHOLDERS' EQUITY	268,454,743		141,477,612
Provisions for risks and charges	45,569		45,569
Loans	64,742,109		1,314,389
Payables for rights-of-use	1,099,855	1,099,855	2,498,453	2,432,301
Other financial payables	4,000,000		-
Employee and Director benefits	1,196,938		2,306,980
Deferred tax liabilities	5,712		-
Total non-current liabilities	71,090,184		6,165,392
Bank payables	79,033,940		35,903,328
Trade payables	5,364,691		3,762,896
Tax payables	1,141,872		1,602,700
Other current liabilities	28,714,612	26,549,309	11,109,663	9,059,294
Accrued expenses	28,077		49,916
Total current liabilities	114,283,191		52,428,504
TOTAL LIABILITIES	185,373,376		58,593,895
TOTAL LIABILITIES AND SHAREHOLDERS'	453,828,118		200,071,507

EQUITY

249

BASICNET S.p.A. – CASH FLOW STATEMENT AS AT DECEMBER 31, 2025 PREPARED AS PER CONSOB RESOLUTION NO. 15519 OF JULY 27, 2006

(in Euro)	December 31 2025	Of which related parties Notes 21, 27, 33 & 39	December 31, 2024	Of which related parties Notes 21, 27, 33 & 39
A) OPENING SHORT-TERM NET BANK DEBT	(33,315,048)		(20,814,035)
B) CASH FLOW FROM OPERATING ACTIVITIES
Net Profit (Loss) for the year Amortisation & Depreciation Investment income Changes in working capital:	126,280,329 4,252,911 (137,002,692)		7,955,700 4,021,212 -
- (increase) decrease in trade receivables - (increase) decrease in inventories	1,284,721 -		(1,534,888) -
- (increase) decrease in other receivables - increase (decrease) in trade payables - increase (decrease) in other payables Net changes in employee and director benefits Others, net	(9,868,295) 1,601,795 2,614,338 (723,838)	(9,476,818)	8,976,609 (220,196) (2,513,893) 516,761 -	8,364,073
	(11,560,731)		17,205,041
C) CASH FLOW FROM INVESTING ACTIVITIES
Investments in fixed assets: - tangible assets - intangible assets - financial assets	(448,567) (3,347,933) (134,455,755)		(692,087) (2,774,561) (488,297)
Realisable value for fixed asset disposals: - tangible assets - intangible assets	10,387 -		3,640 -
- financial assets	126,059,409 (12,182,459)		- (3,951,305)
D) CASH FLOW FROM FINANCING ACTIVITIES
Net change in inter-company payables/receivables Undertaking of finance leases	(57,973,974) -	(57,973,974)	963,733 -	963,733
Reimbursement of finance leases Loan proceeds	(129,265) 68,000,000		262,395 -
Loan repayments Repayment of loans for rights-of-use	(1,375,000) (1,337,843)		(3,812,500) (1,326,151)
Acquisition of treasury shares Distribution dividends	(14,432,141) (7,449,553)	(7,449,553)	(14,418,620) (7,423,604)	(7,423,604)
	(14,697,775)		(25,754,748)
E) CASH FLOW IN THE YEAR	(38,440,966)		(12,501,013)
F) CLOSING SHORT-TERM NET BANK DEBT	(71,756,014)		(33,315,048)

The undersigned herewith declares that the present financial statements reflect the underlying accounting entries.

For the Board of Directors The Chairperson

Marco Daniele Boglione

EXPLANATORY NOTES

1. GENERAL INFORMATION

BasicNet S.p.A. – with registered office in Turin (Italy), listed on the Italian Stock Exchange since November 17, 1999, in addition to its main function of Parent Company, provides to its subsidiaries the "Powered by" services, overseeing the continuous and progressive development of the IT platform which enables communication between the various network licensees, as well as undertaking activities of conception, development and communication and the Groups' Information Technology systems. The Company coordinates and provides subsidiaries with administration, finance and control, legal and payroll management services.

The duration of BasicNet S.p.A. is fixed by the company by-laws until December 31, 2050.

The publication of the financial statements of BasicNet S.p.A. for the year ended December 31, 2025 was approved by the Board of Directors on March 11, 2026. The final approval of the accounts is the responsibility of the Shareholders' AGM.

2. ACCOUNTING PRINCIPLES FOR THE PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements for the year 2025 were prepared in accordance with IFRS issued by the International Accounting Standards Board ("IASB) and approved by the European Union at the date of the present document. IFRS refers to all the revised International Accounting Standards (IAS), and all of the interpretations of the International Financial Reporting Interpretations Committee ("IFRIC") - previously known as the Standing Interpretations Committee ("SIC").

The financial statements are prepared under the historical cost convention, modified where applicable for the measurement of certain financial instruments, as well as on the going concern assumption.

Accounting standards, amendments and interpretations issued but not yet in force

The standards and interpretations which at the date of the preparation of the financial statements were issued but not yet in force are reported below. The Company will adopt these standards when they enter into force, if applicable.

IFRS 18 Presentation and Disclosure in Financial Statements

The Company is currently working to identify the impacts that the changes will have on its financial statements and notes to the financial statements.

IFRS 19 Subsidiaries without Public Accountability: Disclosures

IFRS 19 will become effective for fiscal years beginning on or after January 1, 2027, with early application possible.

Amendments to the Classification and Measurement of Financial Instruments—Amendments to IFRS 9 and IFRS 7

In May 2024, the IASB issued amendments to IFRS 9 and IFRS 7, called Amendments to the Classification and Measurement of Financial Instruments (the "Amendments"). The Amendments include:

a clarification that a financial liability is written off on the "settlement date" and the introduction of an accounting policy choice (where specific conditions are met) to cancel financial liabilities settled through electronic payment systems before the settlement date;
additional guidance on how to evaluate contractual cash flows for financial assets with environmental, social and governance (ESG) characteristics or similar;
clarification of the characteristics of a "non-recourse" instrument (non-recourse feature) and on the characteristics of contractually linked instruments;
the introduction of disclosure requirements for financial instruments with contingent characteristics and additional disclosure requirements for equity instruments classified at fair value through comprehensive income (OCI).

The amendments are effective for annual periods beginning on or after January 1, 2026, with early adoption permitted only for the classification of financial assets and related disclosures.

Annual Improvements to IFRS Accounting Standards - Volume 11

In July 2024, the IASB issued nine amendments of limited scope as part of the periodic maintenance of the IFRS. The amendments include clarifications, simplifications, corrections or changes to improve consistency in the following standards: IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 7 Financial Instruments: Disclosures and the related Guidance on implementing IFRS 7, IFRS 9 Financial Instruments, IFRS 10 Consolidated Financial Statements and IAS 7 Statement of Cash Flows.

The changes will be effective for periods beginning on or after January 1, 2026. Early adoption is permitted, of which adequate notice must be given.

Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7

clarify the application of own-use requirements for contracts within the scope;
change the requirements for designating a hedged item in a cash flow hedging relationship for these contracts;
introduce new disclosure requirements to enable investors to understand the effects of such contracts on a company's financial performance and cash flows.

The amendments will be effective for fiscal years beginning on or after January 1, 2026. Early adoption is permitted, although adequate disclosure must be given.

The Company does not expect these amendments to have a significant impact on its financial statements.

3. FORMAT OF THE FINANCIAL STATEMENTS

BasicNet S.p.A. presents its income statement by nature of cost items; the assets and liabilities are classified between current and non-current. The statement of cash flows was prepared applying the indirect method. The format of the financial statements applied the provisions of Consob Resolution No. 15519 of July 27, 2006 and Notice No. 6064293 of July 28, 2006 on financial disclosure requirements.

4. ACCOUNTING POLICIES

The present financial statements were prepared on the going concern basis, and in accordance with the accruals principle. The financial statements are presented in Euro and all values are rounded into thousands of Euro.

The main accounting policies adopted in the preparation of the financial statements at December 31, 2025 are disclosed below:

Revenue recognition

Revenues derive from Company operations in the ordinary course of business and comprise revenues from sales and services. Revenues are recognised net of sales tax, returns and discounts.

Revenues from contracts with customers rare recognised when the control of the goods and services is transferred to the client for an amount which reflects the consideration that the Company expects to receive in exchange for these goods and services. The Company has concluded that generally it acts as the Principal for the agreements from which it receives revenues, as usually it controls the goods and services before their transfer to the customer. In calculating the sales transaction price for goods, the Company considers the effects from variable fees, significant financial components and non-monetary fees. Where the fee concluded in the contract includes a variable amount, such as that connected to a right of return, the Company estimates the amount of the fee to which it will be entitled in exchange for the transfer of the goods to the customer.

Recognition of costs and expenses

Costs and expenses are recognised in accordance with the accruals principle.

Interest income and expenses, and income and charges

Interest income and expenses and other income and expenses are recorded and shown in the financial statements on the accrual basis.

In accordance with IAS 23 – Borrowing costs, the financial charges directly attributable to the purchase, construction and production of the asset which requires a significant amount of time before use or sale are capitalised together with the value of the asset. Such an event has not arisen up to the present moment for the company. If these conditions are not met the financial charges are expensed directly to the income statement.

Dividends

Dividends received

Dividends from investees are recognised in the income statement when the right to receive the dividend is established.

Dividends distributed

Dividends distributed are represented as changes in shareholders' equity in the year in which the Shareholders' AGM approves the distribution and payment.

Translation of balances in foreign currencies

Revenues and income, costs and charges related to currency transactions are recorded at the exchange rate at the transaction date.

Income taxes

Income taxes include all the taxes calculated on the assessable income of the Company. Taxes on income are recognized in profit and loss, except where they relate to items charged or credited directly to equity, in which case the tax effect is also recognized directly in equity.

Other taxes not related to income, such as taxes on property and share capital, are included under operating charges.

Deferred taxes are calculated on all the temporary differences arising between the assessable income of an asset or liability and the relative book value in the financial statements, with the exception of the goodwill not fiscally deductible and of those differences deriving from investments in subsidiaries for which a writedown is not expected in the future.

Deferred tax assets on fiscal losses and unutilised tax credits carried forward are recognised only for those amounts for which it is probable there will be future assessable income to recover the amounts. The deferred tax assets and liabilities are offset when the income tax is applied by the same fiscal authority and when there is a legal right of compensation.

They are measured at the tax rates that are expected to apply to the period when the temporary difference is reversed.

The Company adhered to the tax consolidation in accordance with Article 117 and thereafter of the CFA – Presidential Decree No. 917 of December 22, 1986 together with all of the wholly-owned Italian subsidiary companies. BasicNet S.p.A. acts as the consolidating company and calculates a single assessable base for the Group of companies adhering to the national tax consolidation and therefore benefits from the possibility of offsetting assessable income with assessable losses in a single tax declaration.

On September 30, 2019, the Company filed for the renewal of the Patent Box Agreement (2015-2019) in relation to the indirect use of intangible assets (designs) within the scope of intercompany transactions for the period 2020-2024. At the same time, the Company is taking advantage of the "Patent Box" benefit for the indirect use of intangible assets (designs and models and copyrighted software) as part of transactions with third parties, pursuant to the regulations of Article 1, paragraphs 37 - 45 of Law No. 190/2014 and Ministerial Decree 28.11.2017 for the period 2020-2024.

Earnings per share/Diluted earnings per share

In accordance with paragraph 4 of IAS 33 – Earnings per share, this latter is only presented at consolidated financial statement level.

Provisions and contingent liabilities

BasicNet S.p.A. may be involved in legal and tax disputes, concerning specific issues and in various jurisdictions. Considering the uncertainties relating to these issues, it is difficult to predict with certainty any future payments required. In addition, the Company has instigated legal disputes for the protection of its Trademarks, and of its products, against counterfeit products. The cases and disputes against the Company often derive from complex legal issues, which are often subject to varying degrees of uncertainty, including the facts and circumstances relating to each case, jurisprudence and different applicable laws.

In the normal course of business, Management consults with its legal consultants and experts on legal matters.

The Company accrues a liability against disputes when it considers it is probable that there will be a financial payment made and when the amount of the losses arising can be reasonably estimated.

The contingent liabilities are not recorded in the financial statements, but are reported as a disclosure in the Notes unless the probability is remote. In accordance with paragraph 10 of IAS 37 – Provisions, contingent liabilities and contingent assets a contingent liability is (a) a possible obligation which derives from past events and whose existence will be confirmed only on the occurrence or otherwise of one or more future uncertain events, not entirely under the control of the enterprise, or (b) a current obligation which derives from past events but which cannot be recorded in the financial statements as the payment is improbable or cannot be reliably estimated.

Use of estimates

The estimates and assumptions are reviewed periodically and the effects of all variations are immediately recognised in the income statement.

Intangible Assets

An intangible asset is a non-monetary asset, identifiable and without physical substance, controllable and capable of generating future economic benefits. Intangible assets are recognised at purchase and/or production cost, including the costs of bringing the asset to its current use net of accumulated amortisation and any loss in value. Amortisation begins when the asset is available for use and is recognised on a straight-line basis over the residual estimated useful life of the asset.

Software development

Concessions, brands and similar rights

The patent rights are amortised over ten years.

Plant, machinery and other assets

Plant and equipment are recorded at purchase or production costs, including accessory charges and direct and indirect costs, for the amount reasonably attributable to the assets.

Subsequent expenditures are only capitalised where they increase the future economic benefits of the asset to which they relate. All other costs are expensed as incurred.

