Due to the derecognition in 2004 of expense items that had been recognized exclusively for tax purposes and of entries made in connection with divestitures and depreciation and amortization recognized in 2005, the remaining tax items that still need to be derecognized at December 31, 2005, net of the corresponding deferred taxes, amount to 34.3 million euros. Consequently, if retained earnings or reserves were to be distributed, the Company will have to retain an equal amount of reserves that are relevant for the purposes of Article 109 of the TUIR. Should relevant reserves be unavailable or insufficient, the difference will be treated as taxable income to the company, increased by the amount of the applicable deferred taxes.
Moreover, the reform of the corporate income tax (IRES), which went into effect on January 1, 2004, introduced the overall presumption whereby the net income for the fiscal year and any portion of the reserves (other than capital stock reserves) that has not been set aside in a deferred-taxation status will be deemed to have been distributed, irrespective of the provisions of the applicable resolution approved by the Shareholders' Meeting (Article 47 of the TUIR).
Milan, February 21, 2006
The Board of Directors
by Giuliano Zuccoli
Publicly Traded Securities – Comparison of Year-End Carrying Value and Market Value
at December 31, 2005
    Currency Total Par Number Carrying value   Market value (*)
      par value of shares (in euros)     (in euros)  
      value per unit held per unit total per unit   total
B.III) Financial fixed assets                  
1) Equity investments in:
d) Other Companies
RCS Mediagroup Spa EUR 7,406,487.00 1.00 7,406,487 1.406 10,411,646.01 4.021 29,781,484.23
            10,411,646.01   29,781,484.23
C.III) Financial assets not held as fixed assets
4) Other equity investments
ACEA Spa EUR 1,911,522.00 5.16 370,450 8.403 3,112,891.35 8.403 3,112,891.35
ACEGAS - APS Spa EUR 3,673,920.00 5.16 712,000 7.699 5,481,688.00 7.699 5,481,688.00
ACSM Spa EUR 1,488,000.00 1.00 1,488,000 2.150 3,199,200.00 2.150 3,199,200.00
American Superconductor Corp. USD 160,000.00 1.00 160,000 6.671 1,067,360.00 6.671 1,067,360.00
AMGA Spa EUR 5,085,756.00 0.52 9,780,300 1.651 16,147,275.16 1.651 16,147,275.16
            29,008,414.51   29,008,414.51
(*) Market value means the stock market price on December 30, 2005 published in Il Sole 24 Ore on December 31, 2005.