185000000 IT Holding Finance SA

IT HOLDING S.p.A. Notes to the consolidated financial statements for the year ended December 31, 2004
been issued with reference to this last preliminary assessment.
ITJ S.p.A. (merged into ITTIERRE S.p.A. in 2002)
In 2000, this company received from the Regional Tax Office of Campobasso, a preliminary assessment report
relating to the 1997 and 1998 tax periods. The irregularities assessed for 1997 were settled in 2003, as a "potential
dispute" under article 15 of Law no. 289/2002. In the year 2004 a notice of assessment for the year 1998 was
received, against which the company has lodged an appeal with the relevant judicial authorities.
FD S.p.A. (merged into ITJ S.p.A. in 2001)
With reference to the preliminary assessment report received from the Regional Tax Office of Campobasso
alleging irregularities in terms of form and substance with regard to direct and indirect taxes for the years 1999 and
2000, the company has received a notice of assessment for the year 1999 against which it has lodged an appeal with
the relevant judicial authorities.
The maximum potential tax liability that could arise is estimated to be Euro 2.4 million, however Management,
having heard the opinion of its tax advisors, does not believe it probable that this liability will arise.
Other pending litigation
• On March 23, 1998, Trussardi S.p.A. ("Trussardi") summoned ITTIERRE S.p.A. ("ITTIERRE") before the
Milan Court, claiming that ITTIERRE had breached a license agreement for the “Trussardi Jeans” brand which
expired on June 30, 1996. Trussardi requested a reward for damages from ITTIERRE S.p.A. of approximately
Euro 50 million. ITTIERRE S.p.A. appeared in court denying it had ever breached the agreement and asked
that the claim be fully dismissed. In December 2004, the Tribunal of Milan decided in favour of Trussardi and
ordered ITTIERRE S.p.A. to pay damages of Euro 8.3 million plus interest and court costs. ITTIERRE S.p.A.
has appealed this decision and on February 22, 2005 obtained an injunction suspending payment of these
amounts. Any amount awarded to Trussardi in final judgement would fall within the scope of an indemnity
granted to the Group by PA Investments which agrees to hold the Group harmless against all liabilities and
costs associated with all litigation, arbitration and regulatory proceedings instituted prior to April 28, 2002 and
arising from events that took place prior to December 31, 1996.
• On June 20, 2000, Casor S.p.A. (“Casor”) summoned MAC S.p.A. (MAC), the predecessor of MALO S.p.A.
("MALO") before the Florence Court, claiming that MAC had breached the five-year license agreement signed
between the two companies and that it pay damages amounting to approximately Euro 3.6 million. The
management of MALO S.p.A., having heard their legal advisors, believe the complaint to be unsubstantiated as
they claim never to have entered into a 5 year licence agreement with Casor and hence believe it unlikely that
the dispute will result in adverse judgement.
• A professional previously engaged by MALO S.p.A. for assistance in the creation of certain sales spaces,
summoned MALO S.p.A., before the Rome Court, claiming it had reproduced his innovative design concept in
other sales spaces without respecting the exclusive rights to it and asking the Court to award damages of Euro
462 thousand. MALO S.p.A. appeared and disputed the requests on the grounds of inadmissibility and lack of
grounds. It also included the architectural firm engaged to create the spaces under dispute as a party to the
proceedings. Management believes it unlikely that the dispute will result in adverse judgement.
• Tecnostile S.r.l., a company based in Florence, summoned GIANFRANCO FERRÉ S.p.A., claiming damages
amounting to Euro 620 thousand, arising from pre-contractual obligations. Evidence has been gathered and the
next hearing is scheduled in June 2005, for conclusions to be presented. Management believe it unlikely that
the dispute will give rise to a liability for the company.
• In December 2003 Damap S.r.l. brought two separate actions against ITTIERRE S.p.A. and two separate
licensors of ITTIERRE S.p.A. for damages allegedly deriving from the breach of a patent on the decorative
model of a specific denim processing used for apparel produced and marketed by ITTIERRE S.p.A. The
amount of the claim is equal to Euro 3 million. Management believes the claim to be unfounded and that an
unfavourable outcome appears unlikely. ITTIERRE S.p.A. has also brought a cross-claim against the
manufacturer of the denim fabric in question.
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