Exhibit 99.1

KPMG S.p.A.

Revisione e organizzazione contabile

Piazza Salvemini, 20

35131 PADOVA PD

Telefono +39 049 8249101

Email it-fmauditaly@kpmg.it

PEC kpmgspa@pec.kpmg.it

Independent auditors’ report

To the board of directors of

Limacorporate S.p.A.

Report on the audit of the consolidated financial statements

Opinion

We have audited the accompanying consolidated financial statements of the Limacorporate Group (the “group”), which comprise the statement of financial position as at 31 December 2022, the income statement and statements of comprehensive income, cash flows and changes in equity for the year then ended and notes thereto, which include a summary of the significant accounting policies.

In our opinion, the accompanying consolidated financial statements give a true and fair view of the financial position of the Limacorporate Group as at 31 December 2022 and of its financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standards issued by International Accounting Standards Board (“IFRS issued by the IASB”).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISA). Our responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of the consolidated financial statements” section of our report. We are independent of Limacorporate S.p.A. (the “parent”) in accordance with the ethics and independence rules and standards applicable in Italy to audits of financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter – IFRS issued by the IASB adoption and error correction

We draw attention to Note 4.1 “Transition to IFRS issued by IASB“ to the consolidated financial statements, which indicates the group has corrected an error related to the payback mechanism accounted in compliance with IFRS 15 that was reported prior to the group’s adoption of the IFRS issued by IASB. Our opinion is not modified in respect of this matter.

Other Matter

The consolidated financial statements of Limacorporate Group as at 31 December 2022 has been prepared for its inclusion in the offering memorandum drawn up by Enovis Corporation as part of its potential issue of notes.

Limacorporate Group

Independent auditors’ report

31 December 2022

Responsibilities of the parent’s directors and board of statutory auditors (“Collegio Sindacale”) for the consolidated financial statements

The directors are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with the International Financial Reporting Standards issued by International Accounting Standards Board and, within the terms established by the Italian law, for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

The directors are responsible for assessing the group’s ability to continue as a going concern and for the appropriate use of the going concern basis in the preparation of the consolidated financial statements and for the adequacy of the related disclosures. The use of this basis of accounting is appropriate unless the directors believe that the conditions for liquidating the parent or ceasing operations exist, or have no realistic alternative but to do so.

The Collegio Sindacale is responsible for overseeing, within the terms established by the Italian law, the group’s financial reporting process.

Auditors’ 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 auditors’ 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 will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the 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, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

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Limacorporate Group

Independent auditors’ report

31 December 2022

We communicate with those charged with governance, identified at the appropriate level required by ISA, regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Padua, 5 October 2023

KPMG S.p.A.

Silvia Di Francesco

Director

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Consolidated financial statements as at 31 December 2022

Contents

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Consolidated financial statements as at 31 December 2022 of the Limacorporate Group

Statement of financial position

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Income statement

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Statement of comprehensive income

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Statement of changes in equity

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Statement of cash flows

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Notes to the consolidated financial statements as at 31 December 2022

[2.1] General information

The Limacorporate Group (the “group”) designs, creates and sells joint implants and repair solutions in the medical sector.

The parent, Limacorporate S.p.A. (“Limacorporate” or the “parent”), was set up and is domiciled in Italy. Its registered office is at Via Nazionale 52, San Daniele del Friuli (Udine) and its company registration number is 173824.

The group carries out most of its business at its registered office while some activities are also performed by the subsidiaries.

The consolidated financial statements as at and for the year ended 31 December 2022 include the financial statements of the parent and the subsidiaries (together the “group”).

These consolidated financial statements as at 31 December 2022 were approved by the parent’s board of directors at its meeting on 3 October 2023.

The parent is managed and coordinated by Emil Holding II S.à.r.l., whose details are provided below:

[2.2] Basis of presentation

The consolidated financial statements as at 31 December 2022 is prepared in accordance with the IFRS issued by International Accounting Standards Board (IASB) applying IFRS 1 – First-time Adoption of International Financial Reporting Standards.