Plant and equipment are amortised on a straight-line basis over the estimated useful life of each asset. The depreciation rates by asset category are shown below:

Description	Estimated useful life years
Plant & machinery	4-8
Furniture and furnishings	5-8
Motor vehicles	4
EDP	5-8

Ordinary maintenance costs are fully charged to the income statement.

Advances and costs for property, plant and equipment in progress which are not yet utilised in the operating activities are reported separately.

Leased assets

Right-of-use assets

The Company recognises the usage right assets at the initial leasing date (i.e. the date on which the underlying asset is available for use). The right-of-use assets are measured at cost, net of accumulated amortisation and impairments, adjusted for any remeasurement of the lease liabilities.

The cost of the right-of-use assets includes the amount of the lease liabilities recognised, the initial direct costs incurred and the payment of leases at the commencement date or before, net of any incentives received. Unless the Company does not have the reasonable certainty of obtaining ownership of the leased asset on conclusion of the leasing contract, the usage right assets are amortised on a straight-line basis for a period covering the lesser between the estimated useful life and the lease duration.

Right-of-use assets are subject to impairment.

Lease liabilities

At the lease commencement date, the Company recognises the lease liabilities measuring them at the present value of the payments due for the lease not yet settled at that date. The payments due include the fixed payments (including the fixed payments in substance), net of any lease incentives to be received, the variable lease payments which depend on an index or a rate and the amounts expected to be paid as guarantee on the residual value. The lease payments include also the exercise price of a purchase option where it is reasonably certain that this option shall be exercised by the Company and the lease termination penalty payments, where its duration takes account of the exercise by the Company of the termination option on the lease.

The variable lease payments not depending on an index or a rate are recognised as costs in the period in which the event or the condition generating the payment occurs. In calculating the present value of the payments due, the Company uses the incremental borrowing rate at the commencement date where the implicit interest rate cannot be readily determined.

Short-term leases and low value asset leases

The Company applies the exception for the recognition of short-term leases for machinery and equipment (i.e. leasing with a duration of 12 months or less from the commencement date and not containing a purchase option). The Company has also applied the exception for leases concerning assets of a modest value with regards to the leasing contracts on office equipment whose value is considered low (i.e. below Euro 5,000).

The short-term lease charges and those for low value assets are recognised as costs on a straight-line basis over the lease duration.

Impairments

The carrying value of the assets of the Company are measured at each reporting date to determine whether there has been a loss in value, in which case an estimate is made of the recoverable value of the asset. A loss in value (impairment) is recorded in the income statement when the carrying value of an asset or a cashgenerating unit exceeds its recoverable value.

The indefinite intangible assets (including goodwill) are tested annually and whenever there is an indication of a possible loss, in order to determine whether a loss in value has occurred.

Measuring recoverable amount

The recoverable value of a non-financial asset is the higher of the fair value less costs to sell and the value in use. For the determination of the value in use, the future cash flows are discounted utilising a rate which reflects the current market value of money and of the related risks of the activity. In the case of activities which do not generate cash flows sufficiently independent, it is necessary to calculate the recoverable value of the cash-generating unit to which the asset belongs.

Write-back of value

The value is recovered when changes take place in the valuations to determine the recoverable value. The recoverable value is recorded in the income statement adjusting the book value of the asset to its recoverable value. This latter must not be above the value which would have been determined, net of depreciation, if no loss in value of the asset had been recorded in previous years.

Equity invest. & other financial assets

Investments in subsidiaries, associates and joint ventures

In the separate financial statements of BasicNet S.p.A. the investments in subsidiaries, associates and joint ventures are recorded at cost, adjusted for any loss in value; the cost includes any directly attributable accessory charges. The positive difference, arising on purchase, between the acquisition cost and the share of net equity of the investment of the Company is, therefore, included in the carrying value of the investment.

Where there is an indication of a loss, the carrying value of the investment must be compared with the recoverable value, represented by the higher between the fair value, net of selling costs, and the value in use. For non-listed investments, the fair value is determined with reference to binding sales agreement. The value in use is determined discounting the expected cash flows from the investment at the weighted average cost of capital, net of the financial debt. The cash flows are determined on the basis of reasonable and identifiable assumptions, represented by the best estimates of the future economic conditions.

Where an impairment loss exists, it is recognised immediately through the income statement. Where the reasons for the write-down no longer exist, the value of the investment is restored within the limit of the original cost through the income statement.

Where the share of losses pertaining to the company in the investment exceeds the carrying value of the investment, the value of the investment is written down and the share of further losses is recorded as a provision under liabilities if the Company has the obligation to cover such losses.

Other investments

Investments other than those in subsidiaries, associated companies and joint ventures are recognised under non-current assets or current assets if held within the equity of the Company for a period, respectively, of greater than, or not greater than, 12 months.

On acquisition, they are classified to the following categories:

"financial assets available-for-sale" within non-current or current assets;
"fair value assets with changes to the book value to the income statement", within current assets if heldfor-trading.

The other investments classified as "financial assets available-for-sale" are measured at fair value; the change to the values of these investments are recognised to a net equity reserve through the other comprehensive income statement items, which will be reversed to the income statement on sale or impairment.

Other non-listed investments classified as "financial assets available-for-sale" for which the fair value may not be reliably estimated are valued at cost, adjusted for impairments to the income statement, according to IAS 39 – financial instruments: recognition and measurement.

The reduction in value of other investments classified as "financial assets available-for-sale" may not be subsequently reversed.

Changes in the value of other investments classified as "financial assets at fair value with changes recorded in the income statement" are recognised directly to the Income Statement.

Other financial assets

Financial assets consist of loans are recorded at their estimated realisable value.

Net inventories

Inventory is valued under the average weighted cost method.

Inventories are measured at the lower of purchase or production cost and their net realisable value.

Inventories include incidental charges and direct and indirect costs that can be reasonably allocated. Obsolete and slow-moving inventories are written down in relation to their possible utilisation or realisable value. When in future periods the reasons for the write-down no longer exist, they are restored to the original value.

Receivables and other current assets

Receivables recorded under current assets are stated at their nominal value, which substantially coincides with the amortised cost. The initial value is subsequently adjusted to take account of any write-downs, which reflects the bad debt estimate. The Company applies the simplified approach to calculating expected losses, fully recognising the expected loss at the reporting date according to historic information supplemented by forward looking considerations. Medium/long-term receivables which include an implicit interest component are discounted utilising an appropriate market rate. Receivables transferred without recourse, in which all the risks and benefits are substantially transferred by the owner of the financial assets to the factoring company, are reversed in the financial statements at their nominal value.

Cash and cash equivalents

The liquid assets principally relate to current bank accounts and cash. They are recorded for amounts effectively available at year end.

The cash equivalents are invested in highly liquid temporary financial instruments.

Accruals and prepayments

The account includes amounts related to two accounting periods, in accordance with the accruals concept.

Treasury Shares

Treasury shares are recognised as a deduction from equity. The original cost of the treasury shares and the revenues deriving from any subsequent sale are recognised as equity movements.

Provisions for risks and charges

Employee benefits

The Post-Employment Benefit in accordance with Italian legislation is quantified as a defined benefit plan and is measured in accordance with the "Projected Unit Credit Method".

On June 16, 2011, the IASB issued an amendment to IAS 19 Employee Benefits. The new version of IAS 19 requires, in particular, for post-employment benefits, the recognition of the changes of the actuarial gains/losses under other items of the Comprehensive Income Statement. The cost relating to employment services, as well as the interest on the "time value" component in the actuarial calculations remain in the profit and loss account.

Payables

Financial payables are recorded at their nominal value which approximates the amortised cost. The book value of the trade and other payables at the balance sheet date approximates their fair value. The book value of the trade and other payables at the balance sheet date approximates their fair value.

Cash flow hedges and accounting of relative operations

It is recalled that the BasicNet S.p.A. does not undertake contracts for speculative purposes.

These instruments are initially recorded at their fair value, and subsequently measured according to whether they are "hedged" or "not hedged" as per IFRS 9.

It is recalled that BasicNet S.p.A. does not undertake derivative contracts for speculative purposes.

The hedging may be of two types:

Fair value hedges;
Cash flow hedges.

BasicNet S.p.A., before signing a hedge contract, undertakes a close examination of the relationship between the hedge instrument and the item hedged, in view of the objectives to reduce the risk, also evaluating the existence and the continuation over the life of the derivative financial instrument of the effectiveness requirements, necessary for the hedge accounting.

The Company does not utilise fair value hedge instruments.

a) Fair value hedges

The changes in their fair value are recognised in the income statement, together with the changes in the fair value of the relative assets and liabilities hedged. The Company does not utilise fair value hedge instruments.

b) Cash flow hedges

The part of the profit or loss of the hedge instrument, considered effective, is recorded directly in the comprehensive income statement; the non-effective part is however recorded immediately in the income statement. The accumulated amounts in the comprehensive income statement are recorded in the income statement in the year in which the scheduled hedge operation matures or the instrument hedged is sold, or when the effectiveness requirements for hedge accounting no longer exist.

c) Derivative financial instruments which do not have the effectiveness requirements for hedge accounting The derivative financial instruments which do not comply with the requirements of IFRS 9 for the identification of the hedge, where present, are classified in the category of financial assets and liabilities measured at fair value through the profit and loss account.

Hierarchy of Fair Value according to IFRS 7

IFRS 7 requires that the classification of financial instruments measured at fair value is determined based on the quality of the input sources used in the valuation.

The IFRS 7 classification implies the following hierarchy:

level 1: determination of fair value based on prices listed ("unadjusted") in active markets for identical assets or liabilities;
level 2: determination of fair value based on other inputs than the listed prices included in "level 1" but which are directly or indirectly observable. This category includes the instruments with which the Company mitigates the risk deriving from fluctuations in interest rates and currencies;
level 3: determination of fair value based on valuation models whose input is not based on observable market data ("unobservable inputs").

5. OTHER INFORMATION

The subsequent events to the end of the year and the outlook for the current year are reported in the Directors' Report.

Information required by Law No. 124 of August 4, 2017, Article 1, paragraph 125

In accordance with Article 1, paragraph 125 of Law 124/2017, the Company has not received any grants from public bodies in excess of Euro 10 thousand.

K-Way transaction

BasicNet established the three sub-holdings K-Way TopCo (wholly-owned), K-Way MidCo (whollyowned by K-Way TopCo) and K-Way BidCo (in turn, wholly-owned by K-Way MidCo);
BasicNet transferred a stake comprising approx. 57% of the share capital of K-Way S.p.A. to K-Way TopCo;
Permira and some key K-Way managers made cash contributions to K-Way TopCo of more than Euro 170 million;
The stake in K-Way and the cash contributions were in turn transferred by K-Way TopCo to K-Way MidCo and by the latter to K-Way BidCo;

K-Way BidCo then purchased the remaining stake in K-Way, constituting approx. 43% of the capital, from BasicNet, for an amount of approx. Euro 190.9 million following the price adjustments resulting from the calculation of the net financial position at the closing date;

The purchase price of Euro 125.9 million due from K-Way BidCo to BasicNet was paid in cash and through the granting of a Vendor loan for Euro 65 million.
In December, the Group completed the reverse merger of K-Way BidCo into K-Way, effective for accounting and fiscal purposes as of January 1, 2025.

The impact of this transaction on the BasicNet Group's consolidated financial statements resulted in:

an increase in shareholders' equity and cash and cash equivalents for cash contributions made by third parties, amounting to Euro 170 million;
The recognition to the income statement of transaction costs and other non-recurring extraordinary costs related to the transaction totalling Euro 20.3 million and the consequent reduction of cash and cash equivalents against the settlement of the respective payables;
the recognition of current taxes on capital gains realised by BasicNet S.p.A. for Euro 2.4 million.

Woolrich Transaction

In November, the BasicNet Group reached an agreement with investment fund L-Gam for the acquisition of Woolrich®, a storied American brand synonymous with authenticity, quality and outdoor heritage.

The transaction was completed through Tow S.p.A. (formerly Jesus Jeans S.r.l.), which acquired:

the trademark rights to Woolrich® for Europe from John Rich & Sons Inv. Hold. Co., for a cash consideration of Euro 11.55 million (Note 20);
100% of the shares of Woolrich Europe S.p.A., the company responsible for its distribution and retail operations, from Woolrich International Ltd. This transaction was completed for a total consideration of Euro 28.45 million, of which Euro 12.0 million was settled through the delivery of 1.2 million ordinary BasicNet shares at a unit value of Euro 10.0 per share, with the remainder paid in cash. Provision has also been made for the selling party to receive a potential variable deferred consideration, preliminarily estimated at Euro 2.0 million (Note 38).

an unsecured loan totalling Euro 58.0 million, disbursed to BasicNet S.p.A., with a five-year term including a nine-month grace period, repayable in quarterly instalments in arrears, at a contractual rate of 3-month Euribor + 100 bps p.a. with a margin ratchet mechanism. A portion of the proceeds was used to repay Woolrich Europe's outstanding debt at the closing date;
a secured loan (supported by a pledge over the shares of Tow and Woolrich Europe, together with a first demand guarantee provided by BasicNet S.p.A.) totalling Euro 12.0 million, with a seven-year term including an 18-month grace period, repayable in quarterly instalments in arrears, at a contractual rate of 3-month Euribor + 135 bps p.a. with a margin ratchet mechanism, with use restricted to the acquisition of the Woolrich® brand;
a revolving credit facility of up to Euro 20.0 million granted to Woolrich Europe S.p.A..

