B&C Speakers S p A : Separate and Consolidated Financial Statement - as at 31 December 2020

Gruppo B&C Speakers

Separate and consolidated financial statements

as at December 31, 2020

Prepared in compliance with

International Financial Reporting Standards

endorsed by the European Union

B&C Speakers S.p.A.

Via Poggiomoro, 1 Località Vallina

50012 Bagno a Ripoli (Firenze) Italia [e-mail]

B&C Speakers Group Separate and consolidated financial statements as at December 31, 2020

Contents

NOTICE CONVENING THE ORDINARY SHAREHOLDERS' MEETING	5
1	THE B&C SPEAKERS GROUP - Corporate bodies	9
2	Proposed approval of the financial statements and allocation of period profit	10
3	Introduction to the separate and consolidated financial statements at December 312020	10
Consolidated report on operations and Parent Company data	11
4	Consolidated report on operations for the financial year ended on December 31, 2020	12
5	Main data of the Parent Company	29
Consolidated financial statements and notes to the consolidated financial statements	35
6	Consolidated financial statements of the B&C Speakers Group at December 31, 2020	36
	6.1	CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2020	36
	6.2	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR FY 2020	37
	6.3	CONSOLIDATED STATEMENT OF CASH FLOWS FOR FY 2018 PREPARED IN COMPLIANCE WITH THE
	IFRS ADOPTED BY THE EUROPEAN UNION	38

6.4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY OF THE B&C SPEAKERS GROUP AS AT DECEMBER 31, 2019, PREPARED IN COMPLIANCE WITH THE IFRS ADOPTED BY THE EUROPEAN UNION

40

7 Explanatory notes to the consolidated financial statements as at December 31, 2020	41
7.1	Basis of preparation	41

7.3 Analysis of the breakdown of the main items of the consolidated statement of financial

position as at December 31, 2020	57
1. Property, plant and equipment...........................................................................................................................	57
2.	Rights of use ........................................................................................................................................................	57
3.		Goodwill.........................................................................................................................................................	58
5.	Equity investments in associated companies......................................................................................................	61
6.	Deferred tax assets..............................................................................................................................................	62
7.	Other non-currentassets ....................................................................................................................................	62
8.	Inventories ..........................................................................................................................................................	63
9.	Trade receivables ................................................................................................................................................	64
10.	Tax assets ..........................................................................................................................................................	64
11.	Other current assets..........................................................................................................................................	64
12.	Cash and cash equivalents ................................................................................................................................	65
13.	Equity and its components................................................................................................................................	65
14. Long-termborrowings.......................................................................................................................................	67
15.	Financial liabilities for rights of use (current and non-current portion)............................................................	70
16.	Funds related to personnel and similar.............................................................................................................	71
17.	Provisions for risks and charges ........................................................................................................................	72
18.	Short-termborrowings and net financial position ............................................................................................	73
19.	Trade payables ..................................................................................................................................................	74
20.	Tax liabilities......................................................................................................................................................	74
21.	Other current liabilities .....................................................................................................................................	74
22. Commitments, guarantees and ongoing disputes ............................................................................................	75

7.4 Analysis of the breakdown of the main items of the consolidated income statement for 202075

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B&C Speakers Group Separate and consolidated financial statements as at December 31, 2020

	23. Revenues ...........................................................................................................................................................	75
	24.	Cost of sales.......................................................................................................................................................	77
	25. Other revenues .................................................................................................................................................	78
	26.	Indirect Personnel .............................................................................................................................................	78
	27. Commercial Expenses........................................................................................................................................	78
	28.	Administrative and General expenses..............................................................................................................	79
	.................................................................................................................................................................................	79
	29.	Amortisation, depreciation, writedowns and writebacks on trade and other receivables...............................	79
	30.	Financial income and expenses.........................................................................................................................	80
	31.	Taxes..................................................................................................................................................................	80
	32.	Transactions deriving from non-recurringoperations ......................................................................................	81
	33.	Transactions deriving from atypical and/or unusual operations ......................................................................	81
	34.	Information on financial risks............................................................................................................................	81
	35.	Hierarchical levels of the fair value measurement............................................................................................	83
	36. Management and control .................................................................................................................................	84
	37.	Transactions with related parties, parent companies and subsidiaries of the latter........................................	84
	38.	Disclosure regarding public subsidies, contributions and other economic advantages received (pursuant to
	Italian Law 124/2017, Article 1, paragraph 125).....................................................................................................	86
	39.	Significant events after the end of the 2020 financial year ..............................................................................	86
	40.	Publication authorisation ..................................................................................................................................	86
8	Further information	87