Following the adoption of the IFRS issued by IASB, the Group’s equity and profit for the year previously determined under the IFRS endorsed by the European Union, were corrected due to a correction of error related to the payback mechanism accounted in compliance with IFRS 15, retrospectively, as reduction of revenue (variable consideration). The note [4.1] Transition to IFRS issued by IASB describes the corrected error and transition criteria and includes the reconciliation schedules of the Group’s equity and profit for the year for the comparative periods.

These consolidated financial statements as at 31 December 2022 comprise the statement of financial position, income statement, statement of comprehensive income, statement of changes in equity, statement of cash flows and these notes. They comply with the provisions of IAS 1 Presentation of financial statements and the general principle of historical cost, except for those items that, pursuant to the IFRS, are measured at fair value, as explained in the accounting policies of the individual captions in note 2.4 Basis of preparation. The statement of financial position has been prepared by separating assets and liabilities into current and non-current, whereas costs are classified in the income statements on the basis of their nature. The statement of cash flows has been prepared using the indirect method.

The notes to the consolidated financial statements as at 31 December 2022 include the information generally required by ruling legislation and the IFRS, suitably presented with reference to the financial statements schedules used.

The consolidated financial statements as at 31 December 2022 have been prepared on a going concern basis, as the related assumptions are deemed to be met.

All figures are in thousands of Euros, unless indicated otherwise. The Euro is the parent’s functional and presentation currency. For each financial statements caption, the corresponding amount of the previous year is provided for comparative purposes.

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The consolidated financial statements of Limacorporate Group as at 31 December 2022 has been prepared for its inclusion in the offering memorandum drawn up by Enovis Corporation as part of its potential issue of notes.

[2.3] Consolidation scope

The consolidated financial statements of the Limacorporate Group as at 31 December 2022 include the financial statements of the parent and the Italian and foreign subsidiaries at 31 December 2022.

Subsidiaries are those companies over which the group has control, as defined by IFRS 10 Consolidated financial statements as at 31 December 2022. Control exists when the group has the power to, directly or indirectly, govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements as at 31 December 2022 starting from when control is assumed and until such control ceases to exist.

The table below lists the companies included in the consolidation scope at 31 December 2022.

Subsidiaries are included in the consolidation scope from when the group acquires control, as defined above, and are excluded from when the group no longer has control.

Amounts in thousands (of the stated currency)

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Lima Orthopaedics Canada Inc. incorporated under Canadian law in October 2021 was included in the consolidation scope in 2022. It began operations in the first half of 2022 and was not consolidated in 2021 as it was not yet up and running and was immaterial.

For consolidation purposes, the figures of the individual companies at the reporting date were restated to comply with the IFRS adopted by the group. The reporting date of all of the consolidated companies is 31 December.

The basis of consolidation is set out below:

The following rates were applied in translating the financial statements of foreign operations:

[2.4] Basis of preparation

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[2.4.1] Business combinations and goodwill

Business combinations are recognised using the acquisition method under IFRS 3. To this end, the identifiable assets acquired and the liabilities assumed are recognised at their respective acquisition-date fair value. The consideration transferred in a business combination is the aggregate of the fair value, at the date of exchange, of assets acquired, liabilities assumed and equity instruments issued by the acquirer, in exchange for control of the acquiree.

Goodwill is the positive difference between the consideration transferred, increased by both the fair value at the acquisition date of any non-controlling interests already held in the acquiree and the amount of non-controlling interests held in the acquiree by third parties (measured at fair value or based on the present value of the acquiree’s identifiable net assets), and the fair value of such assets and liabilities.

At the acquisition date, goodwill is allocated to each of the largely independent cash-generating units that are expected to benefit from the synergies of the business combination.

If the difference between the consideration transferred (increased by the above components) and the fair value of the net assets acquired is negative, this is recognised as a gain from a bargain purchase in the income statement in the year of acquisition.

Any goodwill related to non-controlling interests is included in the carrying amount of the relevant equity investments.

After initial recognition, goodwill is not amortised and is recognised net of any cumulative impairment losses, calculated using the methods set out in section [2.4.6] Impairment losses.