	Amount
Fixed cash component	16,450
Fixed component in treasury shares	12,000
Variable component ("earn-out")	2,000
Total paid	30,450
Price adjustment per IFRS 3	(3,576)
Net assets acquired
Intangible and tangible fixed assets	4,857
Right-of-use	35,785
Equity invest. & other financial assets	2,362
Net inventories	24,114
Trade receivables	21,091
Cash and cash equivalents	2,627
Loans	(59,099)
Payables for right-of-use	(35,785)
Trade payables	(31,220)
Other net current assets and liabilities	(2,109)
Other net non-current assets and liabilities	13,535
Net identifiable assets	(23,842)
Consolidation differences	50,716

the consideration agreed between the parties was adjusted, for the portion paid through the delivery of treasury shares, to the fair value or stock market value of those shares on the day of the closing.

Sundek Transaction

	Amount
Fixed cash component	-
Fixed component in treasury shares	10,000
Variable component ("earn-out")	4,000
Total paid	14,000
Net assets acquired
Intangible and tangible fixed assets	3,636
Right-of-use	8,298
Net inventories	6,777
Trade receivables	907
Cash and cash equivalents	603
Loans	(24,488)
Payables for right-of-use	(8,298)
Trade payables	(2,494)
Other net current assets and liabilities	947
Other net non-current assets and liabilities	(1,693)
Net identifiable assets	(15.807)
Consolidation differences	29,807

EXPLANATORY NOTES TO THE INCOME STATEMENT

6. DISCLOSURE BY OPERATING SEGMENT

As the Company simultaneously publishes the separate and consolidated financial statements, the operating segment information is provided only for the consolidated financial statements in accordance with IFRS 8 – Operating segments.

7. SERVICES TO GROUP COMPANIES

The "revenues for assistant services to Group companies" of Euro 15 million and originates from assistance and consultancy in administration and finance, payroll, commercial contract agreements and IT services provided by the Parent Company to the subsidiaries and include in addition the fees for the "Powered by" services.

8. ROYALTIES AND SOURCING COMMISSIONS

The breakdown of sourcing commissions by geographic area is reported below.

	FY 2025	FY 2024
Europe	1,302,430	1,432,875
The Americas	785,020	619,701
Asia and Oceania	4,240,364	6,530,395
Middle East and Africa	108,117	203,059
Total	6,435,930	8,786,030

Sourcing commissions stem from usage rights of the know-how and are charged to the licensee producers on the sales made by them to the licensees of the Network.

9. DIRECT SALES

The direct sales of products undertaken by the Company refer only to samples of clothing and footwear to licensees. The breakdown of sample sales is as follows:

	FY 2025	FY 2024
Net sales to third parties	67	12,350
Total direct sales	67	12,350

10. COST OF SALES

The breakdown of the cost of sales is as follows:

	FY 2025	FY 2024
Freight charges and accessory purchasing cost	19,781	92,911
Change in inventory of raw materials, ancillary, consumables and goods	-	-
Prototypes purchases and development	36,253	79,921
Others	3,797	10,304
Total cost of sales	59,831	183,136

11. OTHER INCOME

	FY 2025	FY 2024
Reversal of doubtful debts provision	228,220	-
Other income	303,265	1,194,077
Total other income	531,485	1,194,077

"Other income" in 2025 includes prior year accruals' reversals and other minor items.

12. SPONSORSHIP AND MEDIA COSTS

	FY 2025	FY 2024
Promotional expenses	241,016	192,303
Advertising	83,897	58,401
Total sponsorship and media costs	324,912	250,704

13. PERSONNEL COSTS

	FY 2025	FY 2024
Salaries and wages	6,850,738	6,468,621
Social security charges	2,809,881	2,187,523
Post-employment benefits	371,827	526,377
Total	10,032,446	9,182,521

Personnel costs include all charges relating to the provision of employment services of BasicNet S.p.A..

	Human resources at December 31, 2025			Human resources at December 31, 2024
Category
	Number		Average age		Number		Average age
	Male/		Male/		Male/		Male/
	Female	Total	Female	Avera	Female	Total	Female	Average
				ge
Executives	14 / 5	19	53 / 56	53	15 / 5	20	51 / 55	53
Managers	1 / -	1	48 / -	48	- / -	-	- / -	-
White collar	34 / 98	132	40 / 41	40	38 / 96	133	39 / 41	40
Blue-collar	- / 1	1	- / 50	50	1 / 1	2	44 / 49	46
Total	49 / 104	153	45 / 41	42	54 / 102	155	42 / 45	50

At December 31, 2025, the Group headcount was 153, as follows:

The average number of employees in 2025 was 153, comprising 19 executives, 1 senior manager, 131 white-collar employees and 2 blue-collar employees.

14. SELLING, GENERAL AND ADMINISTRATIVE COSTS AND ROYALTIES EXPENSES

The breakdown of service costs is presented in the table below:

	FY 2025	FY 2024
Commercial expenses	918,791	681,274
Rental, accessory and utility expenses	4,351,738	4,084,496
Directors and Statutory Auditors emoluments	8,938,944	2,572,275
Doubtful debt provision	1,067	678,763
Sales services	40,331	39,766
Professional consultants	4,466,023	1,506,290
Other general expenses	3,863,180	3,456,737
Total selling, general and administrative costs, and royalties	22,580,075	13,019,600

"Commercial expenses" include costs related to the commercial activities, travel expenses and consulting costs for stylistic and graphic material.

"Rental, accessory and utility expenses" principally relate to the variable charges of the offices of the company, owned by the subsidiary Basic Village S.p.A.

The company's remuneration policy, as well as Directors and Statutory Auditors emoluments for the offices held, pursuant to Article 78 of Consob Regulation No. 11971/99 and thereafter are reported in the Remuneration Report pursuant to Article 123-ter of the CFA (reported net of tax charges) which is available on the company's website www.basicnet.com/contenuti/datifinanziari/assembleeazionisti.asp, to which reference should be made.

"Professional consultants" refers to charges from legal consultants, professional fees related to reorganisation activities, as well as legal audit and tax assistance services, to which were added during 2025 the costs connected to the corporate transactions of the sale of the stake in Kway and the purchase of Woolrich Europe and Sundek S.p.A.

"Other general expenses" includes bank charges, other taxes, consumption materials, hire charges, and corporate and other minor expenses.

15. AMORTISATION & DEPRECIATION

	FY 2025	FY 2024
Intangible assets	2,448,293	2,185,162
Rights-of-use	1,271,416	1,317,207
Property, plant and equipment	533,202	518,842
Total amortisation & depreciation	4,252,911	4,021,212

See Notes 20, 21 and 22 for details of fixed assets and related changes during the year.

16. NET FINANCIAL INCOME/(CHARGES)

	FY 2025	FY 2024
Bank interest	227,963	3,830
Intercompany interest income	5,061,870	1,291,992
Interest income on securities	1,801,128	-
Other interest income	5,755	-
Bank interest charges	(1,281,308)	(1,218,384)
Interest on medium/long term loans	(291,747)	(69,494)
Medium/long term loan charges	(844)	-
Intercompany interest charges	(134,153)	(374,290)
Interest IFRS 16	(18,912)	(30,581)
IAS 19 interest	(31,389)	(30,642)
Commissions on loans and bank accounts	(107,499)	(65,837)
Other interest expenses	(16,280)	(32,169)
Total financial income and charges	5,214,585	(525,574)
Exchange gains	280,277	273,847
Exchange losses	(433,925)	(369,053)
Net exchange gains/(losses)	(153,648)	(95,206)
Total financial income/(charges)	5,060,937	(620,780)

"Intercompany interest income and charges" derives from operations during the year and regulated through intercompany accounts, remunerated at market rates.

"Interest on medium/long-term loans" refers to the loans described at Note 32.

"Exchange gains realised" in 2025 amounted to Euro 117 thousand and "exchange losses realised" amounted to Euro 272 thousand. The translation of credit and debit balances at year-end resulted in the recognition of "unrealised exchange gains" of Euro 163 thousand and "unrealised exchange losses" of Euro 162 thousand.

17. DIVIDENDS

The company during FY2025 did not receive any dividends.

18. INVESTMENT INCOME (CHARGES)

Investment income (charges) are detailed in the following table:

	FY 2025	FY 2024
Gains on sale of equity investment in Kway	140,098,412	-
Loss on sale of equity investment in Fashion Srl	(95,720)	-
Write-down of investment in Basic Investment	(3,000,000)	-
Total amortisation & depreciation	137,002,692	-

The following transactions were carried out during the year:

1. transfer of 40% of the stake in K-Way S.p.A to the subsidiary K-Way Bidco S.r.l., as part of the broader transaction referred to in Note 5 and recognition of a capital gain of Euro 140 million;
1. in December 2025 sale of the stake in Fashion Srl, recorded at a value of Euro 195,720 and sold at a value of Euro 100,000, recognising a capital loss of Euro 95,720;
1. waiver of the receivable of Euro 3 million from Basic Investment, with a consequent increase in the value of the shareholding, subsequently written down by the same amount.

19. INCOME TAXES

Income taxes amount to Euro 380 thousand and consist of IRES (corporate income tax) of Euro 684 thousand, deferred tax assets ascertained of Euro 146 thousand, prior year taxes of Euro 7 thousand and the positive effect of the application of the Patent Box benefit of Euro 199 thousand.

The reconciliation between the theoretical and actual rate is shown below:

	FY 2025	FY 2024
Profit before taxes	126,660,246	7,138,987
Income tax rate	24.0%	24%
Theoretical IRES	(30,398,459)	(1,713,357)
Permanent tax differences effect	(1,438,458)	2,099,400
Tax effect of Participation Exemption on capital gain on sale of K Way S.p.A	31,202,984	-
Prior year taxes	(7,482)	(39,953)
Patent Box benefit	198,509	529,194
IRAP	(32,863)	(83,843)
Other changes	95,851	29,007
EFFECTIVE TAX CHARGE	(379,917)	820,448
Effective tax rate	0.3%	11.5%

EXPLANATORY NOTES TO THE BALANCE SHEET

20. INTANGIBLE ASSETS

The breakdown of intangible assets at December 31, 2025 compared to the previous year-end and the movements during the year are reported in the table below:

		December 31, 2025 December 31, 2024	Changes
Concessions, brands and similar rights	207,349	239,706	(32,357)
Other intangible assets	5,488,117	4,545,550	942,567
Industrial patents & intellectual property rights	20,903	31,473	(10,570)
Total intangible assets	5,716,369	4,816,729	899,640

The changes in the original costs of the intangible assets were as follows:

	Concessions, brands, similar rights	Other intangible assets	Industrial patents	Total
Historic cost at 1.1.2024	5,400,858	41,719,122	169,509	47,289,489
Investments	43,958	2,730,603	-	2,774,561
Divestments	-	-	-	-
Corporate transactions	-	-	-	-
Historic cost at 31.12.2024	5,444,817	44,449,725	169,509	50,064,050
Investments	57,723	3,290,209	-	3,347,933
Divestments	-	-	-	-
Corporate transactions	-	-	-	-
Historic cost at 31.12.2025	5,502,541	47,739,934	169,509	53,411,984

The changes in the relative accumulated amortisation provisions were as follows:

	Concessions, brands, similar rights	Other intangible assets	Industrial patents	Total
Acc. Amort. at 1.1.2024	(5,102,223)	(37,832,471)	(127,466)	(43,062,159)
Amortisation	(102,888)	(2,071,704)	(10,570)	(2,185,162)
Corporate transactions	-	-	-	-
Acc. Amort. at 31.12.2024	(5,205,111)	(39,904,175)	(138,036)	(45,247,321)
Amortisation	(90,081)	(2,347,642)	(10,570)	(2,448,293)
Corporate transactions	-	-	-	-
Acc. Amort. at 31.12.2025	(5,295,191)	(42,251,817)	(148,606)	(47,695,614)

	Concessions, brands, similar rights	Other intangible assets	Industrial patents	Total
Book value at 1.1.2024	298,635	3,886,651	42,043	4,227,330
Investments	43,958	2,730,603	-	2,774,561
Divestments
Corporate transactions
Amortisation	(102,888)	(2,071,704)	(10,570)	(2,185,162)
Book value at 31.12.2024	239,706	4,545,550	31,473	4,816,729
Investments	57,723	3,290,209	-	3,347,933
Divestments	-	-	-	-
Corporate transactions	-	-	-	-
Amortisation	(90,081)	(2,347,642)	(10,570)	(2,448,293)
Book value at 31.12.2025	207,349	5,488,117	20,903	5,716,369

The changes in intangible assets during 2025 are shown in the table below:

At December 31, 2025, the intangible assets report investments of Euro 3.3 million and amortisation of Euro 2.4 million.

The account increased Euro 3.3 million, principally due to the implementation of new software programmes realised internally and decreased Euro 2.4 million due to the amortisation for the year.

The investments in "concessions, brands and similar rights" are due to the purchase of software licenses.

The breakdown of "other intangible assets" is as follows:

		December 31, 2025 December 31, 2024	Changes
Software development	5,486,324	4,542,865	943,459
Other intangible assets	1,793	2,685	(892)
Total other intangible assets	5,488,117	4,545,550	942,567

21. RIGHTS-OF-USE

The Company adopted IFRS 16 and utilised the exceptions under the standard on leasing contracts which, at the date of initial application, have a duration of equal to or less than 12 months and which do not contain a purchase option ("short-term leasing") and on leases whose underlying asset is of a low value ("low value asset").