8.1 Report of equity investments as required by CONSOB (Communication no. DEM/6064293 of

July 28, 2006)

87

8.2 Fees paid to Directors, Auditors, General Managers and Executives with strategic

responsibilities (thousands of euro) (Art 78, CONSOB reg. no. 11971/99).	88
8.3	Information in accordance with Art. 149-duodecies of the CONSOB Issuers' Regulations.	88

9 Certification of the consolidated financial statements pursuant to Art. 154-bis of Legislative

Decree 58/98	89
10	Report of the Independent Auditors to the Consolidated Financial Statements of the B&C
Speakers Group at December 31, 2020	90
Financial statements and notes of the Parent Company	96
11	Financial statements of the Parent Company B&C Speakers S.p.A. at December 31, 2020	97
11.1	STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2019	97
11.2	STATEMENT OF COMPREHENSIVE INCOME FOR FY 2020	98
11.3	STATEMENT OF CASH FLOW FOR FY 2020	99
11.4	STATEMENT OF CHANGES IN EQUITY OF THE PARENT COMPANY B&C SPEAKERS S.p.A.	101
12	Explanatory notes to the financial statements at December 31, 2020	102
12.1	Basis of preparation	102

12.2 Analysis of the breakdown of the main items of the consolidated statement of financial-asset

position as at December 31, 2020	115
1. Property, plant and equipment.........................................................................................................................	115
2.	Rights of use ......................................................................................................................................................	115
3.	Other intangible assets .....................................................................................................................................	116
4.	Equity investments in subsidiaries ....................................................................................................................	116
5.	Equity investments in associated companies....................................................................................................	120
6.	Deferred tax assets............................................................................................................................................	120
7.	Other non-currentassets ..................................................................................................................................	121
8.	Inventories ........................................................................................................................................................	122
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B&C Speakers Group Separate and consolidated financial statements as at December 31, 2020
9. Trade receivables ..............................................................................................................................................	122
...............................................................................................................................................................................	122
10.	Tax assets ........................................................................................................................................................	123
11.	Other curret assets..........................................................................................................................................	123
12.	Cash and cash equivalents ..............................................................................................................................	124
...............................................................................................................................................................................	124
13.	Equity and its components..............................................................................................................................	124
14. Long-termborrowings.....................................................................................................................................	126
15.	Financial liabilities for rights of use (current and non-current portion)..........................................................	130
16.	Funds related to personnel and similar...........................................................................................................	130
17.	Provisions for risks and charges ......................................................................................................................	132
18.	Short-termborrowings and net financial position ..........................................................................................	132
...............................................................................................................................................................................	132
19.	Trade payables ................................................................................................................................................	133
20.	Tax liabilities....................................................................................................................................................	134
21.	Other current liabilities ...................................................................................................................................	134
22. Commitments and guarantees........................................................................................................................	134

12.3 Analysis of the breakdown of the main items of the consolidated income statement for 2020 of

the Parent Company	135
23. Revenues .........................................................................................................................................................	135
24.	Cost of sales.....................................................................................................................................................	136
25. Other revenues ...............................................................................................................................................	137
26.	Indirect Personnel ...........................................................................................................................................	138
27. Commercial Expenses......................................................................................................................................	138
28.	Administrative and General expenses............................................................................................................	138
...............................................................................................................................................................................	139
29.	Amortisation, depreciation, writedowns and writebacks on trade and other receivables.............................	139
30.	Financial income and expenses.......................................................................................................................	139
31.	Taxes................................................................................................................................................................	140
32.	Transactions deriving from non-recurringoperations ....................................................................................	141
33.	Transactions deriving from atypical and/or unusual operations ....................................................................	141
34. nformation on financial risks...........................................................................................................................	141
35.	Hierarchical levels of the fair value measurement..........................................................................................	143
36. Management and control ...............................................................................................................................	144
...............................................................................................................................................................................	144
37.	Transazioni con imprese correlate, controllanti e con imprese sottoposte al controllo di queste ultime .....	145
38.	Significant events after the end of the 2020 financial year ............................................................................	147
39.	Disclosure regarding public subsidies, contributions and other economic advantages received (pursuant to
Italian Law 124/2017, Article 1, paragraph 125)...................................................................................................	147
40 . Publication authorisation ...............................................................................................................................	147

