Tiscali 2001 Annual Report Download - page 126

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118
Line item "Start-up and expansion costs" - which mainly accrued in 1999, includes the
costs for starting network implementation activities (installation and switchboard
activation) as well as the "Tiscali Freenet" launching campaign.
The increase during the FY of EUR 1.4mn is the result of the costs borne in relation to the
growth of Company capital connected with the indirect acquisition of the English Company
Springboard Internet Services Ltd.
Decrements are due to the normal process of amortization.
The line item "Industrial patent rights and utilization of intellectual property rights"
includes mainly the applicational software acquired for an unlimited period and
personalized for the exclusive use of the Company. The increment occurring during this
period derives mainly from the development of existing software packages and the
purchase of software for use in the development of new portal services.
The variation in the asset item "Concessions, licences, trademarks, other" consists mainly
of the purchase of software licences and associated costs. In particular, investments refer
to management software for access systems and the management of network services,
mainly for the management of the banners, for the management of the "voice over IP"
service and for the search engine.
The line item "Payments on account and intangible assets in course of acquisition" covers
mainly, for the amount of about EUR 11mn, costs associated with licenses and the
development of software and other services acquired in the framework of the unification
project of the technological and management platform of the services provided by the
Group, still under way; for this reason amortization has been suspended. As regards this
project, capitalization has been effected of costs covering internal personnel working on
project implementation in the amount of EUR 0.8mn, by means of posting of an equal
amount in line item A4 of the profit & loss account. This investment affects the whole
Group.
Another important project which has involved the Company during the FY, classified under
the heading of assets in course of acquisition, is the Mobile Internet (about EUR 1.7mn)
covering the offer of an Internet connecting service via mobile phone. Activation is planned
for the first half of 2002.
Decrements ("Other changes") of about EUR 4mn refer to the allocation of projects
concluded and posted under amortization during the FY (EUR 1.6mn in the line item
"Patent rights and intellectual property rights", 2mn in line item "Concessions, licences,
trade marks and similar" and 0.6mn under other assets).
The line item "Start-up and expansion costs" includes:
12.31.2001 12.31.2000 BALANCE
Start-up and expansion costs
Company incorporation costs 1 (1)
Capital increase expenses 5,203 5,579 (376)
Start-up costs 3,989 6,653 (2,664)
Other 397 397
Total 9,589 12,233 (2,643)