185000000 IT Holding Finance SA

IT HOLDING S.p.A. Notes to the consolidated financial statements for the year ended December 31, 2004
(23) Other current liabilities
Other current liabilities can be analyzed as follows:
(In thousands of Euros) 12/31/2004 12/31/2003
Due to social security agencies 3,442
3,153
Remuneration to be paid 5,797
6,583
Remuneration to the Board of Directors 857
1,231
Remuneration to the Board of Statutory Auditors 437
409
Derivative financial liabilities see note 28 26,951
34,452
Provision for returns on sales 2,287
3,002
Others 21,277
19,136
Total 61,048
Remuneration to be paid includes, inter alia, accruals by employees but not yet paid at year end.
The provision for returns on sales estimates unrealised profits arising from the difference between the original sales
value and net realisable value of returns estimated to be received after the balance sheet date but pertaining to sales
already recorded. The provision is estimated on the basis of known reasons for returns on specific products and
historical trends.
The following table shows the movements in the provision for returns on sale:
(In thousands of Euros)
Provision for returns
on sales
At January 1, 2004
Charged to consolidated income statement:
3,002
- Additional provisions 2,287
Used during year (2,746)
Disposal of subsidiaries (256)
At December 31, 2004 2,287
In the prior year financial statements other current liabilities at December 31, 2003 were stated as Euro 107,147
thousand. In the current year financial statements, other current liabilities amount to Euro 67,966 thousand. The
difference of Euro 39,181 thousand is due to the following reclassifications:
• Euro 35,394 thousand reclassified in trade payables, being accrued royalties (Euro 10,210 thousand) and
payables due to factors (Euro 25,184 thousand);
• Euro 6,789 thousand reclassified in other long-term liabilities, being amounts due after 1 year;
• Euro 3,002 thousand reclassified from other long-term liabilities being the provision for returns on sales which
is of a short-term nature.
(24) Employee benefits: pension liabilities and severance indemnities
Pension liabilities and severance indemnities at December 31, 2004 and 2003 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:
F- 37
67,966