Tiscali 2009 Annual Report Download - page 84

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of the term (see note 27);
iii. 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 of the Board of Directors
In light of the above factors, the Board of Directors considered that in 2009 the Group:
a) completed all the actions required by the Restructuring Plan, including repayment of a significant
portion of the financial debt and restructuring (with more favourable terms), as well as the 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 the main assumptions used
for its preparation and the validity of their business strategy and model. In particular, the Directors noted
that the customer acquisition trend was reversed and how the year-end result, though negative on
the whole, recorded considerable improvement with a positive consolidated result (EUR 11.4 million)
compared to last year’s negative result (EUR 14.2 million) with a consolidated loss generated from a
reduction in operating assets from EUR 127.7 million in 2008 to EUR 14.7 million in 2009, also thanks
to proceeds from the write-off of EUR 42.3 million in debt by the financial institutions, as provided for
in the agreements;
c) verified consistency between the Business Plan and the financial needs of the new debt structure, as
well as the suitability of the Plan to respect the covenants and other contractual obligations.
These elements mean the Group is reasonably positioned to implement the Business Plan and this will
enable it to achieve a situation of financial and economic equilibrium in the long-term.
In conclusion, the Directors, in analyzing what was already achieved in the context of a path aimed
at allowing the Group and the Company to obtain long-term financial and economic equilibrium,
recognise that, as of today’s date, uncertainties still remain, as mentioned above, with regards to events
and circumstances that may raise considerable doubt on the ability of the Group and the Company
to continue to operate under the going-concern assumption. However, after making the necessary
checks and after assessing the uncertainties found in the light of additional factors described, they
have the reasonable expectation that the Group and the Company have adequate resources to continue
operations in the foreseeable future and have therefore adopted the going-concern assumption in
preparing the financial statements.
Consolidated Financial Statements and Explanatory Notes