Tiscali 2008 Annual Report Download - page 84

The item Properties, amounting to EUR 58 million, mainly
relates to the value of the SA llletta investment, headquarters
of the parent company in Cagliari.
The net book value of “Plant and Machinery” (EUR 161.5 million)
comprises, in particular, specific and network equipment such
as routers, servers, optical devices and telephone systems for
the core management of the business.
The EUR 53.9 million increase reflects the significant investments
concerning the development of the infrastructure which is
necessary to support the ADSL service range in unbundling mode.
The “Other assets”, whose balance amounts to EUR 12.8
million, include furniture and furnishings, electronic and
electromechanical office equipment as well as motor vehicles.
In addition, the item other fixed assets includes around EUR
9.5 million mainly relating to intangible assets in process of
formation and advance payments pertaining to the Italian
subsidiary Tiscali Italia S.p.A. essentially attributable to
transmission apparatus purchased but not yet in use at the
end of the year within the sphere of the LLU network for EUR
6.1 million and to modems in inventories destined to be loaned
to customers for the connection of broadband (ADSL) lines.
Total writedowns, for a net value of EUR 2.6 million (of which
EUR 3 million on the historic cost and EUR 0.4 million on
accumulated depreciation) mainly concern the assets of Tiscali
Italia S.p.A. and were made following the decision to interrupt
the IPTV service. In particular, the writedown includes: servers
and specific systems for EUR 1.7 million, routers for around
EUR 0.6 million, other IPTV equipment for EUR 0.1 million and
set top boxes for approximately EUR 0.6 million.
Decreases during 2008 in the various categories of fixed
assets reflect the normal depreciation process and disposals
of fixed assets
Assets destined to be sold include the intangible assets of
the TiNet Group.
The item Exchange differences includes the changes deriving
from the GBP/EURO exchange differences at the time of
conversion of the UK assets from local currency to the reporting
currency of the consolidated financial statements.
Equity investments (note 17)
Equity investments, carried at equity, recorded in the financial
statements for a total value of EUR 33 thousand, refer to
minority interests held by the parent company and the
operating subsidiary Tiscali Italia S.p.A..
The list of these investments is presented in the specific
section (see note List of subsidiaries included in the
consolidation area).
Other non-current financial assets (note 18)
EUR (000) 31.12.2008 31.12.2007
Guarantee deposits 12,725 16,290
Other receivables 2,256 11,958
Equity investments in other companies 2,332 20
Total 17,313 28,269
Guarantee Deposits amounting to EUR 12.7 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 6.3 million in deposits relating to
lease agreements of the UK subsidiaries, and EUR 0.2 million
in deposits relating to the German subsidiaries. The change
with respect to the previous year is essentially due to the
reduction in the deposits relating to the UK subsidiaries (from
EUR 8.8 million in 2007 to EUR 6.3 million in 2008) and to
the German subsidiaries (from EUR 1.2 million in 2007 to
EUR 0.2 million in 2008).
Other receivables include EUR 1.4 million in receivables from
the TiNet Group and receivables from other companies for
EUR 0.8 million.
The change of EUR 9.7 million with respect to the previous
year is attributable to the reversal of the fair value of the early
conversion options contained in the regulations of the
convertible bond for EUR 8 million, further to the conversion
of the same to capital on 15 September 2008. Furthermore,
the balance at 31 December 2007 included the positive
balance of the fair value of the swap (IRS) recorded on Tiscali
International BV for EUR 1.3 million, whose value at 31
December 2008 was recorded under financial liabilities, since
it presented a negative balance of EUR 9.5 million.
The item equity investments in other companies includes just
the equity investments held by Tiscali Italia S.p.A. in Janna,
recorded in the previous year in the item equity investments.
Deferred tax assets (note 19)
At 31 December 2008, tax assets for prepaid taxes amounting
to EUR 10.5 million in total were recorded in the financial
statements (EUR 106.6 million at 31 December 2007).
EUR (000) 31.12.2008 31.12.2007
Deferred tax assets 10,507 106,634
Total 10,507 106,634
Deferred tax assets recorded in the financial statements relate to
tax losses carried forward by Tiscali Group companies. The prepaid
taxes have been provided for on the basis of forecasts on the taxable
income which can be generated reasonably in light of the business
plans, accompanied by the related tax plans, and the current
performance of the Group companies to whom the tax losses refer.
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CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES