The Benetton Group has limited trade dealings with Edizione Holding S.p.A. (the Parent Company), with subsidiary companies of the same and with other parties which, directly or indirectly, are linked by common interests with the majority shareholder. Trading relations with such parties are conducted on an arm’s-length basis and using the utmost transparency.
These transactions relate mostly to purchases of tax credits and services.
In addition, Italian Group companies have made a group tax election under Article 117 et seq. of the Tax Consolidation Act DPR 917/86, based on a proposal by the consolidating parent company Edizione Holding S.p.A., which decided to opt for this type of tax treatment on December 30, 2004. The election lasts for three years starting from the 2004 fiscal year. The relationships arising from participation in the group tax election are governed by specific rules, approved and signed by all participating companies.
The related details are shown below:
| (thousands of euro) | 12.31.2005 | 12.31.2004 |
|---|---|---|
| Receivables | 40,959 | 32,864 |
| - of which related to fiscal consolidation with Edizione Holding S.p.A. | 39,567 | 32,283 |
| Payables | 39,110 | 19,825 |
| - of which related to fiscal consolidation with Edizione Holding S.p.A. | 37,466 | 18,664 |
| Purchase of raw materials | 1,773 | 2,982 |
| Purchase of assets | 2,800 | - |
| Other costs and services | 14,832 | 13,229 |
| Product sales | - | 17 |
| Rendering of services and other income | 641 | 937 |
The Group has also undertaken some transactions with companies directly or indirectly controlled by, (or in any case) or under the influence of, managers serving within the Group. The Parent Company’s management believes that such transactions were completed at going market rates. The total value of such transactions was not, in any case, significant in relation to the total value of the Group’s production. No director, manager, or shareholder is a debtor of the Group.