Interim Condensed Consolidated Financial Statements as of 30 June 2023

1. Interim Directors' Report as of 30 June 2023
2. Interim Condensed Consolidated Financial Statement as of 30 June 2023
3. Interim Consolidated Financial Statements as of 30 June 2023
- a. Condensed Consolidated Statement of Financial Position
- b. Condensed Consolidated Statement of Profit or Loss and Comprehensive Income
- c. Condensed Consolidated Statement of Changes in Equity
- d. Condensed Consolidated Statement of Cash Flows
4. Notes to the Interim Condensed Consolidated Financial Statements

Interim Directors' Report

of the Condensed Consolidated Interim Financial

Statement as of 30 June 2023

Registered office and Headquarters

Piazza Diaz 6, Milan

Operational headquarters

The offices of the company are as follows: Registered office – Piazza Diaz 6, Milan Operational office – Via dei Volsci 163, Rome Operational office – Piazza della Meridiana 1, Genoa

Corporate Boards

Chairman and Chief Executive Officer
Executive Board Member
Independent Member
Independent Member
Member

Board of Statutory Auditors

Giorgio Mosci	Chairman
Lucia Tacchino	Standing Auditor
Marco Centore	Statutory Auditor
Chiara Cosatti	Alternate Auditor
Gianluca Fantini	Alternate Auditor

Internal Control, Risk and Related-Parties Committee

Francesco Gesualdi	Chairman
Sara Armella**

Appointment and Remuneration Committee Sara Armella** Chairwoman Francesco Gesualdi

Executive Officer for Financial Reporting Carlo Micchi

Independent Auditor Audirevi S.p.A.

*The Board of Directors and the Board of Statutory Auditors shall expire upon the approval of 2023 Financial Statements. The Shareholders' Meeting, on 21 July 2023, appointed Audirevi S.p.A. as its official Auditor for the 2023-2031 period.

**In charge until 8 July 2023.

1. Introduction

Giglio Group is engaged in the e-commerce of high-end fashion products, in the design products' sector and in the food segment. The Group's mission is to provide technological support to a growing number of prime brands (in all categories served) in their business transformation towards digital omni-channel strategies worldwide.

Founded on 2003, the Group offers tailor-made B2B and B2C services to various industries, mainly with "Made in Italy" brands, covering the whole supply chain, from the creation of e-commerce platforms to storage management on a global scale, up to brands' connection with major digital marketplaces. Indeed, Giglio Group is not only a B2C technology platform for the fashion world, but proposes a broad range of services connecting brands on various digital platforms with consumers across the globe, having also expanded its activities towards the food, design, electronics, DIY and physical well-being industries. Moreover, thanks to its "engagement & marketing automation" division, the Group can now offer evolved digital solutions that allow its customer base both to improve the performances of their own e-commerce website and to open up new B2B and B2C sales processes, or to new national and international markets, by gaining the loyalty of their clients, boosting and digitalising the direct sales force and incentivising and rewarding trades.

The innovative and commercial offer of Giglio Group follows and tries to anticipate the changes in the relationship between brands and consumers. New technologies enable the evolution of sales channels, while the products' life-cycle changes and evolves too, forcing brands to shape their offers around the client and its needs. New business opportunities thus open up in the market, and brands must monitor them, if not autonomously, with the support of competent operators. This is the inevitable evolution of the relationship between brands and their clients, which is not set in stone anymore. Moreover, in the fashion sector, this relationship is not only linked with the change of the collections season after season, but it is also continually moving according to the different digital touchpoints, which, by changing quickly and by offering a more and more sophisticated supply range, bring about a continuous interaction between brands and clients on a global scale.

THE BUSINESS MODEL AND ITS STRENGHTS

Giglio is conceived as a Digital Enabler for brands capable of offering them a presence in the digital and selective distribution worlds by interconnecting through its omni-channel technologies all of its sales channels, thus aiming to become a fully outsourcing Omni-channel Platform for fashion, design and food brands.

With the launch of design and food sales, Giglio Group boasts a unique, high-standing customer base and a complete and innovative range of business and digital services for its brands and their consumers, along with a proprietary omni-channel infrastructure called "Terashop" serving Italian and European excellence in their respective categories and connecting them to the new frontiers of digital sales and interconnected selective channels worldwide.

Giglio boasts its own directly integrated and integrable platform featuring the most popular ecommerce solutions adopted by brands worldwide, as well as major technological partnership that, together with the Company's know-how, make it a pivotal business and technological keypartner for brands' strategies.

Particularly in the Fashion sector, but not only, Giglio Group embraces the brands' different needs with regard to their presence in the digital space, offering services that can increase the value of their current distribution strategy:

• Physical Retail. According to the Group's philosophy, the physical retail must represent the physical lifestyle of the brand, in order to boost its popularity. Giglio Group's omni-channel technology can significantly improve the business and loyalty effectiveness of the physical retail through "click & collect" service, by recording loyalty on the sales point, by favouring products' return and exchange in the store, by providing in-store support for products available online via its "kiosk", reserved only for sales point, and via other "drive-to-store" technologies, as well as by digitally identifying the user in the store with marketing automation technologies.

• E-commerce. The first sales' pillar within the online world, and a consolidated strength for Giglio Group. Now part of all brands' DNA, the e-commerce offers a maximum catalogue range, an increasingly customised relationship with the clients, who can receive to-the-point information and offers thanks to the CRM technology amplified by the marketing automation software. It is the essential element in the Industrial Plans of major brands, which qualifies the economic

sustainability of the brand itself. Moreover, this channel helps accelerating the penetration in new areas, as well as keeping up the sales performance in the most mature markets, where physical sales are dropping significantly.

• E-Tailers (or Multi-Brand Stores) and Marketplace. E-tailers represent the main share of online sales worldwide, especially now that main physical department stores generate more than half of their revenues on their own online channels. The Marketplace channel amplifies the international online distribution of brands by increasing the customers' brand awareness and, in turn, the digital sales. Giglio Group's technological and business partnership can face the challenge to keep the brands' desired positioning and to correctly manage the in-season distribution, the specials sales and off-season goods within the high variety of digital supply now available on the market. More specifically, Giglio has accrued a significant experience in managing off-season hoods on main digital channels worldwide.

• International Distribution and Travel Retail. A paramount channel for brands' presence on an international level, but also for increasing their sales and expanding their popularity with international consumers. Giglio Group aims at increasing brands' sales via all of the international channels in which its proprietary omni-channel technology can allow for an interaction between the physical and digital retail, also during leisure travels.

Essentially, Giglio Group's mission is to lead brands through their sales transformation by activating the best combination of sales channels and economic model, accompanying its partner brands along the process in order to obtain a 100% sell-through rate for every season through the correct balancing of national and international physical channels with proprietary or third-party digital channels such as marketplaces.

In 2023, the Company operated with a full focus on the international distribution and e-commerce businesses. E-Commerce Outsourcing S.r.l. is an e-commerce company that invested predominantly in omni-channel technologies in Italy, and its platform allows to provide to brands and end customers a complete purchase experience by interconnecting physical and digital retail in all of the users' interaction touchpoints. By integrating Giglio Group's and E-Commerce Outsourcing S.r.l.'s technologies and know-how, it was possible to expand the Group's activity toward new sectors such as, specifically, GDS, Food and mass retailing, with a chance to apply different business models: online sales with home delivery, products' collection from retail outlets, digital kiosks for in-shop sales, CRM systems, as well as B2B and B2E websites.

Moreover, E-Commerce Outsourcing S.r.l.'s acquisition, which took place a few years back, strengthened the Group's technical organisation thanks to the introduction of highly-specialised ecommerce experts in its workforce.

Moreover, following the purchase of Salotto di Brera S.r.l., which took place on 12 January 2021, the Group has become a reference player in the international distribution in the selective and exclusive travel retail channel, in which Salotto di Brera has built strong business relations over the years with main cruise lines, touristic and diplomatic airports, duty-free chain stores, touristic ports and NATO bases.

Over the first months of 2022, the new Giglio Meta Business Unit was launched, dedicated to the development of Metaverse and NFT projects and capable of ensuring the creation of the entire development process of a project, from the specific business sector analysis to the launch of NFTs on the market, besides producing multimedia, three-dimensional contents capable of engaging the user in a virtual experience unique in each Metaverse.

THE REFERENCE MARKET

According to a survey made by Fondazione Altagamma in 2022, in collaboration with various analysts, and called "Altagamma Consensus 2023", 2022 was a record-breaking year for the luxury market, which exceeded pre-pandemic levels. Solid growth was initially forecast for the entirety of 2023, but its performance is being affected by factors such as the rising trend in energy costs, growing inflation, shortages of raw materials, ongoing geopolitical tensions and the decline in purchasing power by certain consumer groups. The recovery and increase of tourist flows on a global scale, together with the consumption's rebound, seem capable of counterbalancing however partially - the inflationary increase and the current uncertainty expected for 2023. Overall, a 5% (Europe and North America) and 9% (Asia) increase in the annual consumption in the

various markets is expected.

The distribution segment recorded higher increases in both the physical and digital retail, which will allow for the brands to strengthen their omni-channel strategy. Digital retail is expected to grow by 8% and physical retail by 7%. The digital wholesale will grow by 5.5%, while the physical one by 3.5%.

With regard to 2023, McKinsey & Company's report "The State of Fashion 2023" highlights a relatively slow growth in sales for the fashion market, ranging between 2-3% and characterised by a reduction in the European market (1-4% expected decrease) and a growth in China (2-7%) and in the United Stated of America (1-6%). These forecasts are affected by inflation.

Moreover, the new data regulation will open up a new chapter in the history of digital marketing, considering that the client targeting will become less efficient and more expensive. Brands are getting ready to embrace more creative campaigns and new channels such as retail media networks and the metaverse in order to obtain a greater return on marketing costs and to gather precious data that may be used to deepen clients' relations.

Group's Outlook on Luxury Goods Market

Giglio Group sees major market opportunities and seeks to deliver results by tapping immediately into increasing online channel usage, the growing importance of the Millennials and luxury consumer growth in China, in the Far East and in the other emerging markets. The Group's objective for 2023 is to link a global customer base directly with high-end, medium-sized fashion brands, that is, Italian excellencies that have yet to reach a global positioning and that, due to their size and the need to redesign their strategies, are showing the need to access new market segments by making use of an international business and technological partner such as Giglio Group.

Giglio Group envisages to continue strengthening its positioning in the reference market, i.e. as digital enabler of companies' business transformation through digital, logistic, marketing and international relationships' services for fashion brands, trying to attract an increased number of brands and aiming at increasing the volumes managed in all geographical areas and the number of marketplaces integrated in its platform. For 2023, the Company expects an increase in revenues caused by the annual growth of its current clients' portfolio, mainly due to the increased recovery of the market against 2023, to the increase in features that Terashop is constantly releasing to its clients in order to improve their revenues and to the duty-free market's recovery.

Furthermore, Giglio Group extended the supply of its services also to adjacent business areas, with specific focus on the design, retail chain stores and food industries, offering its omni-channel platform to the main players of each segment, so that it can be integrated with physical sales points and the main reference marketplaces of those sectors.

Giglio Group is intensifying its efforts to increase its productive capacity in order to create more and more projects for e-commerce platforms, also by integrating the experience of a travel retail consumer, so as to face the astounding increase in demand for these goods via online sales.

2. Group's Business and Structure

Founded in 2003 by Alessandro Giglio, Giglio Group is today an e-commerce 4.0 company capable of promoting and distributing luxury "Made in Italy" commercial brands across the globe. Listed initially on the Italian Stock Exchange AIM Italia market since August 2015, then on the STAR segment since March 2018 and later on the MTA-Standard segment of Borsa Italiana S.p.A. starting from May 2023, the Group operates in 5 continents and in over 70 countries when considering all the countries served by its e-commerce services.

The Group's objective is to create a fully-integrated model both as far as distribution channels and business models are concerned.

The Company is involved both in B2C and B2B operations. The integration between the two main business models, Principal (B2B) and Agent (B2C), allows the Group to manage in an optimal way brand's warehouse stock, both on-season and off-season, aiming at a 100% sell-through rate.

The B2C business model, managed by the subsidiaries Ibox SA and E-Commerce Outsourcing S.r.l. (the digital core of the group), consists in providing digital services for the management of monobrand websites for Fashion, Design and Food customers, as well as in offering integrated digital services aimed at improving the overall performances. Terashop is a unique technological platform capable of managing the mono-brand website, the omni-channel marketing requested by the sales points, the connection with the marketplaces, the integration with payment systems and logistics. Traded goods belong to the on-season collection of brands, which pay a fee on the sales and with which Giglio Group cooperates in their digital marketing strategy. No specific investment in working capital is needed, and there is no warehouse risk.

The B2B model, on the other hand, aims at facilitating brands' indirect online sales on behalf of major e-commerce platforms around the world, offering an additional distribution to physical networks.

51%

Cloud Food S.r.l. * Joint Venture with Acque Minerali d'Italia S.p.A.

On 15 January 2021, Giglio Group S.p.A. purchased the company Salotto di Brera S.r.l., engaged in B2B supplies for fashion, food and jewellery goods for cruise ships and duty-free stores in ports, airports and NATO bases.

Within the B2B model, Giglio Group directly manages logistics with the external warehouses, defines resale prices, manages the warehouse with a proved capacity to reduce stocks in a short time and with a high turnover of goods' index. Giglio Group collaborates with client e-commerce platforms on the basis of a defined sales plan which further diminished the risk of unsold items. The difference between the payment times to the brands, usually at the beginning of the season to reserve the stocks,

and the collection times from the marketplaces, normally 90 days after the end of the season, generates a financial requirement that is optimized by a careful use of instrument in support of the working capital.

The Group corporate structure is reported below:

*Company being divested

On 21 December 2022, the Board of Directors resolved to transfer its investments in Media 360 Hong Kong and Cloudfood S.r.l., which are neither active nor productive. On 14 February 2023, the transfer of the 51% stake in Cloud Food S.r.l. was completed.

3. Significant Events During the First Six Months of the Fiscal Year

On 14 February 2023, the transfer of the 51% stake in Cloud Food S.r.l., previously approved by the Board of Directors on 21 December 2022, was completed.
On 23 February 2023, the Parent Company subscribed the capital share increase of its subsidiary Salotto di Brera S.r.l. for a total amount of € 975,000, thus bringing its Share Capital to € 1 million. The share capital increase was aimed at strengthening the subsidiary's assets.
On 16 March 2023, the "Caput Mundi The Mall" shopping centre in the Vatican City was opened to the public, where the subsidiary Salotto di Brera S.r.l. signed an agreement for the lease of the business unit with Gasak S.r.l. at the end of 2022. The company is engaged in the retail sector for the first time.
On 30 March 2023, the Board of Directors approved the new Industrial Plan 2023-2027, which replaces the Industrial Plan 2022-2026 and its underlying assumptions. In this regard, the Company proceeded to acquire an independent analysis by an Advisor of international standing, in which no high-level critical issues were highlighted (on a lowmedium-high scale) in relation to the assumptions underlying the Industrial Plan such as to compromise the reliability or imply the unreasonableness of the aforementioned assumptions
On 4 April 2023, the Board of Directors approved the impairment test based on the results of the Industrial Plan, on which a leading consultancy firm has drawn up an in-depth report.
On 13 April 2023, the Board of Directors approved the Annual Financial Statements and the Consolidated Financial Statements as of 31 December 2022.
On 2 May 2023, the Auditing Firm BDO Italia S.p.A. released its report on the audit of the annual financial statements and the consolidated financial statements, in which it declared the impossibility of expressing an opinion. The Board of Directors acknowledged the conclusions reached by the Auditing Firm in the knowledge that it has acted correctly in the

interests of the Company and reserved further comments following a more in-depth examination of the Reports.

On 5 May 2023, CONSOB sent the request for dissemination of information pursuant to Art. 114, par. 5 of Legislative Decree no. 58/98 (CFA), which must be provided at the end of each month with reference to the previous month, starting from 31 May 2023.
On 11 May 2023, Meridiana Holding S.p.A. announced to the company that the shareholder loan of € 472,000 will be converted into future capital increases, recorded in the company's accounts on the same date.
On 12 May 2023, the Board of Directors resolved to request to Borsa Italiana, pursuant to Art. 2.5.7 of the Regulations of the markets organized and managed by Borsa Italiana S.p.A., the exclusion of the financial instruments of Giglio Group S.p.A. from STAR qualification and the consequent transition of the same from the MTA-Star segment to the MTA-Standard segment, as a consequence of the conclusions of the report issued by the auditing firm BDO Italia S.p.A. on the draft financial statements and the consolidated financial statements of the Company as of 31 December 2022.
On 16 May 2023, the Auditing Company BDO Italia S.p.A., with communication via certified e-mail, "irrevocably resigned" from the statutory auditing of accounts.
On 24 May 2023, the Ordinary Shareholders' Meeting took note of the consolidated financial statements of the group as of 31 December 2022 and approved the financial statements of Giglio Group S.p.A, resolving to carry forward the profit of € 118,670.56.
On 30 June 2023, the right of withdrawal from the Business Branch Rental Agreement relating to the "Caput Mund The Mall" shopping centre was exercised and the termination of the contract was declared to the counterparty Gasak S.r.l., due to organizational and management problems that occurred for the management of the entire Mall and not attributable to Giglio S.p.A..

4. Significant Events Following the First Six Months of the Fiscal Year

On 8 July 2023, the Company received the resignation, effective immediately, of the lawyer Sara Armella from the position of non-executive and independent director of the Company, due to new work commitments. Consequently, also the roles appointed to Armella in the Committees will be taken on by the new director in possession of the necessary requisites of experience and competence, who shall be appointed by cooptation.
On 21 July 2023, the Meeting appointed the company Audirevi S.p.A. to carry out the statutory audit of the accounts for the period 2023-2031.

5. Outlook

Over the last three years, the global context was characterised by a sequence of three extraordinary events: i) the pandemic emergency, ii) the Russian-Ukrainian conflict, with the consequent energy and food crisis and iii) the return of a rising inflation and the end of ultraexpansive monetary policies.

The risks of the global macroeconomic outlooks are still significant and prone to deteriorate. The evolution of the Russian-Ukrainian conflict continues to represent one of the negative factors that may accentuate the slowdown of the world's economic activity. Moreover, the inflation represents a watershed in the various alternative scenarios hypothesised, which range from the most negative one - which foresees a 0.7% global economic growth with a 6.1% inflation - to the most positive one - 2.2% growth in the world's GDP with a 4.6 inflation (source: Oxford Economics, World Economics Prospects Monthly, January 2023).

In addition to this, China's decision to eliminate the so-called "zero-Covid" policy in December 2022 brought about a slowdown in industrial production, logistics services and consumption in that same month. During 2023 Q1, however, a significant increase of the same was recorded. There is optimism for the recovery of consumption, which should benefit from the sharp increase

in the population's saving rate during the pandemic years, with positive impacts on domestic industries such as hospitality, tourism, textiles and clothing.

In this context, the e-commerce segment benefited from a cultural shift characterised by a constant growth in digital stores, facilitated by the slowdown of the physical retail.

Our B2C -E-Commerce Service Provider Division division is currently under pressure due to the numerous requests of technological updates made by our clients, aimed at increasing both sales and services to final consumers.

This situation calls for a constant investment in new developments for the platforms and for the constant maintenance of the same so as to support growth, also implying a constant analysis on the strategic nature of its positioning with partnering brands (clients), considering that the Group is becoming more and more a technical and process partner, but also an outsourcing service provider.

In addition to maintaining solid relationships with the historical customers of the Giglio Group, the strengthening of the marketing activity already begun at the end of 2022 continues, also through the recruitment of qualified personnel, which made it possible in the first three months of the year to obtain new significant contracts both from an economic point of view and for the quality of the contractors.

The expansion of the Travel Retail business of Salotto di Brera continued thanks to the organic growth given by the increase in tourism on cruise ships (Leisure Travel) and to the non-organic growth deriving from the growing number of ships reached following the conclusion of framework agreements with the Starboard and Harding groups. During the first half of the year, the number of ships served by Salotto di Brera doubled.

The development of the Travel Retail sector also continues in the airport sector. The first half of the year saw the openings of Vienna, Shenzhen and Kazan airports, and agreements are expected to be concluded with seven further airports by the end of the year.

The subscription of an agreement which involves all the business units of the Group for the creation of a complete service to one of the main companies operating in the transport sector at European level is highlighted; in detail:

Creation of e-commerce site;
Production and digital sale of all merchandising;
Creation, production and sale of co-branded products with big brands;
Agreements with important companies in other sectors for the sale on board of carriers of the products of the most important brands distributed by Salotto Brera.

In the B2B segment, it is believed that contracts with new distribution customers can be completed, in addition to the signing of new contracts with four leading fashion brands in the world.

The growth of the new business unit, launched in 2022 H2, relating to the production of merchandising for artists and large companies is expected; this business unit shall be engaged throughout 2023 in the production and online and on-tour distribution of the merchandising of the "Maneskin" rock band . Moreover, the company is engaged in advanced negotiations with other artists and companies of the same calibre.

6. Accounting Standards

These Interim Condensed Consolidated Financial Statements were prepared according to the same accounting standards used for the preparation of the Giglio Group Consolidated Annual Financial Statements as of 31 December 2022.

7. Financial Highlights as of 30 June 2023

Alternative performance indicators

The Group utilises some alternative performance indicators, which are not identified as accounting measures within IFRS, for management`s view on the performance of the Group. Therefore, the criteria applied by the Group may not be uniform with the criteria adopted by other groups and these values may not be comparable with that determined by such groups.

These alternative performance indicators exclusively concern historical data of the Group and determined in accordance with those established by the Alternative Performance Indicators Orientations issued by ESMA/2015/1415 and adopted by CONSOB with communication No. 92543 of December 3, 2015. These indicators refer to the performance for the accounting period of the present Interim Financial Report and of the comparative periods and not to the expected

performance of the Group and must not be considered as replacement of the indicators required by the accounting standards (IFRS).

The alternative performance indicators utilised in the Financial Report are as follows:

Operating/trade working capital: calculated as the sum of Inventories and Trade Receivables net of Trade Payables.

Net working capital: the operating working capital net of other receivables/payables, tax receivables/payables.

Net capital employed: calculated as the sum of non-current fixed assets and net working capital.

Total Financial Debt (also Net Financial Debt): determined according to the provisions set forth in Consob Communication no. 6064293 of 28 July 2006 and in conformity with the Reference Note no. 5/21 issued by Consob on 29 April 2021 with regard to the ESMA32-382-1138 Orientation of 4 March 2021, by subtracting from cash and cash equivalents and from other current financial assets short/medium/long-term financial payables, trade payables and other medium/long-term debts.

EBITDA Adjusted: is determined adding to EBITDA non-recurring charges as detailed in the Directors' Report.

EBITDA: is the Operating result before Amortisation/Depreciation and Write-downs of tangible and intangible fixed assets.

EBIT: EBIT is the operating result reported in the income statement illustrated in the Explanatory Notes.

Gross Margin: The difference between total revenues and operating costs, made up of raw materials, ancillaries and consumables, changes in inventories, service costs and rent, lease and similar costs, adjusted for non-recurring costs.

Non-recurring costs: represented by income items that: (i) result from events or transactions that are not repeated frequently in the ordinary course of the Group's activities, or that result from non-recurrent events or facts; (ii) result from events or transactions which are not representative of the normal course of business.

Consolidated Financial Statements Overview as of 30 June 2023

(Euro thousands)	30.06.2023	31.12.2022	Change
Intangible Assets	15,401	15,436	(36)
Property, Plant and Equipment	663	456	207
Financial Fixed Assets	261	247	14
Total Fixed Assets	16,325	16,139	186
Inventories	953	1,559	(605)
Trade receivables	12,053	10,134	1,918
Trade payables	(13,300)	(11,957)	(1,343)
Operating/Commercial Working Capital	(294)	(264)	(30)
Other current assets and liabilities	(4,658)	(3,328)	(1,330)
Net Working Capital	(4,952)	(3,592)	(1,360)
Provisions for risks and charges	(382)	(365)	(16)
Deferred tax assets and liabilities	941	875	66
Other non-current liabilities	-	-	-
Net Invested Capital	11,933	13,057	(1,124)
Total Net Invested Capital	11,933	13,057	(1,124)
Equity	3,746	4,317	(571)
Minority interest in equity	(39)	(43)	-
Cash and cash equivalents	3,068	1,794	1,274
Current financial receivables	2	2	-
Current IFRS 16 financial liabilities	(162)	(62)	(100)
Current financial liabilities	(7,408)	(8,088)	680
Non-current IFRS 16 financial liabilities	(293)	(200)	(93)
Non-current financial liabilities	(10,844)	(10,701)	(143)
Non-current trade and other payables	(2)	(76)	74
Net financial liabilities*	(15,640)	(17,331)	1,691
Total Sources	(11,933)	(13,057)	1,124

The main balance sheet figures of the Group as of 30 June 2023 are specified below:

The Net Invested Capital of the Group at 30 June 2023, equal to € 11.9 million, is principally comprised of Net Fixed Assets (€ 16.3 million), and of Net Working Capital (€ -5 million).

Intangible Assets, equal to € 15.4 million, are mainly ascribable to the goodwill for the acquisition of Giglio Fashion, of the IBOX Group, of E-Commerce Outsourcing S.r.l. an of Salotto di Brera (collectively worth € 13.4 million). The movement (net of the period's amortisations), highlights a € 36,000 decrease due to the amortisations for the period (€ 452,000) and to increases (€ 413,000), mainly relating to € 240,000 in the half-year and € 108,000 in previous financial years for ongoing fixed assets; these costs were incurred internally for the implementation and integration of the IT platforms on the subsidiary Salotto di Brera.

Property, Plant and Equipment (which also include the RoU on existing leasing contracts), equal to € 0.7 million (net of the period's amortisations), show a € 207,000 increase due to the period's

amortisations (€ 152,000), to increases for € 402,000 and to the effect of disposals for € 43,000. The increase in the period mainly refers to the capitalization of furniture and fittings for € 58,000 and to the capitalization for the adoption of the IFRS 16 accounting standard for € 344,000. Financial Fixed Assets, equal to € 0.3 million, are mainly ascribable to the guarantee deposits paid relating to rental contracts for the buildings at Milan and Rome.

	(Euro thousands)	30.06.2023	31.12.2022	Change
A	Cash and cash equivalents	3,068	1,794	1,274
B	Cash and cash equivalents		-	-
C	Other current financial assets	2	2	0
D	Cash & cash equivalents (A)+(B)+(C)	3,070	1,796	1,274
E	Current financial liabilities	(1,928)	(2,881)	953
	of which with Related Parties	-	(732)	732
F	Current part of the non-current financial liabilities	(5,641)	(5,268)	(373)
G	Current financial liabilities (E)+(F)	(7,569)	(8,149)	580
H	Net current financial liabilities (G) - (D)	(4,499)	(6,353)	1,854
I	Non-current financial liabilities	(8,501)	(7,896)	(606)
	of which with Related Parties		-	-
J	Debt instruments	(2,635)	(3,005)	370
K	Non-current trade and other payables	(2)	(76)	74
L	Non-current financial liabilities (I)+(J)+(K)	(11,139)	(10,977)	(162)
M	Total financial liabilities (H)+(L)	(15,639)	(17,331)	1,692

The following table shows the Company's net financial debt in detail:

The schedule of the net financial debt is represented in accordance to the Reference Note no. 5/21 issued by Consob on 29 April 2021 with regard to ESMA's Orientation related to the disclosures obligations that, starting from 5 May 2021, changed the references provided for in Communication no. DEM/6064293 of 28 July 2006 as far as the net financial position is concerned.

More specifically, the change in financial debt can also be ascribed to the following factors:

E. Current financial liabilities: this account includes advances on invoices for € 1.2 million, current account liabilities for € 0.5 million and current liabilities for lease contracts for € 0.1 million. The account increased due to greater use of advance lines and overdrafts.

F. Current portion of non-current financial debt: this account decreased due to the reimbursements of 2023 H1.

I. Non-current financial liabilities: shows a reduction mainly due to the restatement of the current portion of loans following the month's reimbursements.

J. Debt instruments: As of 30 June 2023, the non-current Financial Debt includes the long-term EBB S.r.l. bond.

K. Non-current trade and other payables: This account as of 31 December 2022 mainly included the instalment debt for the purchase of subsidiary Salotto di Brera S.r.l.. During the first half of 2023, the debt was extinguished following the payment of the last instalment.

As of 30 June 2023, the net financial debt records, amongst its long-term liabilities, also the financial debt related to the EBB S.r.l. bond.

Consolidated Financial Activity Overview as of 30 June 2023

(Euro thousands)	30.06.2023	30.06.2022	Change
Revenues from contracts with customers	15,708	19,635	(3,927)
Operating Costs	(12,877)	(16,738)	3,860
Gross Margin	2,831	2,898	(67)
Gross Margin %	18.0%	14.8%	3.3%
Payroll expenses	(1,677)	(2,068)	391
EBITDA	1,153	830	324
EBITDA%	7.3%	4.2%	3.1%
Non-recurring revenues (charges)	9	0	9
Amortisation, depreciation & write-downs	(604)	(595)	(8)
EBIT	558	234	324
Net financial charges	(669)	(500)	(169)
PROFIT BEFORE TAXES	(110)	(268)	158
Income taxes	80	15	65
PROFIT FOR THE PERIOD	(30)	(252)	222
RESULT ATTRIBUTABLE TO MINORITY INTERESTS	(4)	(1)	(3)
GROUP PROFIT/(LOSS)	(26)	(251)	225

EBIT adjusted to non-recurring costs	550	234	316
EBIT%	3.5%	1.2%	2.3%
PROFIT FOR THE PERIOD%	(0.2)%	(1.3)%	1.0%

The key consolidated economic highlights are shown below.

The consolidated revenues , equal to € 15.7 million, are dropping if compared to the consolidated figures of the same period for the previous fiscal year (€ 19.6 million consolidated figures as of 30 June 2022).

The EBITDA showed a positive trend, accounting for € 1,153,000 (€ 830,000 on consolidated figures as of 30 June 2022), ascribable to savings achieved with the supply and consulting contracts, as well as to the sales carried out with higher margins.

The Net Profit , equal to € 30,000, is improving significantly if compared to the previous year (€ - 252,000).

8. Segment disclosure

IFRS 8 accounting standard – "Operating Segments" requires the disclosure of detailed information for each segment, understood as being a component of an entity (i) who is capable of carrying out an activity that generates revenues and costs, (ii) whose operating results are periodically reviewed by top management for the purposes of adopting decisions concerning resource allocation and performance assessment, and (iii) for which separate budget information are available.

The Group identified three business areas (Business Units) after segmenting its activities with reference to the types of products, production processes and target markets:

1. B2B e-commerce
1. B2C e-commerce
1. Corporate.

The operating units within the above business units are as follows:

1. B2B e-commerce: Giglio Group S.p.A., Giglio USA, Salotto di Brera S.r.l. and Giglio Shanghai;
1. B2C e-commerce: IBOX SA, E-Commerce Outsourcing S.r.l., Giglio Shanghai and Meta Revolution;
1. Corporate: includes centralised Group functions which can not be assigned to the business units and mainly carried out by Giglio Group S.p.A.

The individual sector results (net of inter-company eliminations) are as follows:

30 June 2023
	B2B	B2C	B2B2C	Corporate	Total
(Euro thousands)	e-commerce	e-commerce	E-commerce
Revenues from contracts with
customers	9,288	5,701	11	0	15,000
Other incomes	12	239	0	167	417
Capitalised costs	0	291	0	0	291
Total revenues	9,300	6,231	11	167	15,708
EBITDA	636	2,221	(23)	(1,680)	1,153
EBIT	600	1,802	(32)	(1,812)	558
EBT	458	1,534	(31)	(2,071)	(110)
Profit for the period	473	1,595	(31)	(2,068)	(30)

30 June 2022
	B2B	B2C	B2B2C	Corporate	Total
(Euro thousands)	e-commerce	e-commerce	E-commerce
Revenues from contracts with			0
customers	12,881	6,649		0	19,530
Other incomes	(1,030)	(113)	0	1,148	5
Capitalised costs	0	100	0	0	100
Total revenues	11,851	6,636	0	1,148	19,635
EBITDA	245	1,052	0	(469)	828
EBIT	-229	621	0	(617)	233
EBT	248	536	0	(1,050)	(267)
Profit for the period	214	512	0	(978)	(252)

During the half-year, revenues from the B2B and B2C sectors recorded a decrease compared to the same period of the previous year. With reference to the revenue trend, some slowdowns that occurred during the first half of 2023 must be noted, for some customers located in Eastern countries and for a new important contract signed in May 2023, whose orders were postponed to the second half of 2023; the effect of these slowdowns, compared to the 2023 budget, resulted in lower revenues for a total of € 4.8 million.

9. Business seasonality

The Group's operations are affected by business seasonality, as reflected in the consolidated results. Specifically,in the e-commerce sector sales volumes are highly concentrated respectively in the first, third and fourth quarters at the winter and summer sales, during the Black Friday and the Christmas periods.

10. Human resources

Our activities require resources with high skill-sets: the workforce will require continual upskilling in order for our divisions to step up to the changed marketplace.

11. Number and value of treasury shares and of shares in parent companies held by the company

The Company does not hold treasury shares or shares of the parent company.

12. Investments

The Group's investments made in 2023 mainly relate to investments in capitalized development costs of Euro 240 thousand. These costs were incurred internally for the implementation and integration of the IT platforms on the subsidiary Salotto di Brera.

13. Number and nominal value of treasury shares and shares or quotas of holding companies purchased or sold by the company in the period

The Company did not purchase or sell during the year treasury shares or shares of the parent company.

14. Significant shareholders and shares of the Issuer

As of the date of the present interim financial report (30 June 2023), the official figures indicates the following significant shareholders:

55,66% of shares held by Meridiana Holding S.r.l. %

15. Disclosure pursuant to Article 2428 paragraph 3 No. 6-bis of the Civil Code

Over the course of 2019, the Parent Company Giglio Group S.p.A. issued a non-convertible bond of € 5 million in principal, made up of 50 bearer bonds with a denomination per unit of € 100,000.00 each.

The issue of the non-convertible Bond took place in the context of the operation"EBB Export Programme", aimed at the retrieval of financial resources by selected Companies for funding and supporting the internationalisation projects of their core businesses.

The main characteristics of the Bond are:

Aggregate principal amount: equal to € 5 million;
Subscribers: the Bond was fully subscribed by the SPV;
Listing: the Bonds are not listed on any regulated market nor on any MTF;
Terms of issue: the Bonds were issued in a single tranche;
Form: the Bonds are bearer bonds issued in book-entry form and centralised at Monte Titoli S.p.A.;
Issue price: the issue price amounts to 100% of the Bonds' nominal value;
Bonds' minimum value: the minimum value of each Bond amounts to € 100,000.00;
Custody and settlement: in case of subsequent negotiation, transfer can be subscribed only to qualified investors, as per Art. 100 of Legislative Decree no. 58/1998 and Art. 34 ter, par. 1, letter b), of CONSOB Regulation no. 11971/1999, as amended and integrated;
Interests: the Bond bears interest at the fixed nominal gross annual rate of 4.572%, to be paid with a semi-annual coupon postponed until the expiration of the Bond (or, if earlier, until the date in which Bonds shall be fully redeemed).
Legal duration and expiration: the Bonds shall have a legal duration of 8 years and 6 months and the expiration date is set at the last interests' payment date of 2027;
Reimbursement: without prejudice to anticipated reimbursement's hypotheses adoptable by the Company or to the occurrence of specific events provided for in the Bond's regulation, adoptable by Bondholders, the Bonds shall be redeemed at par, i.e. at 100% of their nominal value, pursuant to the amortisation plan set forth in the regulation, with 13 semi-annual capital instalments, with a grace period of 2 years;
Paying agent, Bonds paying agent and bank agent: the functions of paying agent are carried out by Securitisation Services S.p.A. whereas the functions of Bonds paying agent and bank agent are carried out by Banca Finanziaria Internazionale S.p.A.;
Tax regime: the Bonds are subject to the tax regime set forth in Legislative Decree no. 239 of 1 April 1996, as amended and integrated;
Applicable law: Bonds issue and contractual obligations deriving by the issue are governed solely by the law of the Italian Republic and any dispute arising is presented

exclusively to the Italian jurisdiction and adjudicated by the exclusive competence of the Court of Milan.

Furthermore, the following credit enhancements were envisaged:

(i) the issue by SACE S.p.A. of an autonomous, first-demand guarantee in favour of the SPV as guarantee of the compliance with the obligations of payment made against the Company's capital and interests deriving from the Bond issued by the same. In the event of non-compliance by the Company with the obligations of payment made against the Company's capital and interests deriving from the Bond, the SPV shall be able to address the non-collection by levying execution on SACE's Guarantee. SACE's Guarantee shall be intended as a public support measure aimed at the development of production activities covered by the counter-guarantee of the Italian State, within the framework of application of Legislative Decree no. 123 of 31 March 1998 ("Provisions for the optimisation of the public support to the enterprises, as per Art. 4, par. 4, letter c) of Law no. 59 of 15 March 1997");
(ii) the establishment by the Company of a debt service reserve (the "DSR") on cash collateral in favour of the SPV, amounting to the sum due in the form of interests at the first interests' payment date concerning the Bond: (a) for the purpose of allowing the SPV to promptly comply with its payment obligations with Investors, in the event that the Company fails to promptly comply with its payment obligations in the form of interests concerning the Bond and pending the enforcement of the related SACE's Guarantee; as well as (b) for the purpose of covering the so-called negative carry of the SPV in the event of payment of amounts in principal on the Bond in different dates than the one provided for by the related regulation.

The issue of SACE's Guarantee and the establishment of the cash collateral on the debt service reserve are not incorporated in the securities representing the Bond and, therefore, in case of negotiation, shall not be negotiated together with the securities.