As set out in section [3.2] Goodwill of this report, the market multiples method is used to determine the fair value of goodwill, using listed comparable companies (these multiples are compared with the implicit multiple calculated using the group’s actual figures), except for CGU TechMah for which the value in use is defined using estimated future cashflows by applying a discount rate.

IFRS 3 is not applied retrospectively to business combinations that took place prior to 1 January 2018, i.e., the date of the parent’s transition to the IFRS. Accordingly, the amount of goodwill determined under the previous reporting standards, i.e., the carrying amount at such date, is maintained for such business combinations, subject to the recognition of any impairment losses.

[2.4.2] Intangible assets

An intangible asset is an identifiable asset without physical substance, controlled by the group and that generates future economic benefits, in addition to goodwill when acquired against consideration.

Identifiability is defined with reference to the possibility of distinguishing the intangible asset acquired from goodwill. An intangible asset is identifiable when it: (i) arises from a legal or contractual right or (ii) is separable, i.e., can be sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract. An entity controls an asset if it has the power to obtain the future economic benefits flowing from the underlying resource and to restrict the access of others to such benefits.

Intangible assets are stated at cost, which is determined in the same manner as for property, plant and equipment.

Intangible assets with finite useful lives are amortised over their estimated useful lives starting from when they are available for use.

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The amortisation rates adopted in 2022 are shown in the following table by asset category:

Development expenditure

Development expenditure is expensed when incurred.

Development expenditure incurred for a specific project is only capitalised when the group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use and for sale, its intention to complete such asset and use or sell it, how the intangible asset will generate probable future economic benefits, the availability of adequate technical, financial and other resources to complete the development and its ability to measure reliably the expenditure attributable to the intangible asset during its development.

Subsequent to initial recognition, development expenditure is measured at cost less any accumulated amortisation and any accumulated impairment losses. Amortisation of the asset starts from when the development phase has been completed and the asset is available for use. The asset is amortised over the period for which the underlying project is expected to generate revenue for the group.

Industrial patents and intellectual property rights

Industrial patents and intellectual property rights refer to costs for patents owned by Limacorporate S.p.A..

Concessions, licences, trademarks and similar rights

This caption refers to costs to file and register trademarks and costs incurred to acquire commercial licences. The acquisition costs are amortised over a period equal to the useful life of the acquired right.

Other intangible assets

This caption refers to leasehold improvements. The capitalised costs are amortised on the basis of the residual term of the relevant lease contract.

[2.4.3] Property, plant and equipment

Property, plant and equipment are recognised at acquisition or production cost including directly attributable costs incurred to ready the asset for its intended use. Such cost includes costs to replace parts of equipment and plant when they are incurred if they meet the recognition requirements.

Assets acquired under business combinations before 1 January 2018 (the date of the parent’s transition to the IFRS) are recognised at their pre-existing carrying amount, determined within such business combinations in accordance with the previous reporting standards, i.e., at deemed cost.

The carrying amount (cost less accumulated depreciation and cumulative impairment losses) of the replaced parts of equipment and plant is taken to profit or loss at the time of replacement.

Maintenance and repair costs, which do not add to the value of the assets and/or prolong their residual useful lives, are expensed when incurred. Otherwise they are capitalised.

Property, plant and equipment are stated net of any accumulated depreciation and any cumulative impairment losses determined using the methods set out below. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset for the group.

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The depreciation rates used are shown in the following table by asset category:

The residual value of the assets, the useful life and the depreciation method applied are reviewed at each year end and adjusted prospectively if necessary.

If significant parts of an item of property, plant and equipment have different useful lives, such parts are recognised separately. Land, free of construction or annexed to buildings, is recognised separately and is not depreciated since it has an unlimited useful life.

The carrying amount of an item of property, plant and equipment and every significant part initially recognised is eliminated on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of the item (calculated as the difference between the carrying amount of the asset and the net disposal proceeds) is included in profit or loss when the item is derecognised.

