Tiscali 2013 Annual Report Download - page 15

Annual financial report as at 31 December 2013
Date
File Name
Status
Page
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Annual Report as at 31
December 2013
15
the economic system, together with a reduction in household disposable income, has cut the general
level of consumption, with a depressive impact on the capacity for a quick recovery.
The activities, strategies and prospects of the Tiscali Group are influenced by this state of play, and as
a result this also affects the economic, equity and financial position.
Risks connected with the performance of the telecommunications market
The telecommunications market the Tiscali Group operates in is extremely competitive in terms of
innovation, price, efficiency and user support. Tiscali competes with other groups at international level
and with various local operators.
The success of the Group’s activities depends on the capacity to maintain and increase shares of the
market in which it currently operates through high quality, innovative services that guarantee adequate
levels of profitability. If the Group is unable to maintain its competitive position with respect to the main
competitors in terms of price and quality and other elements, the Tiscali Group’s market shares could
fall, with a negative impact on the economic and financial results of the Group.
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 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 security system document is drawn up on an annual basis defining 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 handling of the same.
Risks associated with financial requirements
The evolution of the Group’s financial situation depends on different factors, in particular 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.
The Group has implemented a restructuring plan aimed at ensuring long-term economic and financial
equilibrium. The on-going attainment of adequate financing depends on both the general conditions of
the credit market but above all the Group’s ability to manage to finalise the restructuring of the debt
outstanding with the Financing Institutions maturing in 3 July 2014 and subsequent years, and
correctly implement the economic and financial plan aimed at creating stable economic and financial
balance conditions.
For further information please refer to section 3.7 “Evaluation of the company as a going-concern and
future outlook”.
Risks associated with fluctuations in interest and exchange rates
The Tiscali Group operates essentially in Italy. Some supplies, even though for insignificant amounts,
could be denominated in foreign currency; therefore, the risk of exchange rate fluctuations which the
Group is exposed to is minimum. The Tiscali Group is exposed to risks deriving from changes in the
interest rates which could have a negative impact on the economic and financial results.