Tiscali 2008 Annual Report Download - page 159

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10 INDEPENDENT AUDITORS’ REPORT TO THE STATUTORY FINANCIAL STATEMENTS
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 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. as of and for the year ended 31 December 2008. The Company’s directors are
responsible for drawing up the 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 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 have been presented
for comparative purposes, reference should be made to the report issued by another auditor dated
11 April 2008.
3. Tiscali S.p.A.’s financial statements at 31 December 2008 closed with a loss of EUR 981.3 million and
therefore the shareholders’ equity came to EUR 154.1 million and the Company finds itself in the
circumstances envisaged by Article 2446 of the Italian Civil Code. At the same date, the Tiscali
Group ended the year with a loss of EUR 271.1 million and consolidated shareholders’ equity of EUR
4.8 million, Furthermore, at 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 in the
consolidated financial statements 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.