Tiscali 2008 Annual Report Download - page 91

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•the liability has been established for each company
concerned, to an extent equating to the
average current
value of the future benefits
which will be generated by the
provision existing as of the valuation date, without
considering any future provision (for companies with at
least 50 employees) or identifying the portion of the current
average value of the future benefits which refer to the
service already accrued by the employee in-house as of
the value date (for the other companies).
Financial assumptions
Inflation rate: 2.25%
Discount rate: 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: 3.5% for Tiscali Italia S.p.A.
and 4% for Tiscali Spa
between 20 and 65
Advance payments: 2% according to age
Retirement: 65 for men and 60 for
women, with maximum
length of service of 40 years
Provisions for risks and charges (note 32)
A breakdown of the provisions covering risks and charges is
as follows:
The balance includes the provision for Pipex and VNL
restructuring charges totalling EUR 9 million, charges relating
to properties leased by the German subsidiaries for EUR 4.3
million, the provision of EUR 8.4 million for restructuring charges
of the Italian subsidiaries and corporate activities, EUR 1.4
million for tax risks on a company in liquidation held by Tiscali
International BV, along with EUR 1.8 million pertaining to Tiscali
spa relating to disputes with employees.
Use during the period was mainly attributable to the coverage
of the Pipex restructuring charges for around EUR 10 million,
as well as the turning to income of a number of provisions
recorded previously on the German subsidiaries which were
in excess for EUR 7.5 million.
Provision for deferred taxation (note 33)
The item Provision for deferred taxation presented a zero
balance at 31 December 2008.
The amount was recorded in the financial statements at 31
December 2007 against the fair value of the intangible fixed
assets relating to the Pipex business combination, totalling
EUR 27.9 million, and was released in full to the income
statement in 2008. The Company considered it advisable to
write-off the total net tax assets on the UK subsidiaries.
The composition of the provision for deferred taxation is as follows:
90
CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES
EUR (000) 31.12.2007 HFS/Discontinued Exchange Provisions Utilisation 31.12.2008
operations difference
Provisions for risks and charges 28,624 (22) (3,023) 18,957 (19,151) 25,384
Total 28,624 (22) (3,023) 18,957 (19,151) 25,384