Tiscali 2009 Annual Report Download - page 36

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Risks connected with the dependence on technology of the telecommunications sector
The Group, which operates in a highly complex market from a technological point of view, is exposed to
a high risk regarding IT and ICT systems. As regards the management of the risks connected with the
damage to and malfunctioning of said systems, on which the business management is based, the Group
invests adequate resources aimed at protecting all IT tools and processes. The core business systems are
all highly reliable; the data centre in the Cagliari headquarters is equipped with safety systems such as the
fire prevention and anti-flood systems, while the copies of data back-ups made by operational personnel
are kept in a different location from the CED (data processing centre) guaranteeing a high level of reliability.
The programmatic document on safety is drawn up on an annual basis which defines the safety measures
(technical, IT, organisational, logistical and procedural tools) aimed at reducing the risks of destruction or
loss, even accidental, of this data, and of unauthorised access or treatment.
Risks associated with financial requirements
The evolution of the Group’s financial situation depends on different factors, in particular, for example, the
achievement of the forecast objectives, the trend in the general conditions of the economy, the financial
markets and the sector in which the Group operates.
During 2009, Tiscali implemented a restructuring plan aimed at ensuring the long-term economic and
financial equilibrium which, as described above, was completed successfully in December 2009. The
continuous obtainment of adequate financing depends largely on the general conditions of the credit market
and the Group’s capacity to correctly implement the economic and financial plan aimed at creating a stable
economic and financial balance.
Risks associated with fluctuations in interest and exchange rates
The Tiscali Group, operates exclusively in Italy. However, some supplies, even though for insignificant
amounts, are denominated in foreign currency. The same can be said for the GBP 35.4 million as guarantee
deriving from the sale of Tiscali UK.
Therefore, sudden fluctuations in interest and exchange rates could have a negative impact on the Group’s
economic and financial results.
Risks associated with dealings with employees and suppliers
Group employees are protected by various laws and/or collective labour contracts which ensure they have,
via local and national delegations, the right to be consulted with regard to specific matters, including therein
downsizing or the closure of departments and the reduction of the workforce. These laws and/or collective
labour contracts applicable to the Group and its suppliers could influence its flexibility when strategically
redefining and/or repositioning its activities. Tiscali’s ability and that of its suppliers to make staff cuts
or take other measures, even temporary, to end the employment relationship is subject to government
authorisations and the consent of trade unions. Trade union protests by workers could negatively affect the
company’s activities.
Risks associated with the turnover of management and other human resources with key roles
The company’s future depends greatly on the ability of its executives to handle it effectively. The loss
of the services of an executive director, a first level manager and other key resources without adequate
Report on operations