In compliance with market standards, the regulation governing the Bond's terms and conditions includes, other than the aforementioned elements, also (i) some commitments and limitations borne by the Company, including, by way of example but not limited thereto, financial commitments (the so-called financial covenants), as well as disclosure and industrial commitments and (ii) bondholders safeguards in the case of events detrimental to their interests, which shall

activate the acceleration clause and thus oblige the Company to fully redeem the Bond in advance (the so-called events of major importance). The industrial commitments mentioned above include the obligation to finalise the internationalisation project, whose content is attached to the Regulation of the Bond. Before recent amendments, the financial covenants to be respected throughout the life of the Bond were two, and more specifically: a) a gearing ratio, and b) a leverage ratio, as defined by the Regulation of the Bond. In particular: (a) the leverage ratio could not be greater than: (i) 4.5 for 2019 and 2020 and (ii) 3.5 starting from 2021 and until the expiration of the Bond; and (b) the gearing ratio could not be greater than 2 for the whole duration of the Bond.

On 28 June 2023, SACE, as guarantor of the bond loan, gave consent to the bond holder EBB S.r.l. upon grant of the waiver under the following terms and conditions:

Consent relating to non-compliance with the financial parameters "leverage ratio" and "gearing ratio" (covenant holiday) is granted in relation to all the verification dates until full repayment of the bond loan. However, the commitments referred to in clause11.2 (disclosure commitments) of the regulation of the bond loan by Giglio Group S.p.a. remain in force;
Therefore, the surety commitment of Meridiana Holding pursuant to Article 10 ("Regulation of the Loan, Financial Parameters and Further Commitment of the Guarantor") is to be considered no longer in force. In any case, it is understood between the parties that all other obligations and duties assumed by Meridiana Holding Srl pursuant to the guarantee and indemnity agreement dated 10 March 2020 shall remain in force and fully exercisable.
In view of the above, it should be noted that with reference to the guarantee and indemnity agreement dated 10 March 2020, the guaranteed amount referred to in premise D is thus understood to be confirmed at € 1,500,000 together with the commitment to grant a pledge on the shares of Giglio Group S.p.a. for a total of € 4,152,000 in favour of SACE. The parties agreed that the pledge does not imply the possibility of exercising voting rights.
The effectiveness of the consent was expressed is suspended until the date of receipt of the acceptance of the letter of consent countersigned by Giglio Group S.p.a., sent on 29 June 2023.

16. Going Concern

The Interim Condensed Consolidated Financial Statements as of 30 June 2023 were closed with a loss of € 30,400 (of which € 4,000 attributable to minority interests), which led to a net equity of € -3,746,000 (of which € 43,000 attributable to minority interests). It is noted that the EBITDA as of 30 June 2023 amounts to € 1,153,000, against the figure of the previous year (€ 830,000).

The Group's net financial debt as of 30 June 2023 amounts to € 15,639,000 (€ 17,331,000 as of 31 December 2022) and there are significant amounts of overdue tax, social security and commercial debts. Therefore, at the date of presentation of these Interim Consolidated Financial Statements, the Group is in a situation of financial tension due to the excessive degree of short-term debt and the final trends which, although highlighting a slight improvement in margins in the half-year, continue to close with negative net results.

During 2023, the Board of Directors sought possible financial and industrial solutions to place the company in a situation of economic solidity capable of maintaining business continuity over time; in this sense, on 30 March 2023, the Directors approved the new Industrial Plan 2023-2027, basing the assessments on the linear increase in revenues, with the forecast of profitability (EBITDA to Revenues ratio) sustainable in the long term, the impact of which was estimated to be higher than 13% in the last year of the plan and on the capital increase of the minimum amount of € 2 million. Significant deviations between the Plan's expected figures and the final figures obtained as of 30 June 2023 are highlighted below:

	Plan	Final figures as of 30 June 2023
EBITDA	257	1,153
Revenues	20,517	15,708

With reference to the revenue trend, some slowdowns that occurred during the first half of 2023 must be noted, for some customers located in Eastern countries and for a new important contract signed in May 2023, whose orders were postponed to the second half of 2023; the effect of these slowdowns, compared to the 2023 budget, resulted in lower revenues for a total of € 4.8 million and an EBITDA increase of € 0.9 million influenced by the signing of a contract for multimedia and television content digitization services worth € 1.9 million.

The Directors, having taken note of the deviations from the provisions of the new Industrial Plan 2023-2027 approved on 30 March 2023, have taken steps to update as at 30 June 2023 the assessment of business continuity and the measurement of the financial requirement expected for the following 12 months compared to what is foreseen in the Industrial Plan.

Following the final figures as of 30 June 2023, the Directors highlight the activities implemented to allow the Group to operate as a going concern, namely:

The negotiation occurred with banking institutes in order to support the working capital required to foster the e-commerce business and its distribution of fashion goods, as demonstrated by the activation of several financing agreements both in 2022 and in the beginning of 2023. For this purpose, it is noted that, on 2023 Q1, the subsidiary Salotto di Brera S.r.l. subscribed two financing agreement of € 2.5 million and € 1 million respectively with Banca Progetto, upon the issue of the guarantee from SACE, thus confirming the reliability towards leading credit institutions. Furthermore, on 9 June 2023, a loan contract with Simest guarantee was stipulated for the subsidiary E-Commerce Outsourcing amounting to a total of € 520 thousand, of which € 130 thousand was non-repayable. The first tranche of the loan for € 260,000 was collected on 13 July 2023. The Industrial Plan 2023/2027 takes into account the increased interest rates on payables to credit institutions compared to the contractual rates recorded in the year ended 31 December 2022;
The agreement reached with the shareholder Meridiana Holding S.p.A.. of 11 May 2023, through which the residual debt relating to the loans disbursed for € 472,000 were converted into account for future capital increases;
On 28 June 2023, SACE, as guarantor of the bond loan, gave consent to the bond holder EBB S.r.l. upon grant of the waiver under the following terms and conditions:
Consent relating to non-compliance with the financial parameters "leverage ratio" and "gearing ratio" (covenant holiday) is granted in relation to all the verification dates until full repayment of the bond loan. However, the commitments referred to in clause11.2 (disclosure commitments) of the regulation of the bond loan by Giglio Group S.p.a. remain in force;

Therefore the surety commitment of Meridiana Holding pursuant to Article 10 ("Regulation of the Loan, Financial Parameters and Further Commitment of the Guarantor") is to be considered no longer in force. In any case, it is understood between the parties that all other obligations and duties assumed by Meridiana Holding Srl pursuant to the guarantee and indemnity agreement dated 10 March 2020 shall remain in force and fully exercisable.
In view of the above, it should be noted that with reference to the guarantee and indemnity agreement dated 10 March 2020, the guaranteed amount referred to in premise D is thus understood to be confirmed at € 1,500,000 together with the commitment to grant a pledge on the shares of Giglio Group S.p.a. for a total of € 4,152,000 in favour of SACE. The parties agree as of now that the pledge does not imply the possibility of exercising voting rights.
The effectiveness of the consent expressed was ratified following receipt of the acceptance of the letter of consent countersigned by Giglio Group S.p.a., sent on 29 June 2023.
The commitment of the parent company Meridiana to guarantee the capital increase in the minimum amount of € 3 million and, therefore, in an amount exceeding € 1 million than that defined for the purposes of the Industrial Plan 2023-2027; reference is made to what was reported in the minutes of the Board of Director' Meeting of 15 December 2021, whose agenda reported that "A delegation for increases in kind is currently still open, exercisable for five years from the date of the resolution which allows the administrative body to increase the company's share capital for a maximum amount of € 366,133.70 (10% of the then existing capital) in addition to the premium. To this, a proxy for simplified increases up to 10% of the existing capital as of today shall be available, pursuant to Art. 2441, par. 4, second sentence, that is, also a wider proxy with ordinary procedure." Moreover, it is noted that, with regard to the capital increase of the Parent Company Giglio Group S.p.A., the Board of Directors held on 14 September 2022 vested the Chairman with the power to carry out all preparatory activities needed to execute said capital increase. The share capital increase can be carried out in the last quarter of 2023, as foreseen in the 2023-2027 budget/plan approved by the directors. As of 12 September 2023, some expressions of interest had been received for a total of € 4.9 million, of which two, of a binding nature, were received from related parties for € 1.4 million. Such expressions of interest received from third parties are subject to the successful completion of accounting and management due diligence, as well as verification of the conditions, timing and issue price of the new shares. As already indicated, the parent company Meridiana has confirmed its commitment to guaranteeing

the capital increase to the minimum extent of € 3 million, taking into account that the expressions of interest received from third parties may not materialize or may materialize to a lesser extent than the quota of € 3 million.

The commitment of the shareholder Meridiana Holding S.p.A. to guarantee the necessary liquidity to support the Industrial Plan 2023/2027, with particular reference to the fulfilment of the commitments foreseen for the 2024 financial year.

In light of the considerations reported above, the elements of uncertainty and risk that remain are linked to:

The full realization of the objectives of the Industrial Plan, which provides for the mediumterm economic/financial rebalancing of the Group and its ability to generate cash flows necessary to guarantee the continuity of the Group, but which are dependent on hypothetical future actions and in any case potentially influenced from exogenous variables, among which the trend of expected revenue volumes must be kept in mind, expressed as commercial growth of 10% of the revenues of the B2B division and organic and commercial growth of 9% on revenues and 6% on the GMV of the B2C division;
The presence of high short-term debt and performance below expectations of the companies within the consolidation scope;
The completion of the capital increase that the shareholder Meridiana has undertaken to guarantee for the minimum amount of € 3 million, but which, as indicated below, could be carried out in a higher amount, up to € 4.9 million, if the subjects who expressed interest should participate.
The effective support from the shareholder Meridiana Holding S.p.A., which has undertaken to guarantee the necessary liquidity with particular reference to the fulfilment of the commitments foreseen for the 2024 financial year.

