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Viale Abruzzi, 94

20131 Milano

BDO Italia S.p.A. – Sede Legale: Viale Abruzzi, 94 – 20131 Milano – Capitale Sociale Euro 1.000.000 i.v.

Codice Fiscale, Partita IVA e Registro Imprese di Milano n. 07722780967 - R.E.A. Milano 1977842

Iscritta al Registro dei Revisori Legali al n. 167911 con D.M. del 15/03/2013 G.U. n. 26 del 02/04/2013

BDO Italia S.p.A., società per azioni italiana, è membro di BDO International Limited, società di diritto inglese (company limited by guarantee), e fa parte

della rete internazionale BDO, network di società indipendenti.

Key audit matter

Audit response

IMPAIRMENT OF GOODWILL

Note 6 “Goodwill”

The total goodwill, equal to Euro 215,969

thousand, arises from the following business

combinations: Provinco Italia S.p.A. for Euro 11,289

thousand, Enoitalia S.p.A. 156,942 thousand,

Enovation Brands Inc. for Euro 17,038 thousand,

Barbanera S.r.l. for Euro 16,687 thousand, Fossalto

S.r.l. for Euro 1,159 thousand and Raphael Dal Bo

AG for Euro 12,854 thousand.

to impairment testing which consists in estimating

the recoverable value of the CGUs - made up of the

subsidiaries - and comparing them with the net

book value of the related assets, including goodwill

pursuant to IAS 36.

The value in use corresponds to the current value

of the future financial flows that are expected to

be associated with the assets subject to

impairment, using a rate that reflects the specific

date.

As at December 31, 2023, no losses in value emerge

between the book value and the related value in

use (determined according to the Discounted Cash

Flow methodology).

The impairment of goodwill is a key audit matter in

the audit of the consolidated financial statements,

due to the subjectivity in the determination of

parameters used to estimate the value in use.

The main audit activities performed are detailed as

follows:

support of BDO experts, related to

— reasonableness of key assumptions

and hypotheses underlying the cash

flow forecasts;

— analysis of the Company’s

impairment test based on the

applicable standards;

— assessment of the key assumptions

underlying the impairment model

with reference to cash flows,

discount rate, growth rate and

terminal value valuation;

— mathematical accuracy verification

of the impairment model.

Auditor’s Responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as

a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s

report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee

that an audit conducted in accordance with ISA Italia will always detect a material misstatement when it

exists. Misstatements can arise from fraud or error and are considered material if, individually or in

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the

basis of these consolidated financial statements.

As part of an audit in accordance with ISA Italia, we exercised professional judgment and maintain

professional skepticism throughout the audit. We also have:

Identified and assessed the risks of material misstatement of the consolidated financial

statements, whether due to fraud or error, designed and performed audit procedures responsive

to those risks, and obtained audit evidence that is sufficient and appropriate to provide a basis

for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher

than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control.

Obtained an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an

opinion on the effectiveness of the Group’s internal control.

Evaluated the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by the Directors.

Concluded on the appropriateness of the Directors’ use of the going concern basis of accounting

and, based on the audit evidence obtained, whether a material uncertainty exists related to

events or conditions that may cast significant doubt on the Group’s ability to continue as a going

concern. If we conclude that a material uncertainty exists, we are required to draw attention in

our auditor’s report to the related disclosures in the consolidated financial statements or, if such

disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit

evidence obtained up to the date of our auditor’s report. However, future events or conditions

may cause the Group to cease to continue as a going concern.

Evaluated the overall presentation, structure and content of the consolidated financial

statements, including the disclosures, and whether the consolidated financial statements

represent the underlying transactions and events in a manner that achieves fair presentation.

Obtained sufficient appropriate audit evidence regarding the financial information of the entities

or business activities within the Group to express an opinion on the consolidated financial

statements. We are responsible for the direction, supervision and performance of the group

audit. We remain solely responsible for our audit opinion on the consolidated financial

statements.

BDO Italia S.p.A.

Signed by Vincenzo Capaccio

Partner