Tiscali 2007 Annual Report Download - page 100

Financial assumptions
Inflation rate: 2%
Discount rate: 5.6%
Demographic assumptions:
Mortality: ISTAT 2002 M/F
mortality tables with
reference also to SIM 2002
and SIF 2002
Disability: INPS 1998 M/F
disability tables
Resignation: 4% for Tiscali Services S.p.A.
and Tiscali S.p.A. between
20 and 65 years of age
5% for Tiscali Italia S.p.A.
Advance payments: 1% according to age
Retirement: 65 for men and 60
for women, with maximum
length of service of 40 years
33. Provisions for risks and charges
A breakdown of the provision covering risks and charges is as
follows:
EUR (000) 31.12.2006 Provisions Utilisation 31.12.2007
Provisions for risks and charges 38,059 22,787 (32,223) 28,624
Total 38,059 22,787 (32,223) 28,624
The increase in risk provisions, amounting to EUR 22.8 million,
is attributable to the opening balance of the provision recorded
by the companies disposed of for EUR 1.5 million, to provisions
for the period against disposal charges relating to the German
affiliated companies for EUR 10.4 million and to provisions record-
ed by UK subsidiaries for EUR 10.4 million, and by Tiscali S.p.A.
for EUR 0.4 million.
Uses of the provision during 2007, amounting to EUR 32.2 mil-
lion, were mainly attributable to the following events:
3use of the provision established as at 31 December 2006 by
the UK subsidiary in order to cover the charges for reorgani-
zing Video Network Ltd, in relation to the effective incurring of
these charges during the first half of 2007, for an amount total-
ling EUR 20.3 million, and for the charges relating to non-lea-
sed properties for EUR 1 million;
3use of the provision relating to the dispute with the supplier
PRISA (established in 2006 by Tiscali S.p.A.) in relation to
the definitive settlement of said dispute, for a total of EUR
6 million;
3use of the provision relating to the dispute with SCARLET (asso-
ciated with the disposal of Tiscali Belgium), pertaining to Tisca-
li International BV, following the definitive settlement of the
same for a total of EUR 2.8 million;
3use of the taxation provision (pertaining to Tiscali Interna-
tional BV), against the definitive definition and settlement of
the Kinsella claim and the payment of the prior VAT for a
total of EUR 1.9 million.
34. Provision for deferred taxation
The item provision for deferred taxation amounts to EUR 27.9
million. The amount was recorded in the financial statements
by taking into consideration the fair value of intangible fixed
assets, excluding goodwill, registered in conformity with IFRS
3 at the acquisition of Pipex.
35. Current financial liabilities
EUR (000) 31.12.2007 31.12.2006
Payables to banks and other lenders:
Payables to banks 176,204 374,787
Payables for finance leases (short-term) 19,502 12,303
195,706 387,090
35.1 Payables to banks and other lenders
This item disclosed a significant decrease with respect to Decem-
ber 2006.
The change, amounting to EUR 198.5 million, is essentially attri-
butable to the following factors:
3repayment of the Silverpoint loan (EUR 251.2 million),
3repayment of EDC loan (EUR 13.3 million),
3repayment of the Sa Illetta mortgage loan (EUR 29.1 million)
against a sale & lease back transaction for a total of EUR 59.7
million,
3repayment of the Barclays loan pertaining to the UK affiliated
companies (EUR 52.6 million).
3opening of Banca Intesa San Paolo & JP Morgan loan amoun-
ting to nominal EUR 650 million, of which nominal EUR 250 mil-
lion are classified short-term, since repaid in February by means
of the income originating from the capital increase with the same
amount.
35.2 Payables for finance leases
This item refers to the short-term portion of payables due to lea-
CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES AT 31 DECEMBER 2007
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