Tiscali 2008 Annual Report Download - page 164

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163
REPORT OF THE BOARD OF STATUTORY AUDITORS
Tiscali Spa 2
Report of the Board of Statutory Auditors
the general performance of the subsidiary company. In this connection, no significant data or
information emerged which must be highlighted in this report.
- We have appraised and overseen the adequacy of the internal audit system and the
administrative-accounting system, as well as the reliability of the latter to correctly represent
the operating events, by means of obtaining information from the heads of the respective
divisions, the examination of the corporate documents and the analysis of the results of the
work performed by the independent auditors, overseeing the activities of the individual tasked
with the internal audit, and in this connection we have no particular observations to make.
The Company has adopted the "Organization, management and control model pursuant to
Italian legislative Decree No. 231/2001" and, as indicated by the Directors, during 2008 - in
consideration of the numerousness of the new types of offence – a project was launched to
reviewing said Model, with the support of a consulting firm specialized on this subject.
- We held meetings with the representatives of the independent auditing firm as per Article
150.2 of Italian Legislative Decree No. 58/98, and no significant data or information
emerged which requires indication in this report.
- There have been no significant infraGroup transactions, which we were made aware of as
per Article 150 of Italian Legislative Decree No. 58/98.
- Transactions with related parties are analytically indicated in the report on operations
where the balance sheet and income statement values are summarized, in relation to which
reference should be made to the specific section of the consolidated financial statements
entitled "Transactions with related parties".
- The independent auditing firm Reconta Ernst & Young SpA is at present issuing its reports on
the statutory financial statements and the consolidated financial statements, which contain
a declaration of impossibility of expressing an opinion due to the existence of significant
uncertainties regarding the supposition of the Group’s business continuity. In detail, the
reasons for the decision can be summarized as follows:
- the levels of the financial covenants envisaged by certain loan agreements have not be
observed;
- after the end of the year, the Group suspended the payments envisaged within the
sphere of the outstanding loan agreements and did not, thereby, repay principal and
interest instalments for a total of EUR 35 million falling due in March 2009;
- the Group 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 define a new debt structure consistent with the cash
flow projections of the 2009-2013 business plan.