[2.4.4] Leases

IFRS 16 defines the recognition, measurement, presentation and disclosure requirements for leases. Under IFRS 16, lessees are required to recognise all leases using a single accounting model similar to that used to recognise finance leases under IAS 17.

If a contract contains a lease, at the commencement date, the lessee shall recognise an asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. The lessee shall recognise interest on the lease liability and depreciation of the right-of-use asset separately. At inception of a contract, the entity shall assess whether the contract is, or contains, a lease. The contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. An entity shall determine the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option and periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option.

[2.4.5] Equity investments

Investments in associates and joint ventures are measured using the equity method, recognising the group’s share of the profits or losses for the year in the income statement, with the exception of the effects related to other changes in the equity of the investee, other than owner transactions, that are directly recognised in other comprehensive income.

In the event of losses exceeding the carrying amount of the equity investment, the excess is recognised in a specific provision to the extent the parent is obliged to fulfil legal or constructive obligations to the investee or to cover its losses.

Investments in other companies are measured at fair value and the fair value gains and losses are taken to equity. If fair value cannot be reliably determined, they are measured at cost, adjusted for any impairment losses.

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[2.4.6] Impairment losses

At the reporting date, the carrying amount of property, plant and equipment, intangible assets, financial assets and equity investments is tested for indicators of impairment. Should such indicators exist, the group estimates the recoverable amount of the asset to check the recoverability of the carrying amount and determine any impairment loss to be recognised. Intangible assets with indefinite useful lives or not yet available for use are tested for impairment at least annually, irrespective of whether any indication of impairment exists, or more frequently if an indication of impairment exists.

In order to identify impairment losses, assets are grouped into the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets (the cash-generating unit, CGU). Reference should be made to section [3.2] Goodwill for details of the group’s CGU. The goodwill generated by business combinations is allocated to the CGU that is expected to benefit from the combinations’ synergies. The recoverable amount of an asset or a CGU is the higher of its value in use and its fair value less costs to sell.

Multiples are compared with the implicit multiple calculated using the group’s actual figures. When the carrying amount of an asset or a CGU exceeds its recoverable amount, the group recognises an impairment loss in profit or loss. Impairment losses on the CGU are allocated first to reduce the carrying amount of any goodwill allocated to it and then to the other assets of the CGU pro rata on the basis of their carrying amounts. Impairment losses on goodwill cannot be reversed. Impairment losses on other assets are reversed to the carrying amount that would have been determined (net of amortisation and depreciation) had no impairment losses been recognised in prior years.

The market multiples method is used to determine the value in use using listed comparable companies for the group’s CGU except for TechMah CGU where the value in use of the CGU Techmah is defined using estimated future cashflows by applying a discount rate (weighted average cost of capital).

[2.4.7] Financial instruments

The financial instruments held by the group are described below.

Financial assets

Financial assets include equity investments, current securities, loans and borrowings, as well as derivatives with a positive fair value, trade receivables and other assets, in addition to cash and cash equivalents.

Specifically, cash and cash equivalents include cash, bank deposits and highly marketable securities that are readily convertible to cash and are subject to an immaterial risk of changes in value.

Current securities include short-term or marketable securities which represent temporary investments of available funds and do not meet the requirements to be classified as cash and cash equivalents. Financial assets represented by debt instruments are classified in the consolidated financial statements as at 31 December 2022 and measured using the business model adopted by the group for managing financial assets and based on the cash flows related to each financial asset. Financial assets also include equity investments not held for trading. Such assets are strategic investments and the group has opted to recognise fair value gains or losses thereon through profit or loss (fair value through profit or loss, FVTPL).

Financial assets are tested for impairment using a model based on expected credit losses.

Financial liabilities

Financial liabilities include loans and borrowings, as well as derivatives with a negative fair value, trade payables and other liabilities.

Financial liabilities are classified and measured at amortised cost, with the exception of those initially measured at fair value, e.g., financial liabilities related to earn-out considerations for business combinations and derivatives and financial liabilities for options on non-controlling interests.

