Tiscali 2003 Annual Report Download - page 40

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41
of damages claimed. Similar proceedings were launched by another Dutch foundation, Stichting Van der Goen WOL Claims, in
August 2001;
• In December 2000, Jean Philippe Illiesco de Grimaldi and Illiesco de Grimaldi & Co initiated legal proceedings against World
Online Ltd, a UK subsidiary of the World Online Group, complaining that they were prevented from exercising an option to pur-
chase World Online Ltd shares. They are claiming damages of around EUR 17.4m for loss of the profit they could have made
on the resale of the shares. Tiscali has a bank guarantee of EUR 21.4 million against this claim. In December 2003, the Dutch
court entered an interlocutory judgement requiring the plaintiffs to substantiate their claims;
• In December 2000, Globetrans Ltd and Interglobetrans Ltd began legal proceedings against World Online International N.V..
The plaintiffs, both of which are controlled by Jean Philippe Illiesco de Grimaldi, are asserting their right to a 1% commission
on the total sum paid by Tiscali for the purchase of World Online International N.V., since they put the Company’s manage-
ment in contact with Tiscali. The sum claimed is around EUR 69 million. In December 2003, the Dutch court entered an inter-
locutory judgement requiring the plaintiffs to substantiate their claims;
• The Dutch tax authorities have begun to investigate an alleged failure to pay social security contributions totalling EUR 40
million in relation to payments allegedly received by former World Online chairman James Kinsella from the Company
Reggenborg, a former World Online shareholder. The payments in question relate to 2002, well after Mr Kinsella left the Group
in February 2001. The Company claims that these payments, of which it was not aware, in any event concern personal rela-
tions between Mr Kinsella and Reggenborg, and do not therefore involve Tiscali.
Transition to IAS/IFRS
Pursuant to Regulation (EC) 1606 of July 2002, EU companies listed on a regulated market are required to adopt IAS/IFRS in
the preparation of their consolidated accounts from 2005. In order to comply with the recommendations of the CESR (Committee
of European Securities Regulators), of which Consob is a member, the measures to be taken by Tiscali to make the transition to
IAS/IFRS are summarised below.
Tiscali began a programme to adopt IAS/IFRS at the end of 2003; to this end, it has set up work Groups divided according to
accounting area and expertise (accounting, management control, operating processes, IT systems, etc) within both the parent
Company and its main operating subsidiaries.
First-time adoption of international accounting principles:
Annual and interim accounts prepared in compliance with IAS/IFRS must contain an explicit and unreserved statement of com-
pliance with all the standards in force at the end of the period under review, and must include at least one earlier set of accounts
prepared using the same criteria for the purposes of comparison.
On the date of transition to IFRS, that is the beginning of the earliest period for which a Company presents comparative infor-
mation (1 January 2004 for Tiscali), the Company shall prepare a balance sheet that:
• shows all assets and liabilities recognised according to the new standards;
• restates assets and liabilities according to their values had the new IAS/IFRS principles always been applied.
The effect of adjusting the initial balances of assets and liabilities to the new standards is shown under shareholders’ equity.