Tiscali 2007 Annual Report Download - page 91

The item “Properties”, amounting to EUR 59.8 million, mainly
relates to the value of the investment of SA llletta, the headquar-
ters of the parent company in Cagliari.
The sale & lease back transaction on the property of Sa lllet-
ta implied a net change in the value recorded in the financial
statements, equalling EUR 33 million, made up of an overall
decrease by EUR 28.3 million (EUR 23.3 million of which
recorded in the category Property, and EUR 5 million record-
ed in the category Plant and Machinery), and, at the same
time, of an increase amounting to EUR 61.4 million, with val-
uation fixed in the contract.
The net accounting value of “Plant and Machinery” (EUR 196.6
million) includes, in particular, specific and network appara-
tuses such as routers, servers, optical devices and telephone
exchanges which make up the predominant portion of tangi-
ble fixed assets. The EUR 86.2 million increase reflects the
remarkable investments concerning the development of the
infrastructure that is necessary to support the ADSL service
supply in the unbundling mode.
Moreover, the balance includes EUR 2.2 million relating to Pipex’s
plant and machinery.
The “Other assets”, whose balance amounts to EUR 15.7 mil-
lion, include furniture and furnishings, electronic and electro-
mechanical office equipment as well as motor vehicles.
The balance includes EUR 0.4 million of other Pipex’s assets.
21. Equity investments
Equity investments, carried at equity and recorded in the finan-
cial statements for a total of EUR 2.5 million, refer to minor
equity investments held by the parent company and by its
operative subsidiary Tiscali Italia S.p.A. The list of companies
is reported in the appropriate section (List of equity invest-
ments)
22. Other non-current financial assets
EUR (000) 31.12.2007 31.12.2006
Guarantee deposits 16,290 11,504
Other receivables 11,958 1,591
Equity investments in other companies 20 -
Total 28,269 13,095
Other non-current financial assets include financial instru-
ments that the Group intends and is able to hold to maturity
and that do not meet the requirements for classification as
cash or cash equivalents.
Guarantee deposits amounting to EUR 16.3 million, include
EUR 6.2 million in deposits recorded in relation to the Italian
subsidiary relating to the sale and lease back transaction on
the SA Illetta property, EUR 8.8 million in deposits relating to
lease agreements of the UK subsidiaries, and EUR 1.3 mil-
lion in deposits relating to the German subsidiaries.
Other receivables totalling EUR 11.9 million include the val-
orization at fair value of the options of advance conversion
included in the regulation of the convertible bond loan amount-
ing to EUR 8 million, the valorization at fair value of the swap
(IRS) recorded by Tiscali International BV for EUR 1.3 mil-
lion, and receivables due from non-consolidated companies
totalling EUR 2.4 million.
The value of the options had an initial countervalue in the
amount of the bond loan, contributing to the fixing of the basic
value for calculating the amortised cost. Future changes in
the fair value of the options will be recorded by the income
statement.
23. Deferred tax assets
EUR (000) 31.12.2007 31.12.2006
Deferred tax assets 106,634 144,706
For an analysis of this item, reference should be made to note
15 above.
24. Inventories
At 31 December 2007, inventories totalled EUR 10.8 million
and mainly relate to network equipment, consumables, tele-
phone cards, goods for resale for merchandising activities and
modems.
25. Receivables from customers
EUR (ml) 31.12.2007 31.12.2006
Receivables from customers 244,787 170,777
Writedown provision for losses (80,335) (35,040)
Total 164,452 135,737
At 31 December 2007, receivables from customers totalled
EUR 164.4 million, after write-downs of EUR 80.3 million.
These receivables accrued from the sale of internet services,
billing of network access services, inverse interconnection
traffic, advertising revenues and
business and telephone serv-
ices provided by the Group. The book value of trade receiv-
ables, in view of the maturities mentioned below and of con-
ditions regulating the supply of services by the Group, is
approximate to their ‘fair value’.
The analysis of receivables is carried out periodically. Every
country adopts a specific policy for calculating the receivable
writedown provision, with reference to experience and histor-
ical trends.
However, the receivable writedown provision is fixed with a view
CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES AT 31 DECEMBER 2007
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