41. Proposal for approval of the financial statements and allocation of the profit for the year 148

13	Certification of the consolidated financial statements pursuant to Art. 154-bis of
Legislative Decree 58/98	149
14	Report of the Independent Auditors to the Consolidated Financial Statements of the B&C
Speakers Company at December 31, 2020	150
15	Report by the Board of Statutory Auditors	156

Report by the Board of Auditors to the shareholders' meeting of "B. & C. Speakers S.p.A." (Art.

153 of Italian Legislative Decree no. 59/98 and Art. 2429(2) of the Italian Civil Code

156

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B&C Speakers Group Separate and consolidated financial statements as at December 31, 2020

NOTICE CONVENING THE ORDINARY SHAREHOLDERS' MEETING

The Shareholders are called to meet on April 29, 2020 at the company's registered office in Bagno a Ripoli (FI). Via Poggiomoro 1, Vallina District at 11.00am, on single call, to discuss and resolve on the following

Agenda:

1. Statutory and consolidated financial statements as at December 31, 2020. Related and consequent resolutions;
2. 2) Report on Remuneration pursuant to art. 123-ter of Legislative Decree 58/98. Related and consequent resolutions;
3. 3) Appointment of the Board of Directors: determination of the number of members of the Board of Directors; appointment of the Directors; appointment of the Chairman of the Board of Directors; determination of the annual remuneration of the members of the Board of Directors.
4. 4) Appointment of the Board of Statutory Auditors: appointment of standing and alternate members; appointment of the President; determination of the remuneration of the members.
5. 5) Authorization for the purchase and sale of own shares. Related and consequent resolutions.

COVID 19 Emergency -

Methods of holding the Shareholders' Meeting pursuant to the Law Decree of 17 March 2020, n. 18

In order to minimize the risks associated with the extension of the Covid-19 health emergency, B&C Speakers S.p.A. has decided to make use of the option - pursuant to art. 106 of the Law Decree of March 17, 2020, n. 18, as referred to in art. 71 of the Law Decree of August 14, 2020 n. 104 - to provide that the participation of the shareholders in the Shareholders' Meeting takes place exclusively through the Designated Representative pursuant to art. 135-undecies of the Legislative Decree n. 58/98 ("TUF") - (hereinafter the "Designated Representative") - in the manner specified below.

In accordance with the provisions of art. 106, paragraph 2, of the aforementioned Decree, without prejudice to the foregoing, the participation in the Assembly of the members of the corporate bodies, the Secretary and the Designated Representative, as well as any other persons authorized to do so by the President of the Assembly, in compliance with the containment of the Covid-19 epidemic provided for by the applicable legal provisions, may take place exclusively through video / telecommunication means that guarantee identification, in a manner that the President himself will define and communicate to each of the aforementioned subjects, in compliance the rules applicable for this eventuality, without it being in any case necessary that the Chairman or the Secretary be in the same place.

Right to attend the Shareholders' Meeting and exercise the voting right

Those who have the right to vote are entitled to attend the Shareholders' Meeting and exercise the right to vote, exclusively through the Designated Representative, based on a communication made to the Company by a person who qualifies as "Intermediary" pursuant to of the applicable regulations, issued by the latter taking as a reference the resulting evidence at the end of the accounting day of April 20, 2021, ie the seventh open market day prior to the date set for the Shareholders' Meeting in single call (so-called record date), in accordance with the provisions of Article 83-sexies of the TUF.

The credit and debit registrations made on the accounts after the record date are not relevant for the purposes of legitimizing the exercise of the right to vote in the Shareholders' Meeting. The subjects who will be owners of the shares only after that date will not have the right to participate nor to vote in the Shareholders' Meeting and, therefore, will not be able to give a proxy to the Designated Representative.

Communications from the intermediary must reach the Company by April 26, 2021, that is by the end of the third open market day preceding the date set for the Shareholders' Meeting in single call.

Furthermore, the legitimacy to attend the Shareholders' Meeting and to vote, always exclusively through the Designated Representative, remains valid if the communications are received by the Company after the aforementioned deadline, provided that it is within the beginning of the meeting's work.

5