Tiscali 2008 Annual Report Download - page 160

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10 INDEPENDENT AUDITORS’ REPORT TO THE STATUTORY FINANCIAL STATEMENTS
As more fully illustrated in the Report on Operations and the explanatory notes in the section
"Assessment of the business as a going-concern and business outlook and prospects", please
note that the Company has launched negotiations with the financial institutes with the aim of
reaching an agreement for restructuring the financial debt which, in the opinion of the
Directors, should make it possible to define a new structure of the current debt consistent with
the cash flow projections of the 2009 – 2013 Business Plan, whose guidelines were approved by
the Board of Directors on 27 March.
The Directors have indicated that uncertainty exists with regard to the assumption of the
Group’s business continuity, but they