Relations with the holding company, its subsidiaries and other related parties

The Benetton Group has trade dealings with Edizione S.r.l. (the holding 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, in compliance with the Group Procedure for related party transactions. The total value of such transactions was nonetheless not significant in relation to the total value of the Group's production. These transactions mostly relate to the purchase and sale of goods and services. The Group's Italian companies have elected to file for tax on a group basis for the three-year period 2007-2009, as allowed by articles 117 et seq. of the Tax Consolidation Act DPR 917 dated 22 December 1986, with Edizione S.r.l. acting as the head of the tax group.

The relationships arising from participation in the above tax group are governed by specific rules, approved and signed by all participating companies.

The related details are shown below:

(*) Of which Euro 10,768 thousand in advertising and promotion costs, corresponding to 20.5% of total advertising costs in 2009 (Euro 10,530 thousand in 2008).

Transactions have also taken place between companies directly or indirectly controlled by the Parent Company or between such companies and the Parent Company itself. The Parent Company's management considers that such transactions have been conducted on an arm's-length basis. In particular, it is reported that a transaction was completed during the months of October and November – approved by the Board of Directors of Benetton Group S.p.A. in accordance with the Group Procedure for related party transactions – which involved selling Fondazione Benetton four commercial properties owned by the subsidiaries Bencom S.r.l. (one property) and S.I.G.I. S.r.l. (three properties). Four Benetton megastores were run and continue to be run out of each of the properties sold, which are located in Avellino , Biella , Caltanissetta and Catania respectively.

The transaction also involved making new leases between Fondazione Benetton, the new owner, and Bencom S.r.l., the tenant.

In compliance with the Group Procedure for related party transactions, two appraisals were performed for each property by leading international firms in this sector. The total sale price of Euro 17,250 thousand plus VAT reflects the average values reported in these appraisals. The transaction generated an overall capital gain of Euro 6,412 thousand, as well as additional financial resources for commercial development, while also allowing the Group to retain long-term control, under basically the same terms and conditions, over the stores located in the properties sold.

No Director, manager, or shareholder is a debtor of the Group.