	December 31, 2025 December 31, 2024		Changes
Rights-of-use	1,068,865	2,401,035	(1,332,170)
Total right-of-use	1,068,865	2,401,035	(1,332,170)

The value recognised refers entirely to the Intercompany Right-of-use to BasicVillage S.p.A.

The changes in the right-of-use were as follows:

	Historic cost	Accumulated depreciation	Net book value
Values
at 1.1.2024	9,015,150	(5,451,034)	3,564,116
Investments	154,126	-	154,126
Disposals and other changes
Depreciation	-	(1,317,207)	(1,317,207)
Values at 31.12.2024	9,169,276	(6,768,241)	2,401,035
Investments
Disposals and other changes	(67,852)	7,099	(60,754)
Depreciation	-	(1,271,416)	(1,271,416)
Values at 31.12.2025	9,101,423	(8,032,558)	1,068,865

22. PLANT, MACHINERY AND OTHER ASSETS

The breakdown of plant, machinery and other assets at December 31, 2025 compared to the previous year is shown in the table below:

		December 31, 2025 December 31, 2024	Changes
Plant & machinery	7,558	10,212	(2,654)
Industrial & commercial equipment	81,426	99,426	(17,999)
Other assets	1,807,746	1,882,114	(74,368)
Total plant, machinery and other assets	1,896,730	1,991,752	(95,022)

The changes in the original costs were as follows:

	Plant & machinery	Industrial & commercial equipment	Other assets	Total
Historic cost at 1.1.2024	282,615	554,189	9,616,374	10,453,178
Investments	6,400	19,112	666,575	692,087
Divestments	-	-	(53,999)	(53,999)
Conferments	-	-	-	-
Historic cost at 31.12.2024	289,015	573,301	10,228,950	11,091,266
Investments	-	9,363	439,205	448,567
Divestments	-	-	(120,194)	(120,194)
Conferments	-	-	-	-
Historic cost at 31.12.2025	289,015	582,664	10,547,960	11,419,639

Acc. Deprec.

Plant & machinery Industrial & commercial equipment Other assets Total Acc. Deprec. at 1.1.2024 (275,615) (442,052) (7,913,363) (8,631,030)

Depreciation (3,187) (31,823) (483,832) (518,842) Divestments - - 50,359 50,359 Conferments - - - -

at 31.12.2024 (278,803) (473,875) (8,346,836) (9,099,514) Depreciation (2,654) (27,362) (503,186) (533,202)

The changes in the relative accumulated amortisation provisions were as follows:

Divestments	-	-	109,808	109,808
Conferments	-	-	-	-
Acc. Deprec. at 31.12.2025	(281,457)	(501,237)	(8,740,214)	(9,522,909)
	Plant & machinery	Industrial & commercial equipment	Other assets	Total
Book value at 1.1.2024	7,000	112,137	1,703,011	1,822,148
Investments	6,400	19,112	666,575	692,087
Divestments	-	-	(3,640)	(3,640)
Depreciation	(3,187)	(31,823)	(483,832)	(518,842)
Conferments	-	-	-	-
Book value at 31.12.2024	10,212	99,426	1,882,114	1,991,752
Investments	-	9,363	439,205	448,567
Divestments	-	-	(10,387)	(10,387)
Depreciation	(2,654)	(27,362)	(503,186)	(533,202)
Conferments	-	-	-	-
Book value at 31.12.2025	7,558	81,426	1,807,746	1,896,730

This account "other assets" consist of:

		December 31, 2025 December 31, 2024	Changes
EDP	895,126	908,953	(13,827)
Furniture and fittings	273,349	306,300	(32,951)
Motor vehicles	72,222	106,674	(34,452)
Other assets	567,049	560,187	6,862
Total other assets	1,807,746	1,882,114	(74,368)

Investments in the year relate to the acquisition of EDP for Euro 327 thousand, furniture, fittings and telephone for Euro 108 thousand and other minor assets.

The account "other assets" includes the purchase cost of an IT collection comprising rare pieces which represents significant elements and representative of the IT revolution, in the 1970's and 1980's with the advent of the new personal computer. This collection is utilised in many events related to the promotion of the brands and logos of the Group.

The net book value of property, plant and equipment acquired according to the finance lease formula is reported below:

	Net book at December 31, 2025	Net book at December 31, 2024	Changes
EDP	224,600	303,000	(78,400)
Motor vehicles	52,123	72,972	(20,849)
Total	276,723	375,972	(99,249)

The net book value at December 31, 2025 of property, plant and equipment acquired according to the finance lease formula relates to EDP for approx. Euro 225 thousand and motor vehicles for approx. Euro 52 thousand.

23. EQUITY INVESTMENTS AND OTHER FINANCIAL ASSETS

Reference should be made to Attachment 2 for information on the book value of the investments in subsidiaries and changes in the year and the relative portion of shareholders' equity.

	December 31, 2025	December 31, 2024	Changes
Investments in:
- Subsidiaries	141,997,523	137,811,949	4,185,574
- Other companies	127	127	-
Total investments	141,997,650	137,812,077	4,185,574
Receivables:
- Purchase Securities	50,100,000	-	50,100,000
- Other receivables	816,035	510,280	305,755
Total financial receivables	50,916,035	510,280	50,405,755
Total investments & other financial assets	192,913,685	138,322,357	54,591,328

In line with the practice adopted by other large listed groups in Italy, BasicNet S.p.A. identifies in the negative differential between the share of net equity held in the subsidiary and its book value an indicator of an impairment for the investments of control in its financial statements. In such cases, the company verifies for additional indicators of impairment and investigates their possible origin, undertaking an impairment test where appropriate. At December 31, 2025, it was not necessary to carry out an impairment test of a number of investments held.

The item "Purchase Securities" with maturity between April 2028 and April 2029 amounts to Euro 50.1 million, of which approximately Euro 15 million has a yield of 2.74% and approximately Euro 35 million has a yield of 3.10%.

"Other receivables" refer to security deposits and a receivable from a former Manager accrued during the year.

24. DEFERRED TAX ASSETS

The breakdown is shown below:

	December 31, 2025 December 31, 2024	Changes
Net deferred tax liability (asset) in the Financial Statements	489,130	350,894	138,236
Net def. tax liab. (asset) in Financial Statements	489,130	350,894	138,236

The deferred tax assets and liabilities recognised and their impact are reported in the table below:

		December 31, 2025			December 31, 2024
(In Euro thousands)	Temporary differences	Rate %	Tax effect	Temporary differences	Rate %	Tax effect
Deferred tax assets: - Excess doubtful debt provision not deductible - Inventory obsolescence provision	(1,299) (288)	24.00% 29.57%	(312) (85)	(1,041) (288)	24.00% 29.57%	(250) (85)
- Stock grant provision - Misc. charges temporarily non	(362)	24.00%	(87)	-	24.00%	-
deductible - Effect IAS 19 – Post-employment	(66)	24.00%	(16)	(53)	24.00%	(13)
benefits provision	44	24.00%	11	(13)	24.00%	(3)
Total	(1,971)		(489)	(1,395)		(351)
Deferred tax liabilities (asset) as per
financial statements Of which Net deferred tax liability (asset)			(489)			(351)

Deferred tax assets are recorded considering probable their recovery based on future profit expectations, and principally relate to non-deductible doubtful debt provisions (approx. Euro 312 thousand), the provision for stock grant costs (approx. Euro 87 thousand) and other minor items (approx. Euro 91 thousand).

25. NET INVENTORIES

The composition of the item is as follows:

	December 31, 2025	December 31, 2024	Changes
Finished products and goods	286,156	286,156	-
Inventory obsolescence provision	(286,156)	(286,156)	-
Total net inventories	-	-	-

"Inventories" include old season samples originally to be sold to licensees. At December 31, 2025, they were fully written down.

26. TRADE RECEIVABLES

	Dec. 31, 2025	Dec. 31, 2024	Changes
Trade receivables - Italy	106,416	147,556	(41,140)
Trade receivables - Abroad Doubtful debt provision	3,597,863 (1,299,223)	5,115,194 (1,572,973)	(1,517,330) 273,750
Total trade receivables	2,405,056	3,689,777	(1,284,721)

In particular, the breakdown of foreign receivables is as follows:

	December 31, 2025	December 31, 2024	Changes
Asia and Oceania	2,068,862	1,156,940	911,921
The Americas	1,056,161	3,162,742	(2,106,581)
Europe	441,074	644,639	(203,565)
Middle East and Africa	31,767	150,872	(119,105)
Total	3,597,863	5,115,194	(1,517,330)

"Trade receivables" were written down to their realisable value through the doubtful debt provision, although the majority of the receivables are secured by bank guarantees.

The provision at the end of the year represents a prudent estimate of the risk. The movements in the doubtful debt provision during the year were as follows:

	FY 2025	FY 2024
Doubtful debt provision at 01.01	1,572,973	5,735,452
Utilization for administration procedures and other losses	(28,721)	(4,860,816)
Release to contingency	(228,220)	-
Adjustment of provision on foreign currency receivables	(16,809)	19,574
Provisions in the period	-	678,763
Doubtful debt provision at 31.12	1,299,223	1,572,973

The utilisation of the provision relates to the write-off made on the certainty of the receivable irrecoverability and consequent tax deductibility of the loss.

The book value of receivables, all due within one year, is in line with their fair value.

27. OTHER CURRENT ASSETS

	December 31, 2025	December 31, 2024	Changes
Receivables from Group companies	203,157,796	44,199,061	158,958,735
Securities	40,000,000	-	40,000,000
Tax receivables	1,086,705	507,815	578,890
Other receivables	793,569	1,846,975	(1,053,407)
Total other current assets	245,038,070	46,553,851	198,484,219

The breakdown of "receivables from Group companies" is as follows:

	December 31, 2025	December 31, 2024	Changes
Trade receivables
Basic Village S.p.A with sole shareholder	401,108	239,834	161,274
BasicAir S.r.l. with sole shareholder	22,147	14,421	7,726
BasicItalia S.p.A with sole shareholder	1,418,817	1,992,254	(573,437)
BasicNet Asia Company Ltd. (Vietnam)	248,446	67,954	180,492
Fashion S.r.l.	-	329	(329)
Tow S.p.A. with sole shareholder	61,808	-	61,808
Kappa France S.a.s.	3,124,705	3,064,912	59,792
Kappa S.r.l. with sole shareholder	12,082,177	4,646,844	7,435,333
KappaRetail S.r.l. with sole shareholder	765,884	577,103	188,781
K-Way France S.a.s.	8,699	5,603	3,096
K-Way S.p.A. with sole shareholder	6,558,760	5,780,852	777,908
K-WayRetail S.r.l. with sole shareholder	2,542,569	1,854,322	688,248
Sebago Retail S.r.l. with sole shareholder	236,601	73,712	162,888
Sebago S.r.l. with sole shareholder	1,996,449	1,656,906	339,543
Superga Retail S.r.l. with sole shareholder	131,579	87,482	44,096
Superga S.r.l. with sole shareholder	1,422,538	1,517,335	(94,797)
K-Way TopCo S.r.l.	21,616	-	21,616
Basic Investments S.r.l. with sole shareholder	5,000	-	5,000
Gld Brands Limited	1,829	-	1,829
Kappa Sport Iberia S.L.	5,949	-	5,949

Total trade receivables	31,056,682	21,579,864	9,476,818
Financial receivables
Basic Village S.p.A with sole shareholder	32,769,759	8,637,194	24,132,565
BasicItalia S.p.A. with sole shareholder	5,789,320	-	5,789,320
KappaRetail S.r.l. with sole shareholder	766,713	1,325,470	(558,756)
K-Way S.p.A. with sole shareholder	2,900	430,225	(427,325)
K-WayRetail S.r.l. with sole shareholder	22	-	22
Sebago S.r.l. with sole shareholder	17,080,732	9,313,842	7,766,889
Superga S.r.l. with sole shareholder	3,344,182	2,912,467	431,715
Kappa S.r.l. with sole shareholder	2,538	-	2,538
K-Way Midco S.r.l. with sole shareholder	66,197,661	-	66,197,661
Tow S.p.A. with sole shareholder	37,217,071	-	37,217,071
Sundek S.p.A. with sole shareholder	8,729,908	-	8,729,908
Woolrich Europe S.p.A.	200,000	-	200,000
K-Way TopCo S.r.l.	310	-	310

Total financial receivables	172,101,115	22,619,197	149,481,917
Total	203,157,796	44,199,061	158,958,735

Financial receivables originate from loans and advances for the cash needs of the subsidiaries within the centralised treasury management; these receivables are at market interest rates and vary in accordance with the financial cash flow needs within the Group.

"Tax receivables" includes IRAP receivables for Euro 250 thousand, IRES receivables for Euro 670 thousand and withholdings on royalties totalling Euro 218 thousand.

"Other receivables" for Euro 0.5 million includes the premium paid to the insurance company against the Directors Termination Indemnities for the Chairman of the Board of Directors of Euro 1.5 million, as approved by the Shareholders' Meeting for the 2025-2027 three-year mandate, as described in the Remuneration Report to which reference should be made and other minor amounts.

During the year, short-term securities were acquired totalling Euro 40 million as a temporary investment of the liquidity resulting from the K-Way transaction described in Note 5.

These securities mature in April 2026 and currently have an expected yield of between 2.20% and 2.70%.

