Tiscali 2003 Annual Report Download - page 78

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8080
Other receivables listed under long-term investments relate to Eurolight Associates Ltd, which bought Tiscali’s stake in Czech
Company CD Telekomunikace Sro at the beginning of 2003 and at the same time, took over receivables owed to Tiscali S.p.A. from the
Company sold. These receivables, which originally totalled EUR 25.3 million, were written down by EUR 17.3 million to bring
them into line with their estimated realisable value. The residual value of EUR 8 million was calculated at the end of the year,
based on the amount expected to be recovered through local subsidiary Tiscali Telekomunikace Sro, which signed an agreement
with CD Telekomunikace Sro to purchase fibre optics. The estimated realisable value takes into account current conditions on the
Czech fibre optic market, which suggested that the nominal value of the loan could no longer be recovered. At the same time, the
receivable in question, originally listed with “other receivables” under current assets, was restated under long-term investments.
C) Current assets
I – Inventories
At 31 December 2003 the Group’s inventories were worth EUR 9.9 million and consisted mainly of network equipment, consu-
mables, telephone cards, goods for resale by the Company’s merchandise department, and modems.
II – Receivables
Customer receivables
At 31 December 2003 receivables from customers totalled EUR 173.2 million, net of the write-down provisions of EUR 61.6 mil-
lion. These receivables accrued from the sale of Internet services, billing of Internet access services, billing of usage-based fees
for traffic generated by Tiscali subsidiaries on third-party fixed lines, advertising revenues and business and telephone services
provided by the Group. The EUR 14.2 million decrease compared with 31 December 2002 was due to more stringent efforts to
collect outstanding receivables: collection times fell from 85 days in the last quarter of 2002 to 60 days at the end of 2003. This
enabled the Group to free up some of its working capital.
Receivables from non-consolidated subsidiaries
These totalled EUR 6.8 million, and refer to minor subsidiaries not included in the consolidation area.
Others receivables
The “advances to employees” item consists of EUR 3.2 million paid out to employees, including EUR 2.6 million in interest-bea-
ring loans to directors of the former World Online International, before the Company became part of the Tiscali Group. The figure
refers in particular to a loan to the current General Manager of the Tiscali Group, for which a repayment plan has been drawn up.
Tax credits applied for include around EUR 50 million of VAT credits from previous years, generated by the structural difference
between costs and revenues, and by the huge investments typical of companies at the start-up phase (as Tiscali was at that time).
The figure also includes government allowances and tax credits on dividends. As most of these credits are expected to be recei-
ved in 2004 with interest, the Company considers them to be essentially financial in nature. The amounts have therefore been
restated as positive items in the financial position shown in the Report on operations.
OTHER RECEIVABLES 31.12.2003 31.12.2002 CHANGE
Advances to employees 3,171 57 3,114
Tax credits applied for 59,981 29,456 30,525
Tax credits 52,198 9,071 43,127
Deposits 23 - 23
Other receivables 8,710 47 8,663
Total 124,083 38,631 85,452