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Derecognition of financial assets and liabilities

A financial asset or liability (or, where applicable, part of a financial asset/liability or part of a group of similar financial assets/liabilities) is derecognised when the group unconditionally transfers the contractual rights to receive the cash flows of the financial asset or the obligation to make payments or fulfil other obligations related to the liability.

[2.4.8] Inventories

Raw materials and packaging are measured at the lower of purchase cost and estimated replacement value based on market trends. The cost is calculated using the weighted average cost for the year.

Semi-finished products and finished goods are measured at purchase or production cost, considering their stage of completion, or their realisable value based on market trends, if lower. The production cost includes the reasonably attributable portion of direct and indirect manufacturing costs.

The resulting amount is written down through the allowance for inventory write-down to account for items whose expected realisable value is lower than their cost.

[2.4.9] Trade receivables and other assets and trade payables and other liabilities

Trade receivables and other assets that derive from the supply of credit facilities, goods or services to third parties are classified under current assets, except when they are due after one year of the reporting date with reference to loans and receivables. If they have a set due date, current and non-current loan assets, other current and non-current assets and trade receivables, with the exception of derivatives, are measured at amortised cost calculated using the effective interest method. If they do not have a set due date, financial assets are measured at cost. Loans and receivables due after one year that are non-interest bearing or accruing interest lower than market rates are discounted using market rates.

The above financial assets are measured using the expected credit loss impairment model introduced by IFRS 9.

Trade payables and other liabilities that arise from the acquisition of credit facilities, goods or services from a third party supplier are classified under current liabilities, except when they are due after one year of the reporting date with reference to loans and borrowings.

On initial recognition, current and non-current loans and borrowings, other current and non-current liabilities and trade payables are stated at fair value, which normally coincides with the transaction price including transaction costs. Subsequently, all financial liabilities are measured at amortised cost calculated using the effective interest method.

[2.4.10] Employee benefits

The liability related to short-term employee benefits paid during the employment relationship is recognised on an accruals basis at the amount accrued at the reporting date.

The liability related to employee benefits paid upon or after termination of the employment relationship via defined benefit plans, is recognised at the amount accrued at the reporting date.

The liability related to employee benefits paid upon or after termination of the employment relationship via defined benefit plans, net of any plan assets and advances granted, is calculated using actuarial assumptions and recognised on an accruals basis in line with the service needed to obtain the benefits. Such liability is calculated by independent actuaries. The gain or loss deriving from the actuarial calculation is fully recognised in the statement of comprehensive income for the relevant year.

Defined benefit plan liabilities are measured using the actuarial assumptions set out in section [3.14] Employee benefits of the notes to the consolidated financial statements as at 31 December 2022.

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[2.4.11] Provisions for risks and charges

The provisions for risks and charges are recognised when the group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation or transfer it to third parties at the reporting date. Where the effect of the discounting is material, the provisions are calculated by discounting the estimated future cash flows at a rate that reflects current market assessments of the time value of money. When discounting is used, the carrying amount of the provision increases to reflect the passage of time and this increase is recognised as borrowing cost.

[2.4.12] Share-based payments

The grant-date fair value of equity-settled share-based payment arrangements agreed with employees is generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions. With regard to non-vesting conditions, any differences between expected and actual outcomes do not have an impact on the consolidated financial statements as at 31 December 2022.

The fair value of the amount payable to employees in respect of cash-settled share-based payments is recognised as an expense with a corresponding increase in liabilities, over the period during which the employees become unconditionally entitled to payment. The liability is remeasured at each reporting date and at the settlement date based on the fair value of the share-based payments. Any fair value gains or losses are recognised in profit or loss.

The parent has had agreements with some managers for the award of options and/or shares for several years (see section [4.8] Incentive plans).

[2.4.13] Revenue and expense

Based on the five-step model introduced by IFRS 15, the group recognises revenue after identifying the contract(s) with a customer and the performance obligations in the contract (transfer of goods and/or services), determining the transaction price to which it expects to be entitled in exchange for fulfilling performance obligations (at a point in time or over time). Revenue is measured on the basis of the transaction price excluding amounts collected on behalf of third parties. Based on the group’s internal analysis of contracts with customers, the group has not identified any performance obligations that are satisfied over time and, therefore, the group recognises revenue upon the transfer of control of the promised goods or services to the customer. Revenue is measured to the extent that it is probable that the economic benefits will flow to the group and the amount can be measured reliably.

