Tiscali 2007 Annual Report Download - page 133

tion and development. Net changes during the period relate to
the EUR 0.3 million waiver by the Parent Company of receiv-
ables, with the full amount charged to the income statement.
Quinary is still undergoing redefinition of its role in the Tiscali
Group. It is considered that the residual carrying amount can
be deemed to represent the goodwill value of the investment.
Tiscali Czech Republic S.r.o.
This is a small equity investment in a non-operating company
in the Czech Republic, now in liquidation.
Tiscali Deutschland Gmbh
Tiscali Deutschland held a substantial portion of operating assets
in the Tiscali Group in Germany, managed by Tiscali GmbH. In
the first months of 2007, agreements were reached between Tis-
cali S.p.A. and Freenet AG for the disposal of B2C assets.
The results of the impairment test, developed taking into ac-
count the effects of the events indicated above, led to the in-
tegral writedown of the equity investment by mean of booking
to the income statement.
Tiscali Finance SA
The book value for this investment, a Tiscali Group “vehicle”
which managed the Equity Linked Bonds of EUR 209.5 million
repaid in September 2006, is indirectly adjusted by the sum of
EUR 18.7 million recognised as a provision for risks and charges,
established in previous years to cover the residual deficit of this
subsidiary. During 2007, the equity investment was written down
in full by means of booking to the income statement.
Tiscali Italia S.p.A.
As part of the project to streamline the Tiscali Group structure,
effective from 1 January 2005, all operating activities of Tiscali
S.p.A. in Italy were transferred to Tiscali Italia S.r.l., i.e.: con-
sumer, business, media, technology, the Italian network infra-
structure, staff activities, licenses and authorisations for
telecommunications and Internet services, for a total value of
EUR 184.9 million. This value mainly represents goodwill, as-
sessed as EUR 158.7 million.
Even though the investee company ended 2007 with a net loss
of EUR 28.8 million, the results of impairment testing did not
reveal any issues concerning the book value for this equity in-
vestment (EUR 55 million), in the light of the valuation per-
formed using the Discounted Cash Flow method described
above.
Tiscali Motoring S.r.l
The book value of this equity investment, currently in liquida-
tion, was fully written down during 2006.
Tiscali Services S.p.A.
On a similar basis to Tiscali Italia S.p.A., this company was af-
fected by the transaction for the conferral of Tiscali S.p.A.’s op-
erating activities in 2005. In detail, Tiscali Services S.r.l.
received all the information technology, media development
and new products activities intended for the entire Group, for
a total value of EUR 31.2 million.
Changes during the period refer to the partial waiver of receiv-
ables to cover the loss for 2006 by means of the booking to the
income statement of EUR 8.2 million, as well as the transfer of
the same to the subsidiary Tiscali Italia S.p.A.
The subsidiary ended the financial year with profit of EUR 2.2
million.
World Online International N.V.
This is a sub-holding based in the Netherlands which, at 31
December 2007, controlled Tiscali Group companies operat-
ing, in particular, in the UK.
Impairment testing on the book value of Tiscali S.p.A.’s invest-
ment in World Online International NV at 31 December 2007
(net of write-downs for permanent losses of EUR 735.7 million
recognised in previous years) was performed on the basis of
assumptions indicated in the foreword to the notes on equity
investments.
The value of World Online International NV was in this case
mainly represented by the value of the underlying Dutch sub-
holdings and items in the financial statements relating to its fi-
nancial position, was determined on the basis of an approach
focused on the discounting of expected cash flows as indicated
in the Tiscali Group business plan.
The residual net book value of EUR 1,076 million maintains its
importance, taking into account that the main underlying as-
sets refer to the operating equity investments in the UK in par-
ticular.
Tiscali International Network S.p.A.
In the last financial year, Tiscali International Network S.p.A. was
10% controlled by Tiscali S.p.A. and the remaining 90% by
Dutch sub-holding Tiscali International Network BV.
TISCALI S.P.A. – SINANCIAL STATEMENTS AT 31 DECEMBER 2007
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