Tiscali 2007 Annual Report Download - page 93

Euro/Sterling exchange rates applied to the financial move-
ments generated by the raising of a new loan with Banca Inte-
sa SanPaolo and the consequent intra-group loans, in addi-
tion to the exchange delta relating to the balance sheet bal-
ances of the UK activities.
On 10 May 2007, the Board of Directors allocated the Chief
Executive Officer 3,593,143 options for the purchase of ordi-
nary shares in the Company, which will be possible to exer-
cise, subject to the achievement of the performance targets,
also in several tranches as from 4 May 2010 and by 3 Novem-
ber 2010, at a price of EUR 2.763 (equal to the average price
of the Tiscali shares in the 30 days prior to the allocation).
On 28 June 2007, the Board of Directors assigned 23 man-
agers a total of 3,330,000 options. It will be possible to exer-
cise the options between 29 June 2010 and 28 December
2010, at an exercise price of EUR 2.378, also in several
tranches.
The fair value of the options assigned was estimated as of
the allocation date using the Black-Scholes valuation model,
taking into consideration the terms and conditions under
which the options were assigned.
In January 2007, the UK management was assigned 2,920
non performance options and 1,301 performance options on
Tiscali UK Ltd shares, at the strike price of 3,599 Sterling.
The fair value of the options assigned to the staff of the UK
subsidiaries was estimated at the date of allocation by using
the “binominal” appraising method, taking into considera-
tion the conditions of the options. Such options accrue in a
three-year period from the assignment, and may be exercised
for ten years, still from the allocation date.
The parameters adopted as the basis for the valuation of the
Stock Options are as follows:
Estimated volatility: 30% (Italy and UK)
“Risk-free” interest rate: 4.2% (Italy) and 5.25% (UK)
Estimated duration (years): 3 years (Italy and UK)
The Equity Bond reserve amounts to EUR 22 million.
It represents the implicit option to convert bonds into shares
of the Group, and it is calculated as difference between the
net amount obtained from the issue (EUR 57.7 million) and
the fair value assigned to the liability component (EUR 35.7
million).
30. Non-current financial liabilities
EUR (000) 31.12.2007 31.12.2006
Payables to bondholders 43,842 -
Payables to banks and other lenders
Payables to banks 450,053 -
Payables to other lenders 30,086 30,730
480,139 30,730
Payables for finance leases (m/l term) 79,467 15,918
Total 603,449 46,648
The financial position relates to operating activities only and is
summarised in the following table:
EUR (000) 31.12.2007 31.12.2006
A. Cash 134,231 3,824
B. Other cash equivalents - -
C. Securities held for trading - -
D. Cash and cash equivalents (A) + (B) + (C) 134,231 3,824
E. Current financial payables 7,511 7,638
F. Current bank payables 171,276 358,896
G. Current portion of non-current debt - -
H. Other current financial payables (*) 24,430 28,194
I. Current financial debt (F) + (G) + (H) 195,706 387,090
J. Net current financial debt (I) – (E) – (D) 53,964 375,629
K. Non-current bank payables 450,053 -
L. Bonds issued 43,842 -
M. Other non-current payables (**) 109,553 46,648
N. Non-current financial debt (K) + (L) + (M) 603,449 46,648
O. Net financial debt (J) + (N) 657,413 422,277
(*) includes leasing payables
(**) includes leasing payables and payables to shareholders
The statement presented above has been drawn up in light of the
Consob Communication dated 28 July 2006 and differs from that
indicated in the report on operations since it does not consider guar-
antee deposits and other current financial receivables amounting
to around EUR 20.9 million among other cash equivalents.
The net financial position indicated in the table above is reconciled
with the net debt shown in the Report on Operations as follows:
CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES AT 31 DECEMBER 2007
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