Revenue is adjusted for any discounts and volume rebates allowed by the group in contracts with customers and for the payback (variable considerations) see [3.20] Revenue and other revenue and income and [3.13] Provisions for risks and charges for payback system.

Expense is recognised when the goods and services are sold or consumed during the year or by systematic allocation, or when it is not possible to identify their future use.

Expense items are classified by nature in accordance with the applicable IFRS.

[2.4.14] Government grants

Grants related to income are taken to profit or loss in the year in which the relevant expense is recognised.

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Grants related to assets received for projects and development activities are recognised under liabilities and subsequently recognised under operating revenue in line with the amortisation and depreciation of the relevant assets.

Grants due for investments in research and development are recognised in line with the progress of the research, calculated on the basis of the progress reports issued to the relevant bodies and the stage of completion reported by those in charge of the research, if all requirements for their disbursement are met.

[2.4.15] Financial income and expense

Financial income and expense are recognised on an accruals basis on the basis of interest accrued on the net amount of the relevant financial assets and liabilities, using the effective interest method.

[2.4.16] Dividends

Dividends are recognised when the shareholder’s right to receive payment is established.

[2.4.17] Income taxes

Income taxes recognised in profit or loss are the sum of current and deferred taxes.

Income taxes for the year are determined on the basis of ruling legislation. They are recognised in profit or loss, except for those related to items recognised directly in equity, for which the tax effect is accounted for directly in equity.

Income tax liabilities are recognised under current tax liabilities, net of advances paid. Any tax credits are recognised under current tax assets.

Deferred tax assets and liabilities are calculated on the temporary differences between the carrying amounts of assets and liabilities (resulting from the application of the accounting policies set out in note [2.4] Basis of preparation) and their tax bases (deriving from the application of the tax legislation ruling in the country of the subsidiaries). Current and deferred tax assets and liabilities are offset when the group has the legally enforceable right to offset.

Deferred taxes are calculated using the tax rates expected to be enacted in the years in which the temporary differences will be recovered or settled. Deferred tax assets and liabilities are not discounted.

Deferred tax assets are recognised on temporary differences and to the extent that it is probable the group will have future taxable profits that will allow their recovery.

[2.4.18] Fair value

IFRS 13 is a common framework for fair value measurement and relevant disclosure when this measurement is required or allowed by other IFRS. Specifically, the standard sets out the definition of fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

IFRS 13 establishes a hierarchy that categorises the inputs used in the valuation techniques adopted to measure fair value into different levels, as follows:

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In some cases, the inputs used to measure the fair value of an asset or a liability might be categorised within different levels of the fair value hierarchy. In those cases, the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The group recognises transfers among the different levels of the fair value hierarchy at the end of the year in which the transfer took place.

Reference should be made to the notes to the individual financial statements items for the definition of the fair value hierarchy level used to classify the individual instruments measured at fair value or whose fair value is disclosed.

The fair value of derivatives is calculated by discounting estimated cash flows using the market interest rates at the reporting date and the credit default swaps issued by the counterparty and group companies, to include the non-performance risk explicitly provided for under IFRS 13.

Where market prices are not available, the fair value of non-derivative medium/long-term financial instruments is calculated by discounting estimated cash flows using the market interest rates at the reporting date and considering counterparty risk for financial assets and credit risk for financial liabilities.

[2.4.19] Use of estimates

In preparing the consolidated financial statements as at 31 December 2022, the directors were required to apply accounting policies that are, at times, based on judgements or past experience or assumptions deemed reasonable and realistic at the time, depending on the relevant circumstances. The application of such estimates and assumptions impacts the carrying amounts recognised in the statement of financial position, income statement, statement of comprehensive income and statement of cash flows, in addition to the disclosure provided. The end results of the assessments in which such estimates and assumptions were used may differ from those recognised in the consolidated financial statements as at 31 December 2022 due to the inherent uncertainty of the assumptions and the conditions underlying the estimates.

Actual results may differ from those estimated. Estimates and assumptions are reviewed on an ongoing basis. The effect of a change in accounting estimates is recognised in profit or loss in the period of the change, if the change affects that period only, or the period of the change and future periods, if the change affects both.

Estimates mainly refer to the following captions:

Impairment losses on non-current assets and goodwill

Non-current assets include property, plant and equipment, intangible assets including goodwill and other financial assets.

Management periodically revises the carrying amount of non-current assets held and used and assets held for sale when events and circumstances require such revision. This is performed using the estimates of cash flows the group expects to derive from using or selling the asset and suitable discount rates for calculating the present value.

When the carrying amount of a non-current asset has been impaired, the group recognises an impairment loss equal to the excess between the carrying amount and the amount to be recovered through use or sale of the asset, determined using the parent’s or group’s most recent plans. Reference should be made to note [2.4.6] Impairment losses.

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Loss allowance

The loss allowance is management’s best estimate of the potential credit losses on trade receivables from end customers. Reference should be made to note [2.4.8] Trade receivables and other assets and trade payables and other liabilities for a description of the criteria used in estimating the allowance.

Allowance for inventory write-down

Inventories of slow-moving raw materials and finished goods are periodically analysed on the basis of historical data and the possibility of selling them at prices lower than normal market transactions. If, as a result, the carrying amount of inventories needs to be written down, the group recognises a specific allowance for inventory write-down.

Recoverability of deferred tax assets

The group pays taxes in numerous countries and some estimates are required to calculate the taxes in each jurisdiction. It recognises deferred tax assets to the extent that it is probable that future taxable profits will be available and over a period of time compatible with the time horizon implicit in the management estimates.

Estimate of the provisions for risks and contingent liabilities

The group could be subject to legal and tax disputes regarding a vast range of issues that are subject to the jurisdiction of various countries. Disputes and litigation against the group are subject to a different degree of uncertainty, including the facts and circumstances inherent to each dispute, the jurisdiction and different applicable laws. In the ordinary course of business, management consults its legal consultants and legal and tax experts. The group recognises a liability for such disputes when it is deemed probable that they will result in an outflow of resources and when the amount of the resulting losses can be reasonably estimated. If an outflow of resources is possible but the amount cannot be determined, such fact is disclosed in the notes to the consolidated financial statements as at 31 December 2022.

Employee incentive plans and financial liabilities

Reference is made to section [4.8] Incentive plans for a description of the calculation of the fair value of share-based payments as part of group management incentive plans. Section [3.15] Current and non-current financial liabilities provides details of the calculation of fair value of the group’s financial liabilities.

[2.4.20] Translation of foreign currency items

The financial statements of each consolidated company are prepared using the functional currency related to the economy where each company operates. Transactions in currencies other than the functional currency are recognised at the exchange rate at the date of the transaction. Foreign currency monetary assets and liabilities are subsequently translated at the closing rate and any exchange differences are taken to profit or loss. Foreign currency non-monetary assets and liabilities recognised at historical cost are translated using the exchange rate at the date of the transaction.

For consolidation purposes, the foreign currency reporting packages of consolidated companies are translated using the closing rates for asset and liability captions, including goodwill and consolidation adjustments, and the average rate for the year (if similar to the respective transaction-date rates) or the period under consolidation, if lower, for income statement captions. The relevant exchange differences are taken directly to the statement of comprehensive income and reclassified to profit or loss when control over the investee is lost and, thus, it is deconsolidated.

[2.4.21] Operating segments

An operating segment is a component of an entity:

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Note [4.2] Operating segments provides information about the single operating segment identified.

[2.4.22] New standards and interpretations, revisions and amendments to existing standards

As required by IAS 8 Accounting policies, changes in accounting estimates and errors, below are the new standards and interpretations, in addition to amendments to existing and applicable standards and interpretations, applicable starting from 1 January 2022 and not yet in effect at the reporting date.

