185000000 IT Holding Finance SA

compensation for damages. Our agreement with the purchaser of our shares in Gigli S.p.A. requires us to
indemnify such purchaser against all liabilities arising in relation to this specific pending litigation. However, we
believe that an unfavorable outcome appears unlikely.
In January 2004, an attorney brought an action against IT Holding S.p.A., Ittierre S.p.A. and Diners Club Italia
S.p.A., claiming fees of €3.3 million for legal work in connection with the drafting of certain financial agreements
among these three companies. IT Holding S.p.A. and Ittierre S.p.A. deny having engaged the claimant or that any
fees, if any, would exceed €25,000. We believe that this claim is unfounded and that an unfavorable outcome
appears unlikely.
In August 2002, Mr. Luigi Giribaldi asked the Tribunal of Isernia to reexamine the two third-party appraisals
conducted in connection with the acquisition by IT Holding S.p.A. of Gianfranco Ferré S.p.A. on the basis that
such appraisals were not conducted by independent third-party appraisers. We believe that Mr. Giribaldi’s claims
are unfounded. A decision by the Tribunal of Isernia is expected during the first half of 2005.
We have been informed of an action before the Tribunal of Milan that Mr. Luigi Giribaldi brought against PA
Investments in December 2001 in which Mr. Giribaldi has requested enforcement of an oral contract with PA
Investments whereby PA Investments agreed to acquire Mr. Giribaldi’s entire shareholding in IT Holding S.p.A.
PA Investments has denied the existence of any such oral agreement with Mr. Giribaldi. It should be noted that IT
Holding S.p.A. is not a party to this dispute and in any event benefits from an indemnity granted to us by PA
Investments. Therefore, we believe that this matter does not give rise to any risk of financial liabilities for us.
In October 2004, we disposed of Allison S.p.A. At the time of this disposal, an action was pending against Allison
in the arbitral court of Treviso brought by a supplier who alleged that Allison had breached the terms of a supply
agreement and claimed damages in the amount of approximately €7.0 million. The arbitral court in a preliminary
award rejected Allison’s claims that the supply agreement was void. A final arbitral award will be issued by
August 31, 2005. In connection with our sale and purchase agreement, we agreed to indemnify the purchaser
against any losses arising from outstanding litigation (including this arbitral proceeding).
In August 2004, certain companies, including IT Holding S.p.A. and Servizi Moda S.r.l., were served a petition for
urgent relief put forth by Mr. Romeo Gigli and Romeo Gigli s.a.s. Mr. Gigli claims that he is owed at least €41.0
million on account of future amounts receivable, damages for alleged breach of contract, and fees accrued and not
received. Accordingly, he requested the Tribunal of Milan to order provisional remedies to protect his current and
future claims with respect to all companies involved, including IT Holding S.p.A. and Servizi Moda S.r.l. On
September 8, 2004, the Tribunal of Milan rejected all the requests made by the petitioners. The petitioners
appealed this decision and on December 13, 2004, the Tribunal of Milan denied this appeal. In January 2005 Mr.
Gigli and Romeo Gigli s.a.s commenced a proceeding on the merits against IT Holding S.p.A. before the Tribunal
of Milan, asking for damages in the amount of approximately €47.0 million in connection with essentially the same
claims described above. The first hearing in this case has been scheduled for May 17, 2005.
Tecnostile S.r.l., a company based in Florence, has brought an action against Gianfranco Ferré S.p.A. claiming
damages of approximately €620,000 in respect of alleged pre-contractual obligations. Evidence has been gathered
and the next hearing has been scheduled for June 2005. We believe that it is unlikely that this dispute will give rise
to a liability for the defendant.
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