185000000 IT Holding Finance SA

IT HOLDING S.p.A. Notes to the consolidated financial statements for the year ended December 31, 2004
assessment have been received for the years 1995 and 1996 against which an appeal has been filed with the
relevant judicial authorities.
In 2001, a further preliminary assessment report was served for the years 1998, 1999 and 2000 relating to
irregularities of the same nature as in the previous years, with reference to which no notices of assessment have to
date been issued. The provision represents the management’s estimate of the maximum potential liability expected
to arise having taken into account the opinion of external consultants.
Other provisions include Euro 2,024 thousand (2003: Euro 2,010 thousand) which represent the probable liabilities
estimated to arise from litigation currently in progress and from early termination of certain contracts.
In the prior year financial statements, other long-term liabilities at December 31, 2003 were stated at Euro 14,315
thousand. In the current year financial statements other long-term liabilities at December 31, 2003 amount to Euro
18,102 thousand. The difference of Euro 3,787 thousand is due to the following reclassifications:
• Euro 6,789 thousand having previously been classified as other current liabilities, being Euro 3,301
thousand due to social security agencies and Euro 3,488 being other liabilities, both of a long-term nature;
• Euro 3,002 thousand reclassified in other current liabilities, being the provision for returns on sales which
is of a short-term nature.
(26) Shareholders’ Equity
At December 31, 2004, the share capital is fully subscribed and paid up and comprises 245,874,000 ordinary shares
with a nominal value of Euro 0.05 each.
Own shares have been deducted from share capital and share premium as follows:
Number Share Share Total
(In thousands of Euros) capital premium
December 1, 2003 41,900 2 100 102
December 31, 2003 57,702 3 126 129
December 31, 2004 6,462 - 14 14
(27) Earnings per share
Basic earnings per share
The calculation of basic Earnings per share at December 31, 2004 was based on the net loss attributable to ordinary
shareholders of Euro 12,581 thousand (2003: net loss of 62,708 thousand) and a weighted average number of
ordinary shares outstanding during the year ended December 31, 2004 of 245,854,658 (2003: 245,817,716). Basic
Earnings per share at December 31, 2004 amounts to a loss per share of Euro 0.05 (2003: loss per share Euro
0.26).
Diluted earnings per share
There are no dilutive potential ordinary shares hence diluted earnings per share are equivalent to basic earnings per
share.
(28) Financial instruments
Financial risk management
The Group’s activities expose it to a variety of financial risks, being primarily credit risk, interest rate risk and
foreign currency risk. The following describes Group policies for the management of financial risk.
Credit risk
The Group has a credit policy in place to ensure that wholesale sales are made to customers with an appropriate
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