[2.4.22.1] New standards and interpretations applicable from 1 January 2022

The amendments to the IFRS adopted during the year included:

On 14 May 2020, the IASB published the following amendments:

All of the amendments are effective for annual periods beginning on or after 1 January 2022.

The adoption of the other standards and interpretations detailed above has not had a material impact on the measurement of the group’s asset, liabilities, costs and revenue.

[2.4.22.2] Standards, amendments and interpretations not yet mandatory and not adopted early at 31 December 2022

On 18 May 2017, the IASB published IFRS 17 Insurance contracts which will replace IFRS 4 Insurance contracts.

The objective of the new standard is to ensure that an entity provides relevant information that faithfully represents the rights and obligations deriving from insurance contracts issued. The IASB developed the standard to eliminate inconsistencies and deficiencies in existing accounting standards, providing a single principle-based framework covering all types of insurance contracts, including reinsurance contracts held by an insurance company.

The new standard also sets out presentation and disclosure requirements to improve the comparability between entities operating in the insurance industry.

Under IFRS 17, an entity measures an insurance contract using a general accounting model or a simplified version called the premium allocation approach.

The main features of the general model are:

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Under the premium allocation approach, an entity measures the liability for the remaining coverage of a group of insurance contracts on the condition that, at initial recognition, the entity reasonably expects that this will be an approximation of the general model. Contracts with a coverage period of one year or less are automatically eligible for PAA. The simplifications arising from PAA do not apply to the measurement of the liability for incurred claims, measured under the general model. However, there is no need to discount those cash flows if the balance is expected to be paid or received in one year or less from the date the claims are incurred.

An entity shall apply the new standard to issued insurance contracts, including reinsurance contracts issued, reinsurance contracts held and also to investment contracts with a discretionary participation feature (DPF).

The standard is effective for annual periods beginning on or after 1 January 2023. Early application is permitted only for entities that apply IFRS 9 Financial instruments and IFRS 15 Revenue from contracts with customers.

The directors do not expect the adoption of this standard to have a significant effect on the group’s consolidated financial statements as at 31 December 2022.

On 9 December 2021, the IASB published “Amendments to IFRS 17 Insurance contracts: Initial application of IFRS 17 and IFRS 9 – Comparative information”. The amendment is a transition option relating to comparative information about financial assets presented on initial application of IFRS 17. The amendment is aimed at helping entities to avoid temporary accounting mismatches between financial assets and insurance contract liabilities, and therefore improve the usefulness of comparative information for users of financial statements. IFRS 17 incorporating the amendment is effective for annual reporting periods beginning on or after 1 January 2023.

On 12 February 2021, the IASB published “Disclosure of accounting policies—Amendments to IAS 1 and IFRS Practice statement 2” and “Definition of accounting estimates—Amendments to IAS 8”. These amendments will help companies improve accounting policy disclosures so that they provide more useful information to investors and other primary users of the financial statements and distinguish changes in accounting estimates from changes in accounting policies. The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and early adoption is permitted.

On 7 May 2021, the IASB published “Amendments to IAS 12 Income taxes: Deferred tax related to assets and liabilities arising from a single transaction” which clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and early adoption is permitted.

Limacorporate S.p.A. did not opt for early adoption of these standards.

Other standards, amendments and interpretations

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The group will adopt such new standards and amendments, on the basis of the relevant application date, and will assess the potential impacts on the consolidated financial statements as at 31 December 2022 when they are endorsed by IASB.

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[3] Notes to the consolidated financial statements as at 31 December 2022

Below are comments on the statement of financial position captions as at 31 December 2022. For details on statement of financial position captions deriving from related party transactions, reference should be made to note [4.6] Related party transactions.

[3.1] Other intangible assets

Other intangible assets at 31 December 2022 amount to €58,234 thousand, up €4,639 thousand on the previous year end (€53,595 thousand). Changes in other intangible assets in 2021 and 2022 and a breakdown of historical cost, accumulated amortisation and any cumulative impairment losses are summarised in the following tables.