185000000 IT Holding Finance SA

IT HOLDING S.p.A. Notes to the consolidated financial statements for the year ended December 31, 2003
(in thousands of euro)
Share Share Translation Hedging Legal Retained Other Net income Total
capital premium reserve reserve reserve earnings reserve (loss)
Balance at 1 January 2002 9,972 26,264 2,303 6 2,467 37,672 35,949 (1,943) 112,690
Allocation of net income 160 (2,423) 320 1,943 0
Recognised gain and loss (167) (167)
Movement in treasury shares 33 2,943 2,976
Translation difference (2,527) (2,527)
Capital increase 2,287 107,499 109,786
Other changes 14 14
Net income (loss) of the year 42 42
Balance at December 2002 12,292 136,706 (224) (161) 2,627 35,249 36,283 42 222,814
Balance at 1 January 2003 12,292 136,706 (224) (161) 2,627 35,249 36,283 42 222,814
Allocation of net income 42 (42) 0
Recognised gain and loss (119) (119)
Movement in treasury shares (1) (32) (33)
Translation difference (2,286) (2,286)
Net income (loss) of the year (62,708) (62,708)
Balance at December 2003 12,291 136,674 (2,510) (280) 2,627 35,291 36,283 (62,708) 157,668
Treasury shares have been deducted from share capital and share premium as follows:
(in thousands of euro)
F- 79
Number Share Share Total
capital premium
December 1, 2002 696,500 35 2,691 2,726
December 31, 2002 41,900 2 100 102
December 31, 2003 57,702 3 126 129
The translation reserve comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations that are not integral to the operation of the Company.
27. Earnings per share
Basic earnings per share
The calculation of basic Earnings per share at December 31, 2003 was based on the net loss attributable to ordinary
shareholders of €62,708 thousand (2002: net income of €42 thousand) and a weighted average number of ordinary
shares outstanding during the year ended December 31, 2003 of 245,817,716 (2002: 221,016,059). Basic Earnings per
share at December 31, 2003 is equal to negative amount of €0.26 (2002: positive amount €0.00).
28. Financial instruments
Exposure to credit, interest rate and currency risk arises in the normal course of the Group’s business. Derivative
financial instruments are used to hedge exposure to fluctuation in foreign exchange rates and interest rates.
Credit risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Receivables
form a core component of monthly reporting and are analyzed with respect to aging structure and seasonality on a
regular basis to avoid unforeseen adjustments for loan provisions.
Credit evaluation is performed individually for loans that are individually significant ("bad loans") and collectively
for financial assets that are not individually significant.
The provision for doubtful receivables has been estimated on the basis of available data and in general on the basis of
historical data by writing down 0.5% of outstanding trade receivables.
When using financial derivatives, IT Holding is exposed to the risk that the counterparty may default. The risk that the
counterparties will not honor their commitments is limited, since such contracts were signed with leading financial
operators. Therefore the company does not expect any risk of insolvency.