185000000 IT Holding Finance SA

IT HOLDING S.p.A. Notes to the consolidated financial statements for the year ended December 31, 2002
In 2001, a preliminary assessment report was served for 1998, 1999, and 2000, relating to the same irregularities
found in previous years. No notices of assessment have been issued to date.
The acquisition contract for M.A.C.—Manifatture Associate Cashmere S.p.A. (formerly FINCASHMERE S.p.A.)
and subsequent integrations provides that the sellers are liable for tax contingencies pertaining to years up to 1998 and
for a maximum amount of Euro 4,390 thousand, with an excess clause of Euro 2,324 thousand. On October 30, 2003,
an agreement was signed with the sellers on the basis of which they terminate the above guarantee and pay M.A.C.—
Manifatture Associate Cashmere S.p.A. Euro 300 thousand. The company adjusted the provision by this amount, and
thus a total of Euro 3,046 thousand, which reflects the maximum potential tax risk on the basis of updated estimates
made, including the opinions expressed by external consultants. — GIANFRANCO FERRÉ S.p.A.
In 2000, a preliminary assessment report was served, disputing certain irregularities in form and substance relating to
1998, 1999, and the period up to May 31, 2000 for IRPEG and VAT tax purposes and relating to 1998 and 1999 for
IRAP purposes. Two years later, the company received a notice of assessment relating to 1997 for VAT purposes. In
2003, the company settled this potential litigation, pursuant to article 15, of Law no. 289/2002.
In 2004, the company decided to settle the irregularities noted by reaching an agreement on the potential dispute
pursuant to article 15, of Law no. 289/2002. The cost of settlement of Euro 240 thousand was fully covered by the tax
provision. — IT HOLDING S.p.A.
During the year, the company received an assessment from the Molise tax authorities. A loss of approximately Euro
150,000 could arise from the assessment, which will be settled for approximately Euro 37,000, by filing a
supplementary tax return in accordance with article 8 of Law no 289/2002. — ITTIERRE S.p.A.
The tax provision of ITTIERRE S.p.A., amounting to Euro 205 thousand, relates to the following tax disputes.
In 2003, disputes relating to direct taxes and VAT for 1995 and 1996 were settled in accordance with 16 of Law
no. 289/2002 (“settlement of pending disputes”).
In 2001, the tax police performed an inspection leading to three preliminary assessment reports alleging VAT
irregularities in form and substance in 1997, 1998, 1999, and 2000 up to February 22. Only 1997 was assessed and
was subsequently settled in 2003 as a “potential dispute” in application of article 15 of Law no. 289/2002. No other
notices of assessment have been issued to date. The estimated potential tax liability should not significantly impact the
company’s financial position and results is not expected to exceed the amount accrued at year end 2003. — ITJ S.p.A.
(merged into ITTIERRE S.p.A. in 2002)
In 2000, this company received a preliminary assessment report from the Regional Tax Office of Campobasso
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. No notice of assessment has been received for 1998.
During 2002, following inspections performed by the Customs Authority of Campobasso, the company was served
preliminary assessment reports in which certain irregularities were contested in relation to sales of assets in EU and
non-EU countries. The company settled these as a “potential dispute” under article 15 of Law no. 289/2002. — FD
S.p.A. (merged into ITJ S.p.A. in 2001)
In 2002, the company received a preliminary assessment report from the Regional Tax Office of Campobasso alleging
certain irregularities in terms of form and substance with regard to direct and indirect taxes in 1999 and 2000. The
company has not received any notices of assessment.
The estimated potential tax liability should not significantly impact the company’s financial position and results and
should not exceed the amount accrued at year end 2003. — ITTIERRE FRANCE S.A.
F- 123