Tiscali 2008 Annual Report Download - page 154

9INDEPENDENT AUDITORS’ REPORT TO THE CONSOLIDATED FINANCIAL STATEMENTS
153
Independent Auditors’ Report
pursuant to Article 156 of Italian Legislative Decree No. 58 dated 24 February 1998
To the Shareholders of
Tiscali S.p.A.
1. We have audited the consolidated financial statements, comprising the balance sheet, income
statement, statement of changes in shareholders’ equity, cash flow statement and the related
explanatory notes, of Tiscali S.p.A. and its subsidiaries (the Tiscali Group) as of and for the year
ended 31 December 2008. The Company’s directors are responsible for drawing up the consolidated
financial statements in compliance with the International Financial Reporting Standards adopted by
the European Union, as well as the instructions issued by way of implementation of Article 9 of
Italian Legislative Decree No. 38/2005. Our responsibility is to express an opinion on these financial
statements based on our audit.
2. Our audit was made in accordance with the auditing standards and principles recommended by
CONSOB for accounts auditing. In accordance with such standards, we planned and performed our
audit to obtain the information necessary in order to determine whether the consolidated financial
statements are materially misstated and if such financial statements, taken as a whole, may be
relied upon. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, as well as assessing the appropriateness and correctness of
the accounting policies applied and the reasonableness of the estimates made by the directors. We
believe that our audit provides a reasonable basis for our opinion.
For the opinion on the previous year’s financial statements, whose balances presented for
comparative purposes have been reclassified mainly as a result of the representation of the result
of the operating assets sold off, as described in the section “Form and content of the accounting
statements” in the explanatory notes , reference should be made to the report issued by another
auditor dated 11 April 2008. The reclassification methods and the disclosure presented in the
explanatory notes have been examined by us for the purpose of expressing our opinion on the
consolidated financial statements as of and for the year ended 31 December 2008.
3. The Tiscali Group ended the accounting period with a loss of EUR 271.1 million and with consolidated
shareholders’ equity of EUR 4.8 million. Furthermore, as of 31 December 2008 the Group disclosed
gross financial debt of EUR 644.8 million and, as of the same date, the levels of the financial
covenants envisaged by certain loan agreements were not observed. This circumstance led to the
reclassification under current liabilities of the medium/long-term loans, in accordance with the
reference accounting standards. The Group’s equity and financial position was also characterized by
non-current assets for a total of EUR 890.9 million, inclusive of goodwill for EUR 438.8 million and
other intangible assets for EUR 191.9 million, and the balance between current assets and liabilities
presented a negative balance of EUR 691.1 million. With regard to significant events after the end of
the year, the Directors report that the Group has suspended the payments envisaged within the
sphere of the loan agreements outstanding and has not, therefore, repaid principal and interest
instalments for EUR 35 million falling due in March 2009.