Tiscali 2008 Annual Report Download - page 122

negotiations have been started with the afore-mentioned
institutes for the definition of a new structure of the debt on
a consistent basis with the expected cash flows;
g) the definition of agreements with the main suppliers so as
to ensure the regular continuation of operating activities; in
this connection, the Directors have disclosed that the
Group’s business activities in Italy and the UK are
proceeding on a regular basis vis-à-vis the customers and
the suppliers.
.
Final assessment of the Board of Directors
In light of the above comments, the Board of Directors believes
that as things stand, reasonable probability exists of being able to
achieve the restructuring of the Tiscali Group’s financial debt on
a consistent basis with the cash flows and suitable for supporting
the new Business Plan.
As a point of fact, the attention and interest demonstrated by the
financial institutions in relation to the Company, the signing of a
waiver and standstill agreement (with the aim of permitting the
finalization of the restructuring agreement), the willingness to
extend the standstill period until 31 December 2009 expressed,
the start of negotiations, and the fact that both the Business Plan
and the related Financial Plan have been prepared in accordance
with maximum prudence and seriousness, converge in the sense
of the afore-mentioned positive assessment made by this Board.
In light of the above, the business continuity is therefore
considered to exist, since this Board believes that as things
stand there is reasonable probability of finalizing an agreement
with the financial institutions.
Form and content of accounting statements
Basis of presentation
The 2008 statutory financial statements represent the separate
financial statements of the Parent Company Tiscali S.p.A. and
have been prepared in observance of the International
Accounting Standards (“IFRS”) issued by the International
Accounting Standards Board (“IASB”) as approved by the
European Union, as well as the instructions issued by way of
implementation of Article 9 of Italian Legislative Decree No.
38/2005. The IFRS are understood to include all the reviewed
international accounting standards (“IAS”) and all the
interpretations of the International Financial Reporting
Interpretations Committee (“IFRIC”), previously known as the
Standing Interpretations Committee (“SIC”).
Preparation of the financial statements requires management to
make accounting estimates and in certain cases, adopt
assumptions in the application of accounting standards. The areas
of the financial statements which, under the circumstances,
presuppose the adoption of applicative assumptions and those
more fully characterized by estimates made, are described in the
note
Critical decisions in applying accounting standards and in
the use of estimates
on page 73.
Financial statement formats
The financial statements comprise the accounting statements
(Income Statement, Balance Sheet, Statement of changes in
shareholders’ equity, and Cash Flow Statement), with explanatory
notes. The Income Statement was drawn up in line with the
minimum contents envisaged by IAS 1 – Presentation of Financial
Statements – with costs assignment by nature; the Balance Sheet
was drawn up by following the scheme pointing out division of
“current/non-current” assets and liabilities; the Cash Flow
Statement was drawn up by following the indirect method.
Accounting standards
General principles
The financial statements were prepared in compliance with the
International Financial Reporting Standards (IFRS). The main
accounting standards are detailed below. These standards were
applied consistently to all periods presented.
Preparation of the financial statements requires management to
make accounting estimates and in certain cases, to adopt
assumptions in the application of accounting standards. The areas
of the financial statements which, under the circumstances,
presuppose the adoption of applicative assumptions and those
more fully characterized by estimates made are described in note
7.5.3 of this section.
Equity investments in subsidiaries
Equity investments in subsidiaries and associated companies are
recognised at cost, as adjusted for any impairment.
In application of IAS 36, the value of equity investments recognised
at cost is reduced if there is impairment or if circumstances
emerge that indicate that said cost is irrecoverable. If the
impairment is discovered to no longer apply or is reduced, the book
value is increased to the new estimated recoverable value, up to a
maximum of the value recognised initially.
Impairment of assets
The book value of Equity investments, Other intangible assets and
Properties, plant and machinery is tested for impairment whenever
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