In light of the above, the Board believes that the possibility for the Company and the Group to continue its operations for the foreseeable future is necessarily linked, in addition to the maintenance of existing credit lines, to the timely procurement of the financial resources previously described necessary to cover the financial needs in the short term, as well as the achievement of the operational and financial targets envisaged in the Industrial Plan.

Despite the presence of uncertainties linked to the current financial situation, the amount of overdue debts and the actual feasibility of the forecasts of the Industrial Plan, the Directors of the Company considered it reasonable to adopt the assumption of business continuity in preparation of the Interim Consolidated Financial Statements as of 30 June 2023.

For this reason, therefore, the Directors continue to adopt the assumption of business continuity in the preparation of the financial statements, believing that they have in any case provided exhaustive information on the existing uncertainties and the consequent doubts that insist on the maintenance of this assumption.

Lastly, and as a further note of caution, the Directors, aware of the inherent limits of their assessment, will keep a constant monitoring of the evolution of the factors taken into consideration, so as to adopt, should the need arise, the necessary provisions and to provide for, with analogous promptness, the fulfilling of the disclosure obligations to the market. In particular, the Board of Directors monitors and will continue to monitor the economic, equity and financial situation in order to also evaluate alternative capital strengthening solutions such as to guarantee the existence of the assumption of business continuity.

17. Information and Management of Principal Risks and Uncertainties

In this section of the report, we wish to report upon the risks - considered as those events which may impact the achievement of corporate objectives, and therefore upon value creation.

Risks are broken down between financial and non-financial and therefore according to the source of the risk. The risks may be broken down into two macro-categories: internal and external risks, according to whether stemming from internal group operating processes or from external developments.

Non-financial risks

Among the internal risks we highlight:

Efficiency/efficacy of the processes: the organisational processes are currently being completed, especially with reference to the monitoring and implementation of the internal company procedures.

Delegation: within the growth of our company, it would be beneficial to assign a wider distribution of duties and responsibilities within the organisation in order to favour IT processes and internal efficiencies.

Human resources: our activities require resources with high skill-sets: the workforce will require continual upskilling in order for our divisions to step up to the changed marketplace. Processes: during 2023, both the 231 model with specific reference to the whistleblowing legislation and the following procedures will be updated:

Corporate governance procedures (i.e. procedures with related parties, internal dealing, market abuse, etc.);
Administrative and accounting procedures envisaged by Law no. 262/05 (i.e. treasury, collections, purchasing management, consolidated financial statements, taxes, etc.);
Internal control procedures related to Legislative Decree no. 231/01 (i.e. relations with the PA, information flows to the governance bodies, management of the passive and active cycle, etc.).

The company currently has an ongoing project to transfer its accounting to a common ERP (Navision); at present, the project has been completed for Giglio Group S.p.A., Salotto di Brera Srl, Metarevolution Srl, while for the subsidiary E-commerce Outsourcing Srl, completion is expected by the end of the financial year. This will allow for the implementation of a specific management control software, which is currently being identified. The implementation of these activities will make it possible for the group to prepare specific management reports which include the drafting and possible updating of the industrial plan and periodic reports for the company's top management and committees.

Among the external sources we highlight:

Market: the normal risks related to our activities, highly correlated to trends in market demand.

Regulations: the company's organisation permits the prompt compliance with stringent regulations especially in the Italian and foreign e-commerce sector which represents a significant level of complication.

Catastrophic Events: the previous years have been characterised by the COVID-19 pandemic, which had a significant impact on the company.

IT risks: the widespread and growing use of digital identity-SPID, of ature and of certified electronic email addresses may increase the risk of digital identity theft as well as the fraudulent use of these identities. Any undue and/or elicit utilisation of such information could result in, among other matters, a violation, attributable to the Issuer and/or to the Group, of the data protection regulation, with possible negative effects on the activities and on the prospects of the Issuer and/or of the Group, as well as on the equity and financial situation of the Issuer and/or of the Group. During the years 2013-2022 and in the current year, there were no information system attacks nor, to the knowledge of the company, any occurrences of embezzlement of data and/or sensitive information. Where the Group is unable to adopt technological controls in order to meet these possible risks they may be liable for economic and financial damages incurred by third parties with negative effects on the economic, financial and equity situation of the Group.

Financial risks

For financing and investing operations the company adopted prudent and risk limitation criteria and no operations were taken of a speculative nature.

In order to monitor financial risks through an integrated reporting system and ensure analytical planning of future activities, the company is currently implementing a management control system. In addition, the company did not utilise derivative financial instruments to hedge against risks regarding its funding requirements.

Currency risk

The Company prepares its financial data in Euro and, in relation to its business model, incurs the majority of its costs in Euro. The business model adopted permits the company to reduce to the minimum the risks related to changes in exchange rates.

Credit risk

Credit risk is the risk that a counterparty does not fulfil its obligations relating to a financial instrument or a commercial contract, resulting therefore in a financial loss. The Group is exposed to credit risks deriving from operations (particularly with regards to trade receivables and credit notes) and financing activities, including deposits at banks and financial institutions.

Payment terms for key clients that dictate terms and conditions make it necessary for the Group to primarily finance working capital through bank debt, especially for self-liquidating lines. The need to finance working capital entails different types of charges for the Group, which is mainly interest payable on loans.

Liquidity risk

Liquidity risk is the risk that financial resources may be insufficient to meet obligations on maturity. The company manages liquidity risk by maintaining a constant balance between funding sources, deriving from operating activities, from recourse to credit institution financing, and resources employed. Cash flow, funding requirements and liquidity are constantly monitored, with the objective of ensuring efficient management of financial resources. In order to meet its obligations, in the event cash flows generated from ordinary activities are insufficient, or in the case of timing differences, the company has the possibility to undertake operations to source financial resources, through, for example, bank advances on receivables and bank lending.

Milan, 12 September 2023 Board of Directors

The Chairman Alessandro Giglio

GIGLIO GROUP S.p.A. Registered office in Milan, Piazza Diaz, 6

Share capital: € 4,393,604

Economic & Admin. Register no. 1028989 Tax no. 07396371002

Registered at Milan Companies Registration Office with no. 07396371002

Interim Condensed Consolidated Financial Statement as of 30 June 2023

FINANCIAL STATEMENTS

Condensed Consolidated Statement of Financial Position
Condensed Consolidated Statement of Profit or Loss and Comprehensive Income
Condensed Consolidated Statement of Changes in Equity
Condensed Consolidated Statement of Cash Flows
Notes to the Interim Condensed Consolidated Financial Statements

Condensed Consolidated Statement of Financial Position

Condensed Consolidated Statement of Financial Position (Euro		30.06.2023	31.12.2022	Change
thousands)
Non-current assets
Property, plant & equipment	(1)	216	205	11
Right-of-use assets	(2)	447	251	196
Intangible assets	(3)	2,048	2,083	(36)
Goodwill	(4)	13,353	13,353	-
Investments in joint ventures	(5)	-	5	(5)
Receivables	(6)	261	242	20
Deferred tax assets	(7)	1,050	1,016	34
Total non-current assets		17,375	17,155	220

Current assets
Inventories	(8)	953	1,559	(605)
Trade receivables	(9)	12,053	10,134	1,918
Financial receivables	(10)	2	2	-
Tax receivables and deferred tax assets	(11)	2,319	2,107	212
Other assets	(12)	1,695	1,635	60
Cash and cash equivalents	(13)	3,068	1,794	1,274
Total current assets		20,066	17,232	2,859
Total Assets		37,441	34,387	3,054

Equity	(14)
Issued capital		4,394	4,394	-
Reserves		22,659	22,190	469
FTA Reserve		4	4	-
Retained earnings		(30,788)	(28,833)	(1,955)
Foreign Currency Translation reserves		12	7	5
Net profit/(loss)		(26)	(2,078)	2,052
Total Group Equity		(3,746)	(4,317)	571
Minority interest in equity		39	43	(4)
Total Net Equity		(3,707)	(4,274)	567

Non-current liabilities
Provisions for risks and charges	(15)	-	-	-
Post-employment benefit funds	(16)	382	365	16
Deferred tax liabilities	(17)	109	141	(32)
Financial payables (non-current portion)	(18)	11,137	10,901	236
Other non-current liabilities	(19)	2	76	(74)
Total non-current liabilities		11,630	11,484	146

Current liabilities
Trade payables	(20)	13,300	11,957	1,343
Financial payables (current portion)	(18)	7,570	8,150	(579)
Tax payables	(21)	7,737	5,420	2,318
Other liabilities	(19)	936	1,651	(715)
Total current liabilities		29,543	27,177	2,366
Total liabilities and Equity		37,466	34,387	3,080

Condensed Consolidated Statement of Profit or Loss

Condensed Consolidated Statement of Profit or Loss (Euro thousands)		30.06.2023	30.06.2022
Total revenues from contracts with customers	(22)	15,000	19,530
Other revenues	(22)	417	5
Capitalised costs	(23)	291	100
Change in inventories		(651)	(761)
Purchase of raw materials, ancillary, consumables and goods	(24)	(6,856)	(10,285)
Service costs	(25)	(5,106)	(5,437)
Rent, lease and similar costs	(26)	(91)	(128)
Operating costs		(12,053)	(15,850)
Salaries and wages	(27)	(1,230)	(1,535)
Social security charges	(27)	(375)	(422)
Post-employment benefits	(27)	(72)	(112)
Payroll expenses		(1,677)	(2,069)
Amortisation	(28)	(452)	(422)
Depreciation	(28)	(152)	(181)
Write-downs	(28)	(1)	9
Amortisation, depreciation & write-downs		(604)	(594)
Other operating costs	(29)	(166)	(127)
Operating profit		558	233
Financial income	(30)	14	70
Net financial charges	(30)	(682)	(570)
Profit before taxes		(110)	(267)
Income taxes	(31)	80	15
Profit for the period		(30)	(252)
Of which minority interest		(4)	4
Basic and diluted profit from continuing operations		(0.0014)	(0.0115)
Profit per share – basic and diluted		(0.0014)	(0.0087)

