Tiscali 2008 Annual Report Download - page 155

9INDEPENDENT AUDITORS’ REPORT TO THE CONSOLIDATED FINANCIAL STATEMENTS
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As more fully illustrated in the Report on Operations and the explanatory notes in the section
"Assessment of the business as a going-concern and business outlook and prospects", please note
that the Group has launched negotiations with the financial institutes with the aim of reaching an
agreement for restructuring the financial debt which, in the opinion of the Directors, should make it
possible to define a new structure of the current debt consistent with the cash flow projections of the
2009 – 2013 Business Plan, whose guidelines were approved by the Board of Directors on 27 March.
The Directors have indicated that uncertainty exists with regard to the assumption of the Group’s
business continuity, but they have adopted the assumption of the business as a going-concern in the
financial statements, deeming that there is a reasonable probability of reaching an agreement with
the financial institutes.
Nevertheless, the positive conclusion of these negotiations and the achievement of the afore-
mentioned financial debt restructuring agreement are essential elements for overcoming the
uncertainties expressed with regard to the assumption of the business continuity.
Furthermore, as referred to in the explanatory notes, in the section "Critical decisions in applying
accounting standards and in the use of estimates", the Directors reveal that the capacity to achieve
the new 2009 - 2013 Business Plan and, therefore the profit and cash flow forecasts on the basis of
which the recoverability of the main asset items has been assessed, is subordinate to the
occurrence of the conditions described under " Assessment of the business as a going-concern and
business outlook and prospects ", therefore the consolidated financial statements do not include
adjustments for possible future effects on the recoverability and classification of the assets and
liabilities which could derive from the definition of the described uncertainties.
Therefore, significant uncertainties remain such that they do not permit us to draw conclusions on
the appropriateness of the outlook of the continuation of the business activities and, consequently,
on the ability of the Tiscali Group to accomplish its activities and meet its liabilities during the
normal course of business.
4. In consideration of the importance of the uncertainties described in the previous section, we are not
able to express an opinion on the consolidated financial statements of the Tiscali Group as of 31
December 2008.
5. For a fuller comprehension of the consolidated financial statements, the reader’s attention is drawn
to the matters indicated by the Directors in the explanatory notes regarding the existence of a
number of potentially significant disputes brought by third parties against the Dutch subsidiary
World Online International NV. In May 2007, the Amsterdam Court of Appeal passed sentence,
ascertaining certain responsibility pertaining to World Online International NV, without however
passing sentence with regard to any damages, which will have to form the subject matter of new
and separate proceedings by the damaged third parties, as yet not started up. To-date, the appeal
and the counter appeal are pending before the Dutch Supreme Court against this sentence. With
regard to these disputes, the Directors believe that there are not enough sufficiently defined
elements for quantifying the potential liability and therefore they have made no provision in the
financial statements. The Directors also disclose the existence of additional situations of risk
associated with disputes outstanding or threatened, which they do not believe will lead to liabilities
of a significant amount.