Tiscali 2009 Annual Report Download - page 179

Tiscali Group: Annual Report 2009
178
The table below indicates movements in the period for each investment in each associated company.
ASSOCIATED COMPANIES Balance
Increases (Disposals)
Revaluations/
Write-downs Decreases
Balance
31-Dec-08 31-Dec-09
(EUR 000)
STS Studi Tecnologie e Sistemi S.r.l. 19 - (19) - - -
19 - (19) - - -
The STS Studi Tecnologie e Sistemi S.r.l. company, which was active in the sector of producing and
developing software and information technology, was sold to the subsidiary Tiscali Italia S.p.A. in March
2009.
Checks of the value reductions in shareholdings in subsidiary companies
At the date of the financial statements, also in consideration of the presence of impairment indicators,
a check of any losses of value of the assets as required by IAS 36 was carried out and was stated in the
Document filed with the Bank of Italy / Consob / Isvap no. 4 in March 2010.
Tiscali Italia S.p.A.
Checks on any losses in value of asses by comparing the book value of the shareholding at 31 December
2009 with the value as a going concern was made only by reference to the subsidiary Tiscali Italia S.p.A.
From that comparison no need to make any value reduction emerged.
Value as a going concern was determined based on the following fundamental items:
(i) Definition of the “cash generating units”
In order to check the reduction in value of the shareholdings held by Tiscali S.p.A. the same
unites that generate cash flow were adopted for checking the value reduction of the goodwill
in the consolidated financial statements. For this purpose, the group has identified the Cash
Generating Units for the sectors that form the scope of the segment information specified and
broken down by geographical area. Checking any losses in value of the assets was made by
reference to the “Italy” Cash Generating Unit.
(ii) Recoverable value estimation criteria
The value as a going concern of a Cash Generating Unit (CGU) was determined using the cash
flows arising form the last approved reorganisation Plan (“2009-2013 Plan”).
From the point of view of economic/financial targets, the main assumptions involve:
• A specific forecast period equal to the residual term of the plan (4 years);
• EBITDA arising form the hypotheses of market and business changes;
• Investments to maintain the changes in business forecast and the levels of yield planned;
• Calculating the terminal value in perpetuity based on the projection from the last year of
the Plan;
• WACC discounting rate determined on the basis of market assessments of the cost of
money and the specific risks of the typical company business;
• Long Term Growth – LTG equal to 2%, in line with analyst predictions.