Condensed Consolidated Statement of Comprehensive Income

Condensed Consolidated Statement of Comprehensive Income (Euro thousands)		30.06.2023	30.06.2022
Profit for the period		(30)	(252)
Other comprehensive income
Other comprehensive income that will be reclassified to profit/(loss) in
subsequent periods (net of tax)
Exchange differences on translation of foreign operations		5	19
Total other comprehensive income that may be reclassified to profit/(loss) in
subsequent periods (net of tax)		5	19
Other comprehensive income that will not be reclassified to profit/(loss) in
subsequent periods (net of tax)
Actuarial loss on employee benefits obligations	(16)	5	43
Total other comprehensive income that will not be reclassified to profit/(loss)
in subsequent periods (net of tax)		(5)	43
Total Comprehensive Income for the period		(30)	(190)

Description (Euro thousands)	Issued capital	Reserves	FTA Reserve	Foreign Currency Translation reserves	Retained earnings	Net profit/(loss)	Group's Total	Third Parties	Consolidated Total
31 December 2021 Balance	4,394	22,105	5	(10)	(24,167)	(4,623)	(2,296)		(2,296)
Issue of share capital Share premium reserve Shareholders contributions to the corporate funds (or assets) Retained earnings					(4,623)	4,623			- - - -
IAS 19 Reserve Exchange rate		93					93		93
effect				17			17		17
Other changes		(7)	(1)		(43)		(51)	59	8
Group profit/(loss)						(2,078)	(2,078)	(16)	(2,094)
31 December 2022 Balance	4,394	22,190	4	7	(28,833)	(2,078)	(4,317)	43	(4,274)

Condensed Consolidated Statement of Changes in Equity

Description (Euro thousands)	Issued capital	Reserves	FTA Reserve	Foreign Currency Translation reserves	Retained earnings	Net profit/(loss)	Group's Total	Third Parties	Consolidated Total
31 December 2022 Balance	4,394	22,190	4	7	(28,833)	(2,078)	(4,317)	43	(4,274)
Issue of share capital Share premium reserve Shareholders contributions to the corporate		474					474		- - 474
funds (or assets) Retained earnings IAS 19 Reserve		(5)			(2,078)	2,078	(5)		- (5)
Exchange rate effect				5			5		5
Other changes					123		123		123
Profit for the period						(26)	(26)	(4)	(30)
30 June 2023 Balance	4,394	22,659	4	12	(30,788)	(26)	(3,746)	39	(3,707)

Condensed Consolidated Statement of Cash Flows

Euro thousands		30.06.2023	30.06.2022
Cash flows from operating activities
Net profit from continuing operations		(30)	(252)
Net profit from discontinued operations		-	-
Adjustments to reconcile profit before tax to net cash flow:
Depreciation and impairment of property, plant and equipment	(1)	47	56
Amortisation of right-of-use assets	(2)	104	125
Amortisation and impairment of intangible assets	(3)	452	422
Non-cash changes of provisions	(15)/(16)	16	(239)
Write-downs/(Revaluations)	(28)	1	(9)
Net foreign exchange differences	(30)	669	500
Income taxes	(31)	(80)	(15)
Changes in:
Inventories	(8)	605	895
Trade receivables	(9)	(1,918)	1,669
Tax receivables	(11)	(212)	136
Current financial receivables	(10)	-	-
Other assets	(12)	(60)	(318)
Deferred tax liabilities	(17)	(32)	(32)
Trade payables	(20)	1,343	(3,117)
Tax payables	(21)	2,398	672
Right-of-use assets	(2)	(301)	271
IFRS16 financial payables	(18)	193	(583)
Other current and non-current liabilities	(19)	(789)	(52)
Change in net working capital		1,226	(459)
Changes in provisions	(15)	-	-
Changes in assets/liabilities held for sale/Discontinued operations		-	-
Cash flow generated from operating activities		2,404	129
Interest paid	(30)	(515)	(372)
Income taxes paid	(31)	-	-
Net cash flow generated from operating activities		1,890	(243)
Cash flows from investing activities
Investments in property, plant & equipment	(1)	(58)	13
Investments in intangible assets	(2)	(416)	50
Acquisition of Salotto di Brera net of liquidity acquired		-	-
Changes in other intangible assets	(6);(7)	(54)	(73)
Increase in investments in joint ventures	(5)	5	-
Change in consolidation scope		-
Net cash flow used in investing activities		(523)	(10)
Cash flow from financing activities
Share capital increase		-	-
Change in Shareholders' Equity		598	119
	(18)
New financing		3,275	-
Repayment of loans	(18)	(3,350)	-
Change in financial liabilities	(18)	(615)	19
Net cash flow used in financing activities		(93)	138
Net increase/(decrease) in cash and cash equivalents		1,274	(115)
Cash and cash equivalents at 1 January		1,794	2,474
Cash and cash equivalents at 31 December		3,068	2,360

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

GENERAL INFORMATION

A. Corporate information

The publication of the Condensed Consolidated Financial Statements of Giglio Group S.p.A. (the Company) as of 30 June 2023 was approved by the Board of Directors on 12 September 2023.

The registered office of the parent company Giglio Group S.p.A. is Piazza Diaz No. 6.

The activities of the company and its subsidiaries are described in these Explanatory Notes while the Group's structure is outlined in the Directors' Report. The information on transactions of the Group with the other related parties are presented in Note 35.

B. Accounting standards

The Interim Condensed Consolidated Financial Statements of Giglio Group S.p.A as of 30 June 2023 were prepared in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB) and endorsed by the European Union.

EU-IFRS includes all "International Financial Reporting Standards", all "International Accounting Standards" (IAS), all interpretations of the International Reporting Interpretations Committee (IFRIC), previously called "Standing Interpretations Committee" (SIC) which, at the approval date of the Consolidated Financial Statements, were endorsed by the European Union pursuant to EU Regulation No. 1606/2002 of the European Parliament and European Council of 19 July 2002. The EU-IFRS were applied consistently for all the periods presented in the present document.

The Interim Condensed Consolidated Financial Statements as of 30 June 2022 are comprised of the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Profit or Loss and Comprehensive Income, the Condensed Consolidated Statement of Cash Flows, the Condensed Consolidated Statement of Changes in Equity (all stated in Euro thousands) and the Notes to the Interim Condensed Consolidated Financial Statements.

They were prepared in accordance with IAS 34 Interim Reporting, as established also by Article 154 ter of the Consolidated Finance Act (Legislative Decree No. 58/1998) and should be read together with the Giglio Group 31 December 2022 Annual Consolidated Financial Statements ("latest financial

statements"). Although not presenting all the information required for complete financial statement disclosure, specific explanatory notes are included outlining the events and transactions central to understanding the changes to the statement of financial position and the Giglio Group's performance since the last financial statements.

The Interim Condensed Consolidated Financial Statements are presented in Euro and all the amounts are rounded to the nearest thousandth, unless otherwise specified.

The Euro is the functional and presentation currency of the parent company and that in which the majority of Group operations are conducted, with the exclusion of the activities relating to the subsidiary Giglio USA expressed in US Dollars and of the activities of Giglio Shanghai, expressed in Chinese Yuan.

The Interim Condensed Consolidated Financial Statements provide comparative figures from the previous year.

The consolidation principles, the accounting policies and the measurement estimates and criteria adopted to prepare the condensed consolidated financial statements are in line with those used to prepare the Consolidated Annual Financial Statements as of 31 December 2022, except where specified below.

The Interim Condensed Consolidated Financial Statements were prepared in accordance with the historical cost criterion on a going-concern basis, as the Directors verified the absence of financial, operating or other indicators which may suggest difficulties with regards to the Group's capacity to meet its obligations in the foreseeable future and in particular in the next 12 months.(Note 40). In particular the Giglio Group adopted international accounting standards from the year 2015, with transition date to IFRS at 1 January 2014.

C. Basis of presentation

The Interim Condensed Consolidated Financial Statements are comprised of the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Profit or Loss and Comprehensive Income, the Condensed Consolidated Statement of Cash Flows and the Notes to the Interim Condensed Consolidated Financial Statements.

In particular:

in the Statement of Financial Position, the current and non-current assets and liabilities are shown separately;
in the Statement of Comprehensive Income, the analysis of the costs is based on their nature;
for the Statement of Cash Flows, the indirect method is used.

In particular, the assets and liabilities in the financial statements of the Group are classified as current or non-current.

An asset is considered current where:

it is expected to be realised, or is intended for sale or consumption, in the normal operating cycle;
it is held principally for trading;
It is expected to be realised within twelve months from the balance sheet date; or
it comprises cash or cash equivalents, upon which no prohibition exists on their exchange or utilisation to settle a liability for at least 12 months from the reporting date.

All other assets are classified as non-current.

A liability is considered current where:

it is expected to be settled within the normal operating cycle;
it is held principally for trading;
it is expected to be settled within 12 months from the reporting date; or
the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.

The amounts indicated in the financial statements and the explanatory notes, unless otherwise stated, are in thousands of Euro.

D. Discretional valuations and accounting estimates

The preparation of the Interim Condensed Consolidated Financial Statements of Giglio Group S.p.A. requires estimates and assumptions on the values of the assets and liabilities in the financial statements and on the disclosures on the assets and contingent liabilities at the reporting date: consequently, the actual results may differ from such estimates.

The estimates are used to determine the provisions for doubtful accounts, depreciation and amortisation, write-downs, employee benefits, income taxes and other provisions. The estimates and assumptions are periodically reviewed and the effects of any variation are reflected in the Condensed Consolidated Statement of Profit or Loss.

The principal data subject to estimates refer to:

Identification of Cash Generating Unit (CGU); In application of the requirements in "IAS 36 - Impairment of assets", the goodwill recorded in the Group's Consolidated Financial Statement, by virtue of business combination transactions, was assigned to single CGUs or to groups of CGUs that are expected to benefit from this combination. A CGU is the smallest identifiable group of assets that generates a largely independent cash flow. In the process of identification of the aforementioned CGUs, the management kept note of the specific nature of the activity and the business to which it belongs, verifying that the cash flows generated by a group of activities were strictly independent and largely autonomous from the ones resulting from other activities (or group of activities). The activities included in every CGU were identified also on the basis of the procedures by which the management monitors and manages them.

- Assessment of control requirements' existence:

Pursuant to the provisions of IFRS 10 accounting standard, control is attained when the Group is exposed or is entitled to variable yields resulting from the relation with its subsidiary and has the capacity, through its power over the subsidiary, to influence its yields. The power is the actual capacity to direct the subsidiaries' relevant activities by virtue of substantial existing rights. The existence of control does not depend exclusively on the possession of the voting rights' majority, but on the substantial rights of the investor on the subsidiary. Consequently, the assessment of the management is requested in order to assess specific situations determining substantial rights that attribute to the Group the power to direct the subsidiary's relevant activities so much so as to influence its yields. For the purposes of the assessment of the control requirement, the management shall analyse all facts and circumstances, including all agreements with investors, the rights resulting from other contractual agreements and from potential voting rights (call options, warrants, put options assigned to minority shareholders etc.). These facts and circumstances can be particularly relevant in the context of this assessment, especially when the Group holds less than the majority of the subsidiary's voting right, or similar rights. The Group shall reassess the existence of control

requirements on a subsidiary when the facts and circumstances point at a variation of one or more of the elements taken into account for the assessment of its existence.

Provision for inventory write-down of raw materials and accessories and inventories of finished products; Since the Group deals with products that are influenced by market trends and fashion, product inventories may be subject to impairment. In particular, the provision for inventory writedown of finished products reflects management's estimate on the impairment losses expected on the products of various seasonal collections in stock, taking into account the ability to sell them through the various distribution channels in which the Group operates. Indicatively, write-down assumptions provide for devaluation percentages that increase according to the ageing of the products purchased (it should be noted that the Group deals with both in-season and off-season collections and distributes them among the most important digital retailers in the world) in such a way as to reflect the decrease in selling prices and the reduction in the probability of their sale over time. Underpinning the calculation of this percentage is a statistical analysis on the variation of the ageing product in stock and a constancy assessment of the percentages in use over time. If a change in available information is noted, percentages are re-analysed and possibly adjusted.

- Provision for doubtful accounts:

Through the ageing list and based on the collection of receivables and the assessments provided by the Legal Department, management carefully assesses the status of receivables and overdue receivables and carries out a recoverability analysis; these estimates could also be found to be incorrect since they are subject to a natural degree of uncertainty;

The recoverability analysis of commercial credits is undertaken on the basis of the so-called expected credit loss model, as explained below.

More specifically, expected credit losses are determined on the basis of the product between: (i) the exposure to the counterpart net of relevant mitigating guarantees (so called Exposure At Default or EAD); (ii) the chance that the counterpart does not comply with its payment obligation (so called Probability of Default or PD); (iii) the estimate, in percentage, of the quantity of credit that shall not be recovered in case of default (Loss Given Default or LGD), defined on the basis of previous

experiences (historical series of recovery capacity) and of the possible recovery actions to be undertaken (e.g. out-of-court proceedings, litigations, etc.).

Payments based on shares or options:

The cost of work includes, consistently to the substantial nature of the compensation, the cost of the incentive stock option plan. The incentive cost is determined with regards to the fair value of the financial instruments assigned and to the intended number of shares/options to be assigned; the pertinent share is determined pro-rata temporis over the vesting period, i.e. during the period between the grant date and the assignment date. The fair value shares/options underlying the incentive plan is determine on grant date taking into account the forecasts regarding the achievement of performance parameters associated with market conditions, and cannot be adjusted in the following fiscal years; if obtaining the benefit is linked to conditions other than the market's, the forecast regarding these conditions is reflected by adjusting over the vesting period the number of shares that shall be assigned. At the end of the vesting period, in the event that the plan does not assign shares to the beneficiaries due to the failure t reach performance conditions, the share of the cost concerning market conditions cannot be reversed into the statement of profit or loss and comprehensive income.

It is noted that, on 21 June 2021, the ordinary and extraordinary Shareholders' Meeting took place.

The ordinary Shareholders' Meeting approved the 2021-2028 Stock-Option Plan reserved to the executive directors and/or senior executives of the Company or of its subsidiaries, who shall be identified by the Board of Directors in accordance with the provisions set forth in the regulation of the Stock-Option Plan.

The extraordinary Meeting delegated to the Board of Directors the authority to increase Giglio Group S.p.A. share capital against payment, pursuant to Art. 2439, par 2 of the Civil Code, in separate issues, excluding option rights, pursuant to Art. 2441, par. 8 and as far as applicable - par. 5 of the Civil Code, for a maximum amount of € 180,000.00 in nominal value, through the issue, also in more tranches, of a maximum of no. 900,000.00 ordinary shares without nominal value, to be used only within the scope of the "Stock Option Plan 2021-2028".

The options thus assigned shall be exercised over a three-year vesting period divided in three tranches (up to 30% on the first year, up to 35% on the second year and up to 35% on the third year)

and shall accrue only if the objectives set in the plan are achieved (in terms of performance conditions).

It is noted that the objectives related to 2022 and identified on an annual basis were not met, and that no provision was made necessary with regard to the previous fiscal year nor are there any detectable impacts on the six-month period as of 30 June 2023.

Employee Benefits: whose values are based on actuarial estimates; refer to Note 16 for the main actuarial assumptions;
Goodwill: the recoverability of Goodwill is tested annually and, where necessary, also during the year. The allocation of goodwill to CGUs or groups of CGUs and the calculation of the latter's recoverable value involves the assumption of estimates that depend on subjective valuations and factors that may change over time with consequent effects that are also significant with regard to the valuations carried out by the Directors. These valuations are carried out at the level of cashgenerating units to which the value of goodwill is attributed and assume the higher of the fair value as the recoverable value, if this is available or calculable, and its value in use obtainable from the longterm plans approved by the Boards of Directors. As of 31 December 2022, an impairment test was carried out in order to assess the goodwills' recoverability, as mentioned in the Financial Statements as of 31 December 2022. As of 30 June 2023, no trigger events calling for a new impairment tests occurred, taking into account that the Company believes that 2023's budget will be respected. The procedure resolved upon by the Directors provides for an annual performance of the impairment test should no trigger events occur.
Intangible Rights: the Directors did not identify impairment indicators at the balance sheet date with reference to the value of intangible fixed assets. Further details are available in the notes to the intangible fixed assets. In this regard, it should also be stressed that intangible fixed assets are tested annually for permanent write-downs when there are indications that the carrying amount may not be recovered. When the calculations of the value in use are prepared, Directors must estimate the cash flows expected from the asset or from the cash-generating units and choose an appropriate discount rate so as to calculate the present value of these cash flows. The correct identification of the indicators of the existence of a potential reduction in value as well as the estimates for their determination depends on factors which may vary over time impact upon the valuations and estimates made by the Directors.

Deferred tax assets are recognised to the extent where it is likely there will be adequate future tax profits against which temporary differences or any tax losses can be utilised. In this regard, the Group's management estimates the probable timing and the amount of the future taxable profits.
Business combinations and valuation of acquired assets and liabilities:

In the case of business combinations, the process of allocating the transaction's cost involves estimates and assumptions based on Management's professional judgement and makes it necessary to identify the most suitable methodologies for the valuation of assets acquired and liabilities assumed; The complexity of estimation processes is mitigated by the use, where necessary, of provisional allocation, as permitted by the relevant accounting standard.

Contingent liabilities:

The Group recognises a liability for disputes and risks arising from ongoing legal cases when it considers it probable that a financial outlay will occur and when the liability amount can be reasonably estimated. In the case in which a payment is considered possible, but is not yet determinable, such is reported in the explanatory notes.

E. Management of capital and financial risks

Financial risk objectives and criteria

Group financial liabilities include loans and bank loans, loans from related parties, trade payables, trade and other payables and financial guarantees. The main objective of these liabilities is to fund Group operations. The Group has financial and other receivables, trade and non-trade receivables, cash and cash equivalents and short-term deposits which directly stem from operations.

The Group is exposed to market risk, credit risk and liquidity risk. The Management of the Group is responsible for the management of these risks.

The Board of Directors reviews and approves the management policies of each of the risks illustrated below.

For financing and investing operations the company adopted prudent and risk limitation criteria and no operations were taken of a speculative nature.

Financial risks are monitored through an integrated reporting system aimed at allowing the analytic planning of future activities.

In addition, the company did not utilise derivative financial instruments to hedge against risks regarding its funding requirements.

The financial risks to which the Giglio Group is exposed are illustrated below.

Market risk

Market risk is the risk that the fair value of the future cash flows of a financial instrument may alter on the basis of market price movements. The market price includes three types of risk: currency risk, interest rate risk and other price risks.