Tiscali 2009 Annual Report Download - page 162

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is still significant and subject to covenants and other contractual obligations (so-called ‘default
events”) which, as is the practice with such contracts, could trigger the end of the benefit of the
term (see Note 27 on this topic).
iv. achieving a situation of long-term financial and economic equilibrium for the Group is subject
to achieving the results indicated in the Plan, in the context of the current uncertain economic
scenario, and therefore connected to the achievement of the forecasts and assumptions contained
in the Plan and, in particular, those concerning the evolution of the telecommunications market
and the achievement of the growth objectives set in a market characterized by strong competitive
pressures.
Thus the following depends on the possibility and capacity of executing the plan: a) the ability of re-
establish an adequate level of shareholders funds, b) the recoverability of its assets, c) the ability to comply
with the covenants and the other contractual commitments and thus to maintain the availability of the
funding granted and to face up the group’s obligations, d) achieve a long-term financial and economic
equilibrium for the Group.
To these factors need to be added the litigation matters described in the notes to the financial statements,
the outcomes of which although not reasonably predictable at the moment, nor be reasonably expected in
the next twelve months following the balance sheet date, have been evaluated as potentially significant (see
the paragraph “Disputes, potential liabilities and commitments”.
Final Assessment by the Board of Directors
The Board of Directors, in assessing the items set out above, has considered that in the course of 2009 the
Group has:
a) completed all the actions required by the Restructuring Plan, including the repayment of a significant
portion of the financial debt and restructuring (under more favourable terms) of the residual debt,
completion of the share capital increase, proof the confidence the market and financial institutions
have in the company’s business model;
b) positively launched the implementation of the 2009-2013 Plan, confirming, at present, both the main
assumptions used for its drafting and the validity of the industrial strategy and the business model:
in particular the Directors have observed how the trend for customer acquisition has been inverted
and how the profit and loss account for the year, even if was negative overall, showed a considerable
improvement, with a positive consolidated trading result (EUR 11.4 million) compared with the previous
year’s negative result (EUR 14.2 million) and with a consolidated loss from trading as a going concern,
which was reduced from EUR 127.7 million in 2008 to EUR 14.7 million in 2009, thanks also to income
from the removal of EUR 42.3 million of debt on the part of funding institutions, in line with what was
provided in the agreements;
c) verified the consistency between the Restructuring Plan and the financial needs determined by the
new debt structure and the suitability of the plan to fulfil the covenants and the other contractual
commitments.
These items make it consider that the Group is reasonably positioned to implement the Business Plan
and that this will enable it to achieve a situation of financial and economic equilibrium in the long-term.
In conclusion the Directors, in analysing what was already achieved in the context of a path aimed at
allowing the Group and the Company to reach a long-term financial and economic equilibrium, recognise
that, as of today’s date uncertainties remain, as stated above, relating to events or circumstances that
could give rise to significant doubts on the Group and the Company’s ability to continue to operate on
Tiscali S.p.A. Accounting Statements and Explanatory Notes