185000000 IT Holding Finance SA

IT HOLDING S.p.A. Notes to the consolidated financial statements for the year ended December 31, 2003
The following is a summary of the significant accounting policies used by the Group to prepare the financial
statements in accordance with IFRS.
Basis of preparation
The financial statements are presented in euro, rounded to the nearest thousand.
The consolidated financial statements have been prepared under the historical cost convention except as disclosed in
the accounting principles below.
The accounting policies set out below have been applied consistently to all periods presented in these consolidated
financial statements.
The accounting policies have been applied consistently by Group entities.
Principles of consolidation
Subsidiaries are those entities controlled by the Company. Control exists when the Company has the power, directly
or indirectly, to govern the financial statements and operating policies of an entity so as obtain benefits from its
activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into
account. The financial statements of subsidiaries are included in the consolidated financial statements from the date
that control commences until the date that control ceases.
There are no "Associates" or "Jointly Controlled Entities" consolidated as at January 1, 2002, December 31, 2002 and
December 31, 2003.
The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of acquisition is
measured at the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus
costs directly attributable to the acquisition. The excess of cost of acquisition over the fair value of the net assets and
liabilities of the subsidiary acquired is recorded as goodwill.
The assets and liabilities and statement of income captions of consolidated companies are included on a line-by-line
basis by eliminating the book value of the related investments against Group’s share of equity of the subsidiaries at
the moment of their acquisition.
The portion of net asset and net income attributable to third parties is stated separately as minority interests.
All significant intragroup balances, transactions and unrealized profits and losses are eliminated.
Foreign currency
Foreign currency transactions
Foreign currency transactions are translated into Euro using the exchange rates prevailing at the dates of transactions.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into Euro at
the exchange rate ruling at that date.
Foreign exchange differences arising on the settlement of such transactions and on the translation are recognized in
the income statement, except when deferred in equity as qualifying cash flow hedges.
Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated into
Euro at exchange rates ruling at the dates the values were determined.
Financial statements of foreign operations
The Group’s foreign operations are not considered an integral part of the Company’s operations. Accordingly,
financial statements of foreign companies are translated into Euro as follows:
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