Tiscali 2003 Annual Report Download - page 68

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7070
Analysis of Balance sheet items
ASSETS
(EUR/000)
A) Capital contributions due from shareholders
There are no receivables due from shareholders in respect of unpaid capital contributions.
B) Non-current assets
I – Intangible assets
Changes in intangible assets are shown below:
The “start-up and expansion costs” line relates to the parent Company Tiscali S.p.A. and includes the long-term cost of capital
increases and start-up costs. Start-up costs, which accrued mainly in 1999, include the cost of starting the network roll-out pro-
cess (installation and data centre activation) and of the launch campaign for the TiscaliFreenet Internet access service.
“Research, development and advertising costs” include capitalised advertising costs of around EUR 18.8 million before amorti-
sation. These costs are amortised on a straight-line basis over the year in which they are incurred and in the following year; after
amortisation, advertising and promotional costs were EUR 9 million. The reason for capitalising these costs is that they relate to
specific advertising campaigns for the launch of new broadband services, which are expected to generate significant revenues for
the foreseeable future, as indicated by the results achieved in the second half of 2003 and the first few months of 2004.
The increase in “industrial property rights and intellectual property rights” relates to the acquisition of patents for the develop-
ment of innovative value-added services relating to the launch of new dial-up and broadband ISP services. Specifically, EUR 5
million was invested by the parent Company, EUR 4 million by Liberty Surf and EUR 1 million by the South African subsidiary.
“Concessions, licences, trademarks and similar rights” included investments in software and installation costs of EUR 47 million,
and EUR 112.3 million for the rights of subsidiary Tiscali International Network BV and its directly-owned subsidiary Tiscali
International Network S.A. to purchase transmission capacity on a multi-year basis (IRUs). The increase of around EUR 28 mil-
lion versus the previous year relates to new IRUs contracts (EUR 12.5 million), the purchase of software licences for the mana-
gement of the new technology platform (access systems and network management) and the introduction of billing and admini-
stration systems. These increases relate to Group IT systems (EUR 5 million), investments made by Liberty Surf (EUR 3.2 mil-
lion) and Tiscali International Network (EUR 1 million).
“Other” mainly includes upgrade costs on third-party assets, which are amortised on a straight-line basis over the remaining term
of the lease or the useful life of the asset.
INTANGIBLE ASSETS 31.12.2002 INCREASES OTHER CHANGES DEPRECIATION 31.12.2003
Start-up and expansion costs 5,281 886 - (3,565) 2,602
Research, development and advertising costs 38,000 18,779 (38,847) (8,945) 8,987
Industrial patent rights and intellectual property rights 3,686 14,084 28,883 (18,458) 28,195
Concessions, licenses, trademarks and similar rights 141,933 27,868 14,467 (24,910) 159,358
Goodwill 160 90 - (42) 208
Payments on account and intangible assets
in course of acquisition 6,161 321 (4,503) - 1,979
Other 13,005 1,402 - (3,741) 10,666
Consolidation difference 540,987 34,520 464 (72,063) 503,908
Total 749,213 97,950 464 (131,724) 715,903