185000000 IT Holding Finance SA

IT HOLDING S.p.A. Notes to the consolidated financial statements for the year ended December 31, 2004
from GIGLI S.p.A., a subsidiary disposed of during the year, and Euro 603 thousand being the loss incurred upon
the partial repurchase of the “Ferré Finance 7% 05/05” bond following the voluntary public tender offer opened on
December 10, 2004 and closed on January 11, 2005 (see note 9 – significant events after the balance sheet date).
Other charges for the year 2003 include charges amounting to Euro 3,584 thousand incurred in connection with the
factoring without recourse programme in being prior to the securitization programme commenced in July 2003.
(7) Discontinued operations
In pursuit of its strategy to re-focus on its profitable core business the Group disposed of its fragrance and eyewear
operations during the course of the year ended 31 December 2004.
Fragrance business
On March 25, 2004, the Group finalised an agreement for the sale of its fragrance business by selling its 90% share
holding in IBEX 2001 S.p.A to I.C.R. - Industrie Cosmetiche Riunite S.p.A., owned by Mr. Roberto Martone. At
the time of the sale IBEX 2001 S.p.A. had an 80% share holding in ITF S.p.A. (the remaining 20% being held by
the same Mr. Martone), a company constituted in September 2001 to develop and distribute fragrances and
cosmetics under brands licensed by the IT HOLDING Group and other third parties. At the time of the sale, ITF
S.p.A. had 25-year license agreements with certain IT HOLDING Group companies. Control of IBEX 2001 S.p.A.
was passed to the acquirer on 1 January 2004.
The results of the fragrance business included in the consolidated income statement for the year 2003 were as
follows:
(In thousands of Euros)
Year ended December
31, 2003
Net revenues 25,569
Operating costs (27,786)
Operating result (2,217)
Financial income (charges) (879)
Income (loss) before taxes (3,096)
Income taxes 937
Net income (loss) before minority interest (2,159)
Minority interest (575)
Net income (loss) for the period (1,584)
The fragrance business did not impact operating results for the year 2004. However, a gain of Euro 25,751
thousand arose on the disposal of IBEX 2001 S.p.A. being the proceeds of disposal, net of related expenses, less
the carrying amount of the net assets of the fragrance business at January 1, 2004 attributable to the shareholders of
the Company. The realized gain is not taxable.
The cash flows attributable to the fragrance business for the year 2003 were as follows:
(In thousands of Euros)
Year ended December
31, 2003
Operating cash flows (467)
Investing cash flows (2,759)
Financing cash flows 2,986
Total cash flows (240)
Total assets and total liabilities attributable to the fragrance business at December 31, 2003 were as follows:
(In thousands of Euros)
Year ended December
31, 2003
Total assets 34,431
Total liabilities 35,641
Net (1,210)
F- 25