28. PREPAYMENTS

The table below shows the breakdown of the account:

	December 31, 2025 December 31, 2024		Changes
Rentals, leases, hire and other	11,276	5,180	6,096
Assistance and maintenance contract	844,954	480,114	364,840
Interest on loans	399,233	-	399,233
Others	204,126	246,538	(42,411)
Total prepayments	1,459,590	731,832	727,758

29. CASH AND CASH EQUIVALENTS

	December 31, 2025 December 31, 2024		Changes
Bank and postal deposits	2,827,244	1,205,410	1,621,834
Cash in hand and similar	7,667	7,870	(203)
Total cash and cash equivalents	2,834,911	1,213,280	3,243,465

"Bank deposits" refer to temporary current account balances principally due to receipts from clients.

30. SHAREHOLDERS' EQUITY

		December 31, 2025 December 31, 2024	Changes
Share capital	31,716,673	31,716,673	-
Treasury shares	(31,999,682)	(30,861,084)	(1,138,598)
Legal reserve	6,343,335	6,343,335	-
Treasury shares in portfolio reserve	31,999,682	30,861,084	1,138,598
Other reserves
- cash flow hedge reserve	-	-	-
- remeasurement reserve for defined benefit plans (IAS 19)	(81,081)	(105,586)	24,505
- conferment reserve	60,903,373	60,903,373	-
- merger reserve	264,495	264,495	-
- reserve for share-based payments to employees (IFRS 2)	361,699	-	361,699
- stock grant reserve	192,291	-	192,291
- retained earnings	42,357,829	34,395,888	7,961,941
- unrealised exchange gains reserve	115,801	-	115,801
Net profit/(loss)	126,280,329	7,959,435	118,320,894
Total Shareholders' Equity	268,454,743	141,477,612	126,977,131

The account includes:

the "share capital", which amounts to Euro 31,716,673, comprising 54,000,000 ordinary shares without par value;
the "legal reserve", amounting to approx. Euro 6.3 million, did not record further increases in the year;
the "reserve for treasury shares in portfolio", amounting to Euro 32 million, which equates to the carrying value of the BasicNet shares held in portfolio at year-end, and was set up through utilisation of the "Retained earnings" following the Shareholders' AGM resolution, which authorised the purchase of treasury shares;
the "re-measurement reserve for employee defined benefit plans (IAS 19)" refers to the changes in the actuarial gains/losses ("re-measurement"). The valuation is shown net of the tax effect. This reserve is not available for distribution;
the "retained earnings", which decreased compared to the end of 2024 following the allocation of the result for the previous year, as approved by the Shareholders' AGM of April 17, 2025;
the "conferment reserve", amounting to approx. Euro 61 million, did not record further changes in the year;
the "merger reserve", amounting to approx. Euro 0.3 million, did not record further changes in the year;
the "reserve for share-based payments to employees (IFRS 2)" amounting to approximately Euro 0.4 million was set aside following the subscription of an incentive plan that provides for remuneration through the issuance of shares, assigned to a defined number of employees and subject to the achievement of specific objectives and the completion of a specific period of employment in the company. The reserve recognises the fair value of assigned instruments and is not distributable;
the "stock grant reserve" amounting to approximately Euro 0.2 million refers to the share of the IFRS2 reserve set aside by the companies of the Group that BasicNet acquired with a corresponding increase in the related shareholding. Reference should be made to Attachment 2 of the Explanatory Notes, which provides details of the carrying amount of the investments in subsidiaries.

Pursuant to Article 110 of Legislative Decree No. 104/2020, which allowed for the partial realignment of the tax value of the brands then the portfolio to the higher value recorded in the financial statements, the Company in 2020 tied up its reserves subject to tax suspension for an amount of Euro 5.2 million equal to the higher values realigned.

During the year, 1,926,465 treasury shares were acquired, in accordance with Shareholders' Meeting resolutions.

In the same period, a total of 2,585,965 treasury shares were sold as consideration in the acquisition of holdings in Woolrich Europe S.p.A. by the subsidiaries Tow S.p.A. and Sundek S.p.A., respectively for 1,200,000 and 1,385,965 shares.

At December 31, 2025, the Company held 6,155,000 treasury shares, equal to 11.40% of the share capital.

The other gains and losses recorded directly in equity in accordance with IAS 1 are reported below and recognised to the Comprehensive Income Statement.

(Euro thousands)	December 31, 2025	December 31, 2024	Changes
Re-measurement of post-employment benefits (IAS 19) (*)	32	(52)	85
Tax effect relating to the Other items of the comprehensive income statement	(8)	13	(21)
Reserve for share-based payments to employees (IFRS 2)	362	-	362
Total other gains/(losses), net of tax effect	386	(40)	426

(*) items which may not be reclassified to the profit and loss account

The tax effect relating to "Other gain/losses" is as follows:

	December 31, 2025		December 31, 2024
(Euro thousands)	Gross value	Tax effect	Net book	Gross value	Tax effect	Net book
Re-measurement of post-employment benefits (IAS 19) (*)	32	(8)	25	(52)	13	(40)
Reserve for share-based payments to employees (IFRS 2)	362	-	362	-	-	-
Total other gains/(losses), net of tax effect	394	(8)	386	(52)	13	(40)

(*) items which may not be reclassified to the profit and loss account

The statement on the availability of the reserves at December 31, 2025 is shown below:

STATEMENT ON UTILISATION AND DISTRIBUTION OF RESERVES AS PER ART. 2427 OF THE C.C. NO.7-BIS

			December 31, 2025 December 31, 2024	Changes
Share capital		31,716,673	31,716,673	-
Treasury shares Share premium reserve		(31,999,682) -	(30,861,084) -	(1,138,598) -
Legal reserve IAS adjustment reserve	B	6,343,335 -	6,343,335 -	- -
Reserve for treasury shares in portfolio Ordinary reserve		31,999,682	30,861,084 -	1,138,598
Other reserves
Cash Flow Hedge Reserve	D	-	-
Re-measurement reserve of post employment benefits (IAS 19)	D	(81,081)	(105,586)	24,505
Conferment reserve	A, B	60,903,373	60,903,373	-
Merger reserve	A, B	264,495	264,495	-
Retained earnings	A,B,C	42,357,829	34,395,888	7,961,941
Exchange gains reserve		115,801	-	115,801
Reserve for share-based payments to employees (IFRS 2)		361,699	-	361,699
Stock grant reserve		192,291	-	192,291
Profit/(loss) for the period		126,280,329	7,959,435	118,320,894
Total		268,454,743	141,477,612	126,977,131

Key: A: for share capital increase, B: for coverage of losses - C: for distribution to shareholders - D: non utilisable

31. PROVISION FOR RISKS AND CHARGES

	December 31, 2025	December 31, 2024	Changes
Provision for contractual risks	45,569	45,569	-
Total Provision for risks and charges	45,569	45,569	-

The account includes the "Provision for contractual risks", which reflects the provisions set aside for commercial disputes whose risk of occurrence is considered at least probable.

32. LOANS

The table below shows the composition of medium/long-term loans:

	December 31, 2025 December 31, 2024		Changes
Loans:
- Intesa Loan - FCG	-	1,031,250	(1,031,250)
- BNL Loan	10,000,000	-	10,000,000
- Unicredit Loan	54,588,235	-	54,588,235
Total medium/long-term loans	64,588,235	1,031,250	63,556,985
- Other lenders	153,874	283,139	(129,265)
Total other financial payables	153,874	283,139	(129,265)
Total loans	64,742,109	1,314,389	63,427,721

The changes in the medium/long-term loans during the year are shown below:

(Euro thousands)	31/12/2024	New loans Repayment	s	31/12/2025	Shares current	Shares medium/long term
"Intesa Loan - FCG"	2,406	-	(1,375)	1,031	1,031	-
"BNL Loan"	-	10,000	-	10,000	-	10,000
"Unicredit Loan"	-	58,000	-	58,000	3,412	54,588
Balance	2,406	68,000	(1,375)	69,031	4,443	64,588

The "Intesa Loan - FCG" was disbursed in October 2020 for Euro 5.5 million, has a duration of six years, including a two-year grace period, and is repayable in quarterly instalments, starting from September 2022, at a contractual rate of 1.05% per quarter. The use is restricted to payments for the purchase of services and salary payments to BasicNet employees. The contractual conditions do not include financial covenants and the loan is directly guaranteed by the SME Guarantee Fund (90% of the capital).

Within the scope of the acquisition of the Woolrich® brand and the shares in Woolrich Europe S.p.A. (Note 5), the Group secured financial support from UniCredit in the form of: an unsecured loan totalling Euro 58.0 million, disbursed to BasicNet S.p.A., with a five-year term including a nine-month grace period, repayable in quarterly instalments in arrears, at a contractual rate of 3-month Euribor plus 100 basis points, with a margin ratchet mechanism and covenants binding on the Group with respect to the incurrence of new debt, the provision of new guarantees, the purchase of treasury shares and the distribution of dividends. A portion of the proceeds was used to repay Woolrich Europe's outstanding debt at the closing date;

"Payables to other lenders" relate to the accounting of the capital line of finance leases recorded in the accounts.

For completeness of information we provide details of the medium/long-term loans by maturity.

		December 31, 2025 December 31, 2024	Changes
Medium/long term loans: - due within 5 years - due beyond 5 years	64,588,235 -	1,031,250 -	63,556,985 -
Total medium/long term loans	64,588,235	1,031,250	63,556,985
Leasing payables	153,874	283,139	(129,265)
Total leasing payables (maturity within 5 years)	153,874	283,139	(129,265)
Total loans	64,742,109	1,314,389	63,427,721

33. PAYABLES FOR RIGHT-OF-USE

		December 31, 2025 December 31, 2024	Changes
Payables for rights-of-use	1,099,855	2,498,453	(1,398,598)
Total payables for right-of-use	1,099,855	2,498,453	(1,398,598)

Payables for right-of-use are recognised from 2025 in accordance with IFRS 16. During the year, payables for Euro 1.3 million were settled.

34. OTHER FINANCIAL PAYABLES

Other financial payables include the present value of the portion due beyond one year of the variable component ("earn-out") of the price to be paid for the acquisition of Sundek S.p.A. amounting to Euro 4 million.

35. EMPLOYEE AND DIRECTOR BENEFITS

The account includes the post-employment benefits for employees of Euro 864 thousand and the termination indemnities of Directors of Euro 333 thousand.

The changes in the year of the post-employment benefit liability were as follows:

	December 31, 2025			December 31, 2024
	Defined benefit plans	Defined contribution plans	Total	Defined benefit plans	Defined contribution plans	Total
Change in the balance sheet:
Net liabilities recognized at begin. of year	973,647	-	973,647	917,126	-	917,126
Interest	31,341	-	31,341	30,642	-	30,642
Pension cost, net of withholdings	-	200,100	200,100	-	442,592	442,592
Benefits paid	(94,684)	-	(94,684)	(35,396)	-	(35,396)
Payments to the INPS treasury fund	-	(119,129)	(119,129)	-	(281,482)	(281,482)
Payments to other supp. pension fund	-	(80,971)	(80,971)	-	(161,110)	(161,110)
- Actuarial gains/(losses)	(32,243)	-	(32,243)	52,315	-	52,315
Internal transfers to the Group	(14,456)	-	(14,456)	8,960	-	8,960
Net liabilities recognised in the accounts	863,605	-	863,605	973,647	-	973,647
Change in the income statement:
Interest	31,341	-	31,341	30,642	-	30,642
Pension Cost	-	200,100	200,100	-	442,592	442,592
Total charges/(income) for post employment benefits	31,341	200,100	231,440	30,642	442,592	473,234

The account "employee benefits" includes the present value of the liabilities of the company in accordance with Article 2120 of the Civil Code. Based on the regulatory changes in 2007, the sums matured prior to January 1, 2007 to employees are recognised as defined benefit plans in accordance with IAS 19 – Employee benefits; those matured subsequent to this date are on the other hand recognised as defined contribution plans in accordance with the same standard.

Within the Company there are no other plans other than defined benefit plans. The actuarial valuation of the Post-Employment Benefit is prepared based on the "matured benefits" method through the Projected Unit Credit Method in accordance with IAS 19. Under this method the valuation is based on the average present value of the pension obligations matured based on the employment service up to the time of the valuation, without projecting the remuneration of the employee in accordance with the regulatory modifications introduced by the Pension Reform.

The actuarial model for the measurement of the post-employment benefit is based on various assumptions of a demographic and financial nature. The principal assumptions of the model concerning the actuarial valuations relating to personnel costs are:

	December 31, 2025	December 31, 2024
discount rate	3.69%	3.41%
inflation rate	2.00%	2.00%
annual increase in post-employment benefit	3.00%	3.00%
annual increase in salaries	1.00%	1.00%

The change in the annual discount rate is consistent with the trend in the yields of the "corporate bonds" of the basket utilised (Iboxx Eurozone Corporate) at the reporting date.

36. BANK PAYABLES

		December 31, 2025 December 31, 2024	Changes
Bank payables due within one year: - short-term portion of medium/long-term loans	4,443,015	1,375,000	3,068,015
- bank overdrafts and bills	73,000,000	34,000,000	39,000,000
- interest expense on loans	1,590,925	528,328	1,062,597
Total bank payables	79,033,940	35,903,328	43,130,611

The average interest rates for BasicNet S.p.A. were:

	December 31, 2025	December 31, 2024
cash advances	2.43%	3.32%
medium-term loan	3.28%	3.13%

"Bank payables" include the short-term portion of loans, outlined at Note 32 and the relative interest matured and to be settled the following January.

