185000000 IT Holding Finance SA

IT HOLDING S.p.A. Notes to the consolidated financial statements for the year ended December 31, 2003
Direct taxes include payable for current taxes net of advance payments and tax receivables which can be used to offset
amount due.
23. Other current liabilities
Other current liabilities at December 31, 2003 and 2002 can be analyzed as follows:
12/31/2003 12/31/2002 Increase
(In thousands of Euros)
(decrease)
Due to factors 25,184
12,901
12,283
Due to social security agencies 6,454
2,858
3,596
Remuneration to be paid 6,583
5,962
621
Remuneration to the Board of Directors 1,231
896
335
Remuneration to the Board of Statutory Auditors 409
305
104
Other parties 9,544
7,450
2,094
Other current liabilities and accrued expenses 57,742
50,612
7,130
Total 107,147
Payables to factors relate to the amount due to the factoring companies to which Group suppliers have sold their
receivables due from the Group.
Remuneration to be paid includes, inter alia, accruals by employees but not yet paid at year end.
Other parties mainly comprises credit notes to be issued, payables for year-end achievement awards to customers, and
amounts due for charges incurred to recover the full availability of the Romeo Gigli brand in the perfume division.
Other current liabilities are comprised mainly of negative market values in financial derivatives totaling
€34,452 thousand (2002: €21,856 thousand) and accrued royalties in the amount of €10,210 thousand (2002:
€11,085 thousand).
24. Employee benefits: pension liabilities and severance indemnities
Pension liabilities and severance indemnities at December 31, 2003 and 2002 mainly relate to Italian staff leaving
indemnity (so called TFR), which is paid to all employees on termination of their employment.
Each year the Group accrues for each employee an amount partly based on the employee’s remuneration and partly
based on the revaluation of the amounts previously accrued. The indemnity is an unfunded but fully provided liability.
The liability is based on an actuarial valuation based on the assessment of the relevant parameters, which were as
follows:
Liability for defined benefit obligations
Principal actuarial assumptions at the balance sheet date 2003 2002
Projected future remuneration increases 2% 2%
Projected future employee turnover 8.8-16.6% 7.1-18.2%
The discount rate used is the swap rate curve.
Movements in the net liability
(In thousands of Euros) 2003 2002
Net liability at 1 January 13,603 11,283
Accruals 3,939 4,015
Utilizations (2,823) (2,592)
Other movements (changes in the consolidation area) 22 897
Net liability at 31 December 14,741 13,603
F- 74
80,984
26,163