Reference should be made to the Directors' Report for the changes in the net financial positions.

37. TRADE PAYABLES

	December 31, 2025	December 31, 2024	Changes
Trade payables - Italy	4,868,322	3,380,122	1,488,200
Trade payables - Foreign	496,369	382,774	113,595
Total trade payables	5,364,691	3,762,896	1,601,795

"Trade payables" are all due in the short-term period.

In particular, the breakdown of foreign suppliers is as follows:

	December 31, 2025	December 31, 2024	Changes
Europe	140,635	9,686	130,949
The Americas	26,180	21,818	4,362
Asia and Oceania	329,554	305,385	24,168
Middle East and Africa	-	45,885	(45,885)
Total	496,369	382,774	113,595

At the date of the present report there are no initiatives for the suspension of supplies, payment injunctions or executive actions by creditors against BasicNet S.p.A.. No interest is charged on trade payables which are normally settled between 30 and 120 days. The carrying value of trade payables approximates their fair value.

38. TAX PAYABLES

The breakdown of this account is shown in the following table:

	December 31, 2025	December 31, 2024	Changes
VAT	876,351	1,249,775	(373,424)
Withholding taxes	23,894	20,599	3,385
Employee contributions	231,611	318,785	(87,175)
Other tax payables	9,927	13,541	(3,615)
Total tax payables	1,141,872	1,602,700	(460,828)

The VAT payable is consequent of the transfers of balances by the companies within the Group VAT consolidation.

39. OTHER CURRENT LIABILITIES

	December 31, 2025	December 31, 2024	Changes
Payables to group companies	26,549,309	9,059,294	17,490,015
Other payables	1,861,345	1,754,127	107,218
Accrued expenses	303,958	296,242	7,715
Total other current liabilities	28,714,612	11,109,663	17,604,949

"Other payables" at December 31, 2025 principally include payables to social security institutions of Euro 497 thousand for the year 2025 and paid in 2026, employee, consultant and director payables of approx. Euro 1.3 million, which include vacation days matured at December 31, 2025 and other items of Euro 111 thousand and were fully repaid during the year. All payables are due within one year.

The "accrued expenses" refer to employee costs for the 14th month of the year.

The breakdown of "Payables to Group companies" are shown below:

	December 31, 2025	December 31, 2024	Changes
Trade payables:
Superga S.r.l. with sole shareholder	2,042,799	1,765,083	277,717
Kappa S.r.l. with sole shareholder	2,811,411	1,568,292	1,243,119
Basic Properties America INC	832,450	958,130	(125,680)
BasicItalia S.p.A. with sole shareholder	1,098,458	605,235	493,223
Sebago S.r.l. with sole shareholder	421,492	527,335	(105,843)
Basic Village S.p.A with sole shareholder	892,999	498,508	394,491
BasicNet Asia Ltd.	347,199	338,680	8,519
K-Way S.p.A. with sole shareholder	183,794	246,800	(63,006)
Superga Retail S.r.l. with sole shareholder	152,930	74,877	78,053
KappaRetail S.r.l. with sole shareholder	549,302	75,749	473,553
Tow S.p.A. with sole shareholder	42,376	23,559	18,817
BasicAir S.r.l. with sole shareholder	8,793	23,103	(14,310)
SebagoRetail S.r.l. with sole shareholder	30,984	16,966	14,017
Kappa France S.a.s.	-	1,746	(1,746)
K-WayRetail S.r.l. with sole shareholder	6,096	779	5,317
K-Way Iberia S.L.	958	615	343
BasicNet Asia Company Ltd	238,291	-	238,291
Basic Investments S.r.l. with sole shareholder	36	-	36
K-Way TopCo S.r.l.	31,018	-	31,018
K-Way Midco S.r.l. with sole shareholder	16,142	-	16,142
Trade payables	9,707,528	6,725,457	2,982,071
Financial payables
Kappa S.r.l. with sole shareholder	14,849,920	154,229	14,695,691
SupergaRetail S.r.l. with sole shareholder	735,267	886,213	(150,946)
BasicItalia S.r.l. with sole shareholder	15,346	822,599	(807,253)
BasicAir S.r.l. with sole shareholder	663,081	454,971	208,110
Tow S.p.A SebagoRetail S.r.l. with sole shareholder	200,000 360,937	- 15,825	200,000 345,111
K-WayRetail S.r.l. with sole shareholder	779	-	779
K-Way S.p.A. with sole shareholder	16,450	-	16,450
Total financial payables	16,841,781	2,333,837	14,507,944
Total	26,549,309	9,059,294	17,490,015

40. DEFERRED INCOME

	December 31, 2025 December 31, 2024		Changes
Deferrals on operating grants	28,077	49,916	(21,839)
Total deferred income	28,077	49,916	(21,839)

41. GUARANTEES GIVEN AND OTHER CONTINGENT ASSETS

The details of the guarantees given are as follows:

	December 31, 2025	December 31, 2024	Changes
- Guarantees to: subsidiaries	195,781,253	168,004,853	27,776,400
Total	195,781,253	168,004,853	27,776,400

- Sureties given on behalf of subsidiaries

The sureties provided, amounting to Euro 196 million, concern guarantees provided in favour of BasicItalia S.r.l., Kappa France, Kappa S.r.l. and of K-Way S.p.A., K-Way Retail, Sebago S.r.l. and Superga S.r.l., Kappa France, Woolrich and Tow to various credit institutions, to guarantee commercial credit lines.

42. CLASSIFICATION OF THE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The principal risks and uncertainties of the activities of the Company and of the Group and the activities undertaken to reduce them or avoid them, which are undertaken at Group level, are described in the Directors' Report.

The financial instruments of BasicNet S.p.A. include:

cash and cash equivalents and bank overdrafts;
medium/long-term loans;
derivative financial instruments;
trade payables and receivables.

It is recalled that the Company and the Group only subscribes to cash flow hedges, to hedge against interest and currency risks.

(Euro thousands)		Financial instruments at fair value recorded through:	Financial instruments at amortised cost	Non-listed investments valued at cost	Book value at 31.12.2025	Fair value As at 31.12.2025
	Income statement	Net Equity
Assets: Equity invest. & other financial assets	-	-	-	192,914	192,914	192,914
Cash and cash equivalents	-	-	2,835	-	2,835	2,835
Trade receivables Other current assets Derivative financial instruments	- - -	- - -	2,405 245,038 -	- - -	2,405 245,038 -	2,405 245,038 -
Liabilities: Medium/long-term loans Bank payables Trade payables Other current liabilities Derivative financial instruments	- - - - -	- - - - -	64,742 79,034 5,365 28,715 -	- - - - -	64,742 79,034 5,365 28,715 -	64,742 79,034 5,365 28,715 -

The financial risk factors, identified in IFRS 7 – Financial instruments: additional disclosures, are described below:

the risk that the fair value or the future cash flows of a financial instrument fluctuate following changes in market prices ("market risk"). The market risk includes the following risks: currency, interest rates and price:
a. the risk that the fair value or the future cash flows of a financial instrument fluctuate following changes in currency prices ("currency risk");
b. the risk that the fair value or the future cash flows of a financial instrument fluctuate following changes in market interest rates ("interest rate risk");
c. the risk that the fair value or the future cash flows of a financial instrument fluctuate following changes in market prices (other than changes determined from interest rate or currency risk), whether the changes are determined by specific factors related to the financial instrument or its issuer, or whether it is due to factors which influence all similar financial instruments traded on the market ("price risk");
the risk that one of the parties that signs a contract of a financial nature does not comply with an obligation ("credit risk");
the risk that an entity has difficulty in complying with the obligations associated with the financial liabilities ("liquidity risk");
the risk that the loans within the companies of the Group contain clauses which allow the counterparties to request the creditor on the occurrence of certain events or circumstances the immediate repayment of the sums granted and not yet due, generating a liquidity risk ("default risk").

Price risk

The Company is exposed to the risk of fluctuations of commodity prices relating to raw materials (wool, cotton, rubber, synthetic fibre etc.) incorporated in the sample collections acquired on international markets, for resale to the licensees.

The Company does not hedge these risks as not directly dealing with raw materials but only finished products and the fluctuations can be transferred on to the final sales price.

Currency risk

BasicNet S.p.A. has subscribed the majority of its financial instruments in Euro which corresponds to its functional and presentation currency. Operating on the international market the Company is also exposed to fluctuations in exchange rates, principally the US Dollar against the Euro.

In 2025, exchange losses were recorded of Euro 154 thousand, while unrealised exchange gains were recorded of Euro 1 thousand, for a net realised exchange loss of Euro 155 thousand (Note 16).

The Company undertakes hedging of the currency risks at Group level.

Interest rate risk

The composition of the gross financial debt between fixed and variable interest rates at December 31, 2025 is shown below:

	December 31, 2025	% December 31, 2024
Fixed rate	2,622,175	1.8%	2,934,578	7.9%
Variable rate	141,153,874	98.2%	34,283,139	92.1%
Gross debt	143,776,049	100.0%	37,217,717	100.0%

Credit risk

The doubtful debt provision (Note 25) which includes provisions against specific credit positions and a general provision on receivables not covered by guarantees, represents approx. 35% of trade receivables at December 31, 2025.

Liquidity risk

Reference should to the Explanatory Notes of the consolidated financial statements.

The table below illustrates the cash flow timing of payments on medium/long-term debt:

(Euro thousands)	Book value	Future interest income/ (expense)	Contractual cash flows	Within 1 year	Of which from 1 and 5 years	Beyond 5 years

BasicNet SME Fund Loan	1,031	5	1,037	1,037	-	-
BNL "Mini-Mortgage" (BasicNet)	10,000	508	10,508	288	10,219	-
Unicredit BasicNet (Woolrich) Line A Loan	58,000	5,404	63,404	5,212	58,192	-
Lease payables	154	12	166	137	29	-
Payables for rights-of-use	1,100	5	1,105	1,105	-	-
Total financial liabilities	70,285	5,935	76,220	7,779	68,441	-

Default and debt covenant risk

The risk that the loans within the company contain clauses (covenants) which allow the counterparties to request the creditor on the occurrence of certain events or circumstances the immediate repayment of the sums granted and not yet due, generating a liquidity risk. There are no covenants on the loans in place.

43. TRANSACTIONS WITH HOLDING COMPANIES, ASSOCIATES, OTHER INVESTMENTS AND RELATED PARTIES

The transactions undertaken by BasicNet S.p.A. with the companies belonging to the Group in the ordinary management and regulated at market conditions were:

Organisational, commercial, IT, and administrative services in accordance with specific contracts;
Financial support for the management of the centralised treasury, relations with credit institutions, granting of sureties;
the provision of Powered by services to K-Way S.p.A., Kappa S.r.l., Superga S.r.l. and Sebago S.r.l.;
Commercial assistance, principally relating to the sale of clothing samples, catalogues and payment of commissions;
Building rental for commercial use by Basic Village S.p.A.;
Purchase of products for gifts and promotional expenses;
Financial income and charges matured on loans within the treasury centralised management system, at market rates.

The income statement effects deriving from these transactions are summarised as follows:

REVENUES

BasicNet Group companies	Other income	Royalty income	Finance income	Dividends	Total
Kappa S.r.l. with sole shareholder	8,829,633	60,000	2,538	-	8,892,171
Kappa France S.a.s.	20,000	-	-	-	20,000
KappaRetail S.r.l. with sole shareholder	440,000	-	52,136	-	492,136
K-Way S.p.A. with sole shareholder	2,429,231	-	2,900	-	2,432,131
K-WayRetail S.r.l. with sole shareholder	357,936	-	22	-	357,957
K-Way Midco S.p.A. with sole shareholder	-	-	3,983,525	-	3,983,525
Sebago S.r.l. with sole shareholder	1,204,790	-	282,059	-	1,486,850
SebagoRetail S.r.l. with sole shareholder	80,000	-	-	-	80,000
Superga S.r.l. with sole shareholder	1,161,721	-	74,549	-	1,236,270
SupergaRetail S.r.l. with sole shareholder	100,000	-	-	-	100,000
BasicItalia S.r.l. with sole shareholder	200,000	-	29,068	-	229,068
Basic Village S.p.A with sole shareholder	40,000	-	528,326	-	568,326
BasicAir S.r.l. with sole shareholder	10,000	-	-	-	10,000
Sundek S.p.A. with sole shareholder	-	-	9,677	-	9,677
Tow S.p.A. with sole shareholder	6,000	-	97,071	-	103,071
Total revenues	14,879,311	60,000	5,061,870	-	20,001,181

COSTS

		Selling, general
BasicNet Group companies	Cost of sponsorship	and administrative costs, royalties expenses	Financial expenses	Amortisation & depreciation	Total
Kappa S.r.l. with sole shareholder	24,312	-	90,420	-	114,732
KappaRetail S.r.l. with sole shareholder	66,312	-	-	-	66,312
K-Way S.p.A. with sole shareholder	47,204	-	16,450	1,271,897	1,335,551
K-WayRetail S.r.l. with sole shareholder	18,316	-	779	-	19,095
K-Way Iberia S.L.	343	-	-	-	343
Sebago S.r.l. with sole shareholder	20,565	-	-	-	20,565
SebagoRetail S.r.l. with sole shareholder	11,846	-	--	-	11,846
Superga S.r.l. with sole shareholder	4,207	-	--	-	4,207
SupergaRetail S.r.l. with sole shareholder	392	-	-	-	392
BasicItalia S.r.l. with sole shareholder	-	-	15,346	-	15,346
Basic Village S.p.A with sole shareholder	-	622,734	-	-	622,734
BasicAir S.r.l. with sole shareholder	-	-	11,157	-	11,157
Tow S.p.A. with sole shareholder	-	12,000	-	-	12,000
BasicNet Asia Company Ltd.	-	345,538	-	-	345,538
Basic Net Asia Ltd.	-	1,063,886	-	-	1,063,886
Total Costs	193,498	2,044,158	134,153	1,271,897	3,643,706

A breakdown of the transactions with related parties with reference to the note to which they refer for the year 2025 is shown below:

	Equity investments (Note 23)	Receivables (Notes 21 & 27)	Payables (Notes 33 & 39)	Revenues (Note 43)	Costs (Note 43)
Subsidiaries	141,997,523	203,157,796	27,649,164	20,001,181	3,643,706
Interests in joint ventures:
Remuneration of Boards and Senior Executives and other related parties					10,519,217
Total	141,997,523	203,157,796	27,649,164	20,001,181	14,162,923

In relation to the other related parties, we highlight the legal consulting activities undertaken by Studio Legale Pavesio e Associati with Negri-Clementi and Studio Legale Cappetti Associazione Professionale, as part of a framework contract, of the Director Carlo Pavesio. These transactions, not material compared to the overall values, were at market conditions.

The collections owned by BasicNet S.p.A., which are utilised for media events, shows, press gatherings together with the Brands and/or products of the Group, are subject to a put and call agreement with Marco Boglione & Figli S.r.l.. The agreement shall run until June 30, 2026. The exercise price of the Call Option by Marco Boglione & Figli shall be equal to the cost incurred by BasicNet for the purchase of the Collection, as resulting from the accounting entries of BasicNet, in addition to a financial interest charge equal to the average rate applied to BasicNet at the exercise option date. The agreement was signed based on the eventual interest of BasicNet S.p.A. to sell the collection to guarantee the complete recovery of the costs incurred, including financial charges, utilising in the meantime the benefits which derive from such communication instruments for their brands and/or products.

44. CONSOB COMMUNICATION NO. DEM/6064293 OF JULY 28, 2006

Pursuant to Consob Communication DEM/6064293 of July 28, 2006, we report that there were no nonrecurring significant operations during the year.

45. CONTINGENT LIABILITIES/ASSETS

The BasicNet Group is involved in some legal disputes of a commercial nature which are not expected to give rise to significant liabilities.

Other disputes are described in the Explanatory Notes in the consolidated financial statements (Note 53).

PROPOSAL TO THE SHAREHOLDERS' AGM TO APPROVE THE FINANCIAL STATEMENTS FOR THE YEAR

Dear Shareholders,

We submit the following:

MOTION

RESOLVES

to approve the Financial Statements at December 31, 2025, in relation to each individual part and in its entirety.

PROPOSAL FOR THE ALLOCATION OF NET PROFIT FOR THE YEAR 2025 AND DIVIDEND DISTRIBUTION RESOLUTIONS THEREON.

Dear Shareholders,

We propose the allocation of the net profit of Euro 126,280,329.21 as follows:

	to each of the 47,748,000 ordinary shares in circulation (excluding the 6,252,000 treasury shares held at March 1, 2026), a dividend of Euro 0.16
	before withholding taxes for an amount of	Euro	7,639,680.00
	to unrealised exchange gains reserves, for a total of	Euro	1,465.91
	to retained earnings the residual amount, for a total of	Euro	118,639,183.30

The dividend will be paid from April 29, 2026, with record date of April 28, 2026 and coupon date (No. 19) of April 27, 2026

we propose therefore the following:

MOTION

the BasicNet S.p.A. Ordinary Shareholders' Meeting

RESOLVES

Turin, March 11, 2026

for the Board of Directors The Chairperson

Marco Daniele Boglione

ATTACHMENT 1

DISCLOSURE PURSUANT TO ARTICLE 149 DUODECIES OF THE CONSOB ISSUER'S REGULATION

Type of service	Service provider		Fees for 2025
Audit	EY S.p.A.	Parent BasicNet S.p.A.	59,000
Limited audit of the consolidated sustainability statement	EY S.p.A.	Parent BasicNet S.p.A.	54,000
Other services	EY Advisory S.p.A. EY Società tra Professionisti S.r.l.	Parent BasicNet S.p.A. Parent BasicNet S.p.A.	140,000 77,000
Total			330,000

ATTACHMENT 2 Page 1 of 4

LIST OF INVESTMENTS AT DECEMBER 31, 2025

(In Euro)

Name/Registered office/Share capital	Share capital	Amount of the net equity	Profit (losses) for the period	Quota held directly	Quota held indirectly	Pro quota net equity	Book value
SUBSIDIARY COMPANIES
BASIC AIR S.r.l. WITH SOLE SHAREHOLDER Largo Maurizio Vitale, 1 10152 TURIN Share capital Euro 3,000,000	3,000,000	2,223,520	20,197	100%	-	2,223,520	3,000,000
BASIC ITALIA S.r.l. WITH SOLE SHAREHOLDER Strada della Cebrosa, 106 10156 TURIN Share capital Euro 100,000	100,000	1,189,229	(2,938,981)	100%	-	1,189,229	2,173,431
BASICNET ASIA LTD. Unit 808B, 8/F, Tower B, Manulife Financial Centre, No. 223-231 Wai Yip Street, Kwun Tong. HONG KONG Share capital HKD 10,000.	1,093	442,846	11,072	100%	-	442,846	927
BASICNET ASIA COMPANY LIMITED (VIETNAM Ltd Room 1002-1003, 10th Floor, Diamond Plaza Building 34 Le Duan Street, Ben Nghe Ward, District 1 - Ho Chi Minh City VIETNAM Share capital DONG 462,600,000	14,803	76,365	5,313	100%	-	76,365	18,135
BASIC INVESTMENTS S.r.l. WITH SOLE SHAREHOLDER Largo Maurizio Vitale, 1 10152 TURIN Share capital Euro 10,000	10,000	729,887	(2,280,113)	100%	-	729,887	10,000
BASIC PROPERTIES AMERICA, INC. c/o National Registered Agents, Inc. 4701 Cox Road, Suite 285 – Glen Allen VA 23060-0000 – U.S.A. Share capital USD 2,000	1,702	2,517,186	3,063,445	100%	-	2,517,186	1
BASIC VILLAGE S.p.A. WITH SOLE SHAREHOLDER Largo Maurizio Vitale, 1 10152 TURIN Share capital Euro 412,800	412,800	8,249,038	119,991	100%	-	8,249,038	2,591,980
GLD BRANDS Ltd. Yard Road, Blairgowrie Scotland P10 6NW UNITED KINGDOM Share Capital GBP 4	5	(793,300)	(1,501,536)	-	100%	-	-
KAPPA S.r.l. WITH SOLE SHAREHOLDER Largo Maurizio Vitale, 1 10152 TURIN Share capital Euro 1,300,000	1,300,000	57,455,354	2,735,252	100%	-	57,455,354	8,138,394

ATTACHMENT 2 Page 2 of 4

Name/Registered office/Share capital	Share capital	Amount of the net equity	Profit (loss) for the year	Quota held directly	Quota held indirectly	Pro quota net equity	Book value
SUBSIDIARY COMPANIES
KAPPA FRANCE S.A.S. 41 Rue Bobby Sands 44800 St Herblain Cedex - FRANCE Share capital Euro 2,207,600	2,207,600	9,883,903	3,451,820	-	100%	-	-
KAPPARETAIL S.r.l. WITH SOLE SHAREHOLDER Strada della Cebrosa, 106 10156 TURIN Share capital Euro 10,000	10,000	2,407,520	(1,365,807)	-	100%	-	-
KAPPA SPORT IBERIA S.L. Vía de las Dos Castillas 9-A 28224 Pozuelo De Alarcón-Madrid SPAIN Share Capital Euro 1,705,592	1,705,592	2,348,254	(192,984)	-	100%	-	-
KICKOFF FRANCE S.L. 3 Rue du Commandant André 06400 Cannes - FRANCE Share capital Euro 1,000	1,000	(730,810)	(88,135)	-	100%	-	-
KICKOFF RETAIL S.L. Poeta Querol 1 – Puertas 1 y 2 Valencia 46002 - SPAIN Capitale Sociale € 3.000	3,000	(423,317)	(220,255)	-	100%	-	-
KICKOFF USA Inc. 4712 Admiralty Way #508 90292 Marina del Rey - California U.S.A. Share capital USD 1,000	1,000	(2,124,439)	(581,206)	-	100%	-	-
K-WAY S.p.A. WITH SOLE SHAREHOLDER Via dell'Aprica, 12 20158 MILAN Share capital Euro 10,050,000	10,050,000	66,425,008	2,936,055	-	60%	-	-
K-WAY FRANCE S.A.S. 2 Rue Gabriel Vicaire 75003 PARIS - FRANCE Share capital Euro 150,000	150,000	47,690,980	6,720,065	-	100%	-	-
K-WAY IBERIA S.L. Vía de las Dos Castillas 9-A 28224 Pozuelo De Alarcón-Madrid SPAIN Capitale Sociale € 3.000	3,000	(264,386)	(116,384)	-	100%	-	-
K-WAY MIDCO S.p.A. WITH SOLE SHAREHOLDER Via dell'Aprica, 12 20158 MILAN
Share Capital Euro 200,000	200,000	236,117,358	(68,978)	-	100%	-	-

ATTACHMENT 2 Page 3 of 4

Name/Registered office/Share capital	Share capital	Amount of the net equity	Profit (losses) for the period	Quota held directly	Quota held indirectly	Pro quota net equity	Book value
SUBSIDIARY COMPANIES
K-WAYRETAIL S.r.l. WITH SOLE SHAREHOLDER Strada della Cebrosa, 106 10156 TURIN Share capital Euro 10,000	10,000	9,085,676	2,734,438	-	100%	-	-
K-WAYRETAIL IRELAND LTD. WITH SOLE SHAREHOLDER 6th Floor, South Bank House, Barrow Street, Dublin 4 IRELAND
Share capital Euro 1,000	1,000	(750,060)	(434,918)	-	100%	-	-
K-WAYRETAIL SUISSE S.A. Via Franco Zorzi, 18 6850 MENDRISIO - SWITZERLAND Share capital CHF 100,000.	107,370	204,956	84,602	-	100%	-	-
K-WAY TOPCO S.r.l. WITH SOLE SHAREHOLDER Via dell'Aprica, 12 20158 MILAN Share Capital Euro 1,000,000	1,000,000	237,118,111	(98,224)	60%	-	142,270,867	66,827,038
SEBAGO S.r.l. WITH SOLE SHAREHOLDER Largo Maurizio Vitale, 1 10152 Turin Share capital 50,000	50,000	4,010,278	319,031	100%		4,010,278	1,434,797
SEBAGO FRANCE S.L. 2 Rue Gabriel Vicaire 75003 PARIS - FRANCE Share Capital Euro 197,080	197,080	3,854,646	-	-	- 100%	-	-
SEBAGO IBERIA S.L. Vía de las Dos Castillas 9-A 28224 Pozuelo De Alarcón-Madrid SPAIN Capitale Sociale € 3.000	3,000	(401,993)	(281,208)	-	100%	-	-
SEBAGORETAIL S.r.l. WITH SOLE SHAREHOLDER Strada della Cebrosa, 106 10156 Turin
Share capital Euro 10,000	10,000	499,898	187,299		100%	-	-
SPORT FASHION RETAIL S.a.r.l. 41 Rue Bobby Sands 44800 St Herblain Cedex - FRANCE Share capital Euro 5,000	5,000	(338,776)	73,220		100%	-	-
SUPERGA S.r.l. WITH SOLE SHAREHOLDER Largo Maurizio Vitale, 1 10152 Turin
Share capital 50,000	50,000	21,023,392	(1,760,655)	100%	-	21,023,392	2,681,444

ATTACHMENT 2 Page 4 of 4

Name/Registered office/Share capital	Share capital	Amount of the net equity	Profit (losses) for the period	Quota held directly	Quota held indirectly	Pro quota net equity	Book value
SUBSIDIARY COMPANIES
SUPERGARETAIL S.r.l. WITH SOLE SHAREHOLDER Strada della Cebrosa, 106 10156 Turin Share capital Euro 10,000	10,000	25,573	(360,171)	-	100%	-	-
- TOW S.p.A. (formerly JESUS JEANS S.r.l WITH SOLE SHAREHOLDER Largo Maurizio Vitale, 1 10152 TURIN Share capital 50,000	50,000	41,141,432	76,212	100.0%	-	41,141,432	41,121,375
WOOLRICH EUROPE S.p.A. WITH SOLE SHAREHOLDER Largo Maurizio Vitale, 1 10152 TURIN
Share Capital Euro 5,280,000	5,280,000	2,809,094	(2,470,906)	-	100%	-	-
WOOLRICH FOOTWEAR S.r.l. WITH SOLE SHAREHOLDER Via Umberto Intorbida, 13 -63814 Torre San Patrizio - FERMO Share capital Euro 100,000	100,000	209,784	6,138	-	51%	-	-
WOOLRICH FRANCE 1, Place Berthe Morisot - BAT B1 69800 Saint Priest - FRANCE Share Capital Euro 600,000	600,000	(2,328,230)	(192,133)		100%	-	-
WOOLRICH GERMANY GmbH Osterwaldstrasse 10 D-80805 Munich – GERMANY Share Capital Euro 25,000	25,000	(10,106,820)	(4,640,347)		100%	-	-
WOOLRICH NETHERLANDS Zuiddijk 412, Unit 1.04 1505HE Zaandam – THE NETHERLANDS Share capital Euro 10,000	10,000	(1,380,671)	(522,484)		100%	-	-

1) shares subject to a pledge with the Group required to maintain full ownership of the company, in guarantee of the loan issued by MPS Capital Services Banca per le Imprese S.p.A. in July 2017.

ATTACHMENT 2 Page 4 of 4

LIST OF INVESTMENTS AT DECEMBER 31, 2025

Name/Registered office/Share capital	31/12/2024 Book value	Acquisitions/I ncorporations /Conferments	Increases from IFRS 2	Impairments investments	Spin-offs / Disposals	31/12/2025 Book value	% held Parent
HOLDINGS IN
SUBSIDIARY COMPANIES
BasicAir S.r.l. with sole shareholder BasicItalia S.p.A with sole	3,000,000	-	-	-	-	3,000,000	100%
shareholder	2,122,099	-	51,332	-	-	2,173,431	100%
BasicNet Asia Ltd	927	-	-	-	-	927	100%
BasicNet Asia Company Limited	18,135	-	-	-	-	18,135	100%
Kappa S.r.l. with sole shareholder	8,063,145	-	75,249	-	-	8,138,394	100%
Basic Properties America Inc.	1	-	-	-	-	1	100%
Basic Village S.p.A. with sole shareholder	2,591,980	-	-	-	-	2,591,980	100%
Tow S.p.A. single shareholder company	81,375	-	-	-	41,040,000	41,121,375	100%
Sebago S.r.l. with sole shareholder	1,389,519	-	45,278	-	-	1,434,797	100%
K-Way S.p.A. with sole shareholder	117,678,035	-	-		- (117,678,035)	-	60%
Superga S.r.l. with sole shareholder	2,661,012	-	20,432	-	-	2,681,444	100%
K-Way TopCo S.r.l.	10,000	-	-	-	66,817,038	66,827,038	100%
Basic Investments S.r.l. with sole shareholder	-	3,010,000	-	(3,000,000)	-	10,000	100%
Sundek S.p.A. with sole shareholder	-	14,000,000	-	-	-	14,000,000	100%
TOTAL SUBSIDIARY COMPANIES	137,616,230	17,010,000	192,291	(3,000,000)	(9,820,997)	141,997,523
HOLDINGS IN JOINT VENTURES
Fashion S.r.l. with sole shareholder	195,720	-	-	-	(195,720)	-	0%
HOLDINGS IN OTHER COMPANIES
Consortiums & other minor	127	-	-	-	-	127
TOTAL OTHER COMPANIES	195,847	0	0	0	(195,720)	127
TOTAL SHAREHOLDINGS	137,812,076	17,010,000	192,291	(3,000,000)	(10,016,717)	141,997,650
FINANCIAL RECEIVABLES
Securities	-	50,100,000	-	-	-	50,100,000
Other receivables	510,280	305,755	-	-	-	816,035
TOTAL FINANCIAL RECEIVABLES	510,280	50,405,755	-	-	-	50,916,035
TOTAL INVESTMENTS AND OTHER FINANCIAL ASSETS	138,322,357	67,415,755	192,291	(3,000,000)	(10,016,717)	192,913,685

ATTACHMENT 3

DECLARATION OF THE FINANCIAL STATEMENTS PURSUANT TO ARTICLE 154-BIS PARAGRAPH 3 AND 4 OF LEGISLATIVE DECREE NO. 58 OF FEBRUARY 24, 1998, THE CONSOLIDATED LAW ON FINANCIAL INTERMEDIATION

The undersigned Marco Daniele Boglione as Executive Chairperson, Alessandro Boglione as Chief Executive Officer, Lorenzo Boglione as Chief Executive Officer, and Marco Enrico as Executive Officer for Financial Reporting of BasicNet S.p.A., affirm, and also in consideration of Article 154-bis, paragraphs 3 and 4, of Legislative Decree No. 58 of February 24, 1998:

the adequacy for company operations and the effective application, of the administrative and accounting procedures for the preparation of the 2025 financial statements.

In addition, we certify that the financial statements:

a) corresponds to the underlying accounting documents and records;
b) were prepared in accordance with International Financial Reporting Standards adopted by the European Union and also in accordance with Article 9 of Legislative Decree 38/2005 and provide a true and fair representation of the balance sheet, financial position and results of the Issuer;
c) the Directors' Report includes a reliable analysis on the performance and operating result as well as the situation of the Issuer, together with a description of the risks and uncertainties to which they are exposed.

Marco Daniele Boglione Chairperson

Alessandro Boglione Lorenzo Boglione Chief Executive Officer Chief Executive Officer

Marco Enrico Executive Officer for Financial Reporting

BasicNet S.p.A.

Financial statements as at December 31, 2025

Independent auditor's report pursuant to article 14 of Legislative Decree n. 39, dated 27 January 2010, and article 10 of EU Regulation n. 537/2014

EY S.p.A. Via Meravigli, 12 20123 Milano

Tel: +39 02 722121 Fax: +39 02 722122037 ey.com

Independent auditor's report pursuant to article 14 of Legislative Decree n. 39, dated 27 January 2010 and article 10 of EU Regulation n. 537/2014 (Translation from the original Italian text)

To the Shareholders of BasicNet S.p.A.

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of BasicNet S.p.A. (the Company), which comprise the statement of financial position as at December 31, 2025, and statement of income, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information.

In our opinion, the financial statements give a true and fair view of the financial position of the Company as at December 31, 2025, and of its financial performance and its cash flows for the year then ended in accordance with IFRS accounting standards issued by International Accounting Standards Board as adopted by the European Union and with the regulations issued for implementing art. 9 of Legislative Decree n. 38/2005.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISA Italia). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the regulations and standards on ethics and independence applicable to audits of financial statements under Italian Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Directors and Those Charged with Governance for the Financial Statements

The Directors are responsible for the preparation of the financial statements that give a true and fair view in accordance with IFRS accounting standards issued by International Accounting Standards Board as adopted by the European Union and with the regulations issued for implementing art. 9 of Legislative Decree n. 38/2005, and, within the terms provided by the law, for such internal control as they determine is 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, when preparing the financial statements, for the appropriateness of the going concern assumption, and for appropriate disclosure thereof. The Directors prepare the financial statements on a going concern basis unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

The statutory audit committee ("Collegio Sindacale") is responsible, within the terms provided by the law, for overseeing the Company's financial reporting process.

Auditor's Responsibilities 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 auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISA Italia) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

we have identified and assessed the risks of material misstatement of the financial statements, whether due to fraud or error, designed and performed audit procedures responsive to those risks, and obtained audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
we have 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 evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors;
we have concluded on the appropriateness of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to consider this matter in forming our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern;
we have 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 achieves fair presentation.

Additional information pursuant to article 10 of EU Regulation n. 537/14

The shareholders of BasicNet S.p.A., in the general meeting held on 27 April 2017, engaged us to perform the audits of the financial statements for each of the years ending December 31, 2017 to December 31, 2025.

We declare that we have not provided prohibited non-audit services, referred to article 5, par. 1, of EU Regulation n. 537/2014, and that we have remained independent of the Company in conducting the audit.

We confirm that the opinion on the financial statements included in this report is consistent with the content of the additional report to the audit committee (Collegio Sindacale) in their capacity as audit committee, prepared pursuant to article 11 of the EU Regulation n. 537/2014.

Report on compliance with other legal and regulatory requirements

Opinion on the compliance with Delegated Regulation (EU) 2019/815

The Directors of BasicNet S.p.A. are responsible for applying the provisions of the European Commission Delegated Regulations (EU) 2019/815 for the regulatory technical standards on the specification of a single electronic reporting format (ESEF – European Single Electronic Format) (the "Delegated Regulation") to the financial statements as of December 31, 2025, to be included in the annual financial report.

We have performed the procedures under the auditing standard SA Italia n. 700B, in order to express an opinion on the compliance of the financial statements as at December 31, 2025 with the provisions of the Delegated Regulation.

In our opinion, the financial statements as at December 31, 2025 have been prepared in the XHTML format and have been marked-up, in all material aspects, in compliance with the provisions of the Delegated Regulation.

Opinion and statement pursuant to article 14, paragraph 2, subparagraph e), e-bis) and e-ter) of Legislative Decree n. 39 dated 27 January 2010 and pursuant to article 123-bis, paragraph 4, of Legislative Decree n. 58, dated 24 February 1998

The Directors of BasicNet S.p.A. are responsible for the preparation of the Report on Operations and of the Report on Corporate Governance and Ownership Structure of BasicNet S.p.A. as at December 31, 2025, including their consistency with the related financial statements and their compliance with the applicable laws and regulations.

We have performed the procedures required under audit standard SA Italia n. 720B, in order to:

express an opinion on the consistency of the Report on Operations and of specific information included in the Report on Corporate Governance and Ownership Structure as provided for by article 123-bis, paragraph 4, of Legislative Decree n. 58, dated 24 February 1998, with the financial statements;
express an opinion of the compliance with the laws and regulations of the Report on Operations, excluding the section related to the consolidated sustainability information, and the above mentioned specific information included in the Report on Corporate Governance

and Ownership Structure pursuant article n. 123-bis, paragraph 4, of Legislative Decree n. 58, dated 24 February 1998;

issue a statement on any material misstatement in the Report on Operations and in certain specific information contained in the Report on Corporate Governance and Ownership Structure pursuant article n. 123-bis, paragraph 4, of Legislative Decree n. 58, dated 24 February 1998.

In our opinion, the Report on Operations and the specific information contained in the Report on Corporate Governance and Ownership Structure pursuant article n. 123-bis, paragraph 4, of Legislative Decree n. 58, dated 24 February 1998, are consistent with the financial statements of BasicNet S.p.A. as at December 31, 2025.

Milan, March 26, 2026

EY S.p.A. Signed by: Massimiliano Vercellotti, Auditor

AI assistant

Basic Net SpA — Annual Report 2026

4229_10-k_2026-03-26_49fa97ee-b6bc-445e-9b7f-fe2ec79ec434.pdf

CONSOLIDATED & SEPARATE FINANCIAL STATEMENTS AT DECEMBER 31, 2025

CONTENTS

CORPORATE BOARDS

BOARD OF DIRECTORS

BOARD OF STATUTORY AUDITORS

INDEPENDENT AUDIT FIRM

THE GROUP AND ITS ACTIVITIES

STRENGTHS

1. Brand positioning

2. The Business System

3. Web Integration

GROUP STRUCTURE

BUSINESS TARGETS

2025 SIGNIFICANT EVENTS

K-Way transaction

Luisa Via Roma

Acquisition of Woolrich

Acquisition of Sundek

Acquisition of Sebago France

Liquidation of Basic Properties America Inc.

REGIONAL COMMERCIAL PERFORMANCES

Group brand sales points

2025 FINANCIAL PERFORMANCE OVERVIEW

THE GROUP

BasicNet Group Key Financial Highlights

Commercial and financial analysis

Segment information

Balance sheet overview

Financial position

THE PARENT COMPANY

BasicNet S.p.A. Key Financial Highlights

Balance sheet overview

Financial position

RECONCILIATION BETWEEN CONSOLIDATED NET PROFIT AND PARENT COMPANY NET PROFIT

THE BASICNET SHARE PRICE

PRINCIPAL RISKS AND UNCERTAINTIES

Strategic risks

Risks associated with economic conditions

Macroeconomic risks

Licensee network operating risks

Risks related to BasicNet Group production

Currency risk

Credit risk

Liquidity risk

Interest rate risk

Environmental risks

Risks relating to legal and tax disputes

Tax disputes

Alleged tax inversion Basic Properties America

Commercial disputes

FISI pre-emption right

Dispute with Audi AG

OTHER INFORMATION

ESSENTIAL INTANGIBLE RESOURCES

HUMAN RESOURCES AND THE ENVIRONMENT

TREASURY SHARES

STOCK OPTION PLANS

OPT-OUT REGIMES

SHARES HELD BY DIRECTORS AND STATUTORY AUDITORS

TRANSACTIONS WITH HOLDING COMPANIES, ASSOCIATES, OTHER INVESTMENTS AND RELATED PARTIES

Governance of subsidiaries outside of the European Union

RESEARCH AND DEVELOPMENT

Creating garment models and designs

New software development

Brand exploitation and sponsorship

SUBSEQUENT EVENTS TO THE YEAR-END AND OUTLOOK

PROPOSAL TO THE SHAREHOLDERS' AGM TO APPROVE THE FINANCIAL STATEMENTS FOR THE YEAR

MOTION

RESOLVES

PROPOSAL FOR THE ALLOCATION OF NET PROFIT FOR THE YEAR 2025 AND DIVIDEND DISTRIBUTION RESOLUTIONS THEREON.

RESOLVES

The Chairperson

CORPORATE GOVERNANCE REPORT

Introduction

1. ISSUER PROFILE

Statutory provisions in relation to Takeovers

4. BOARD OF DIRECTORS

Basic Net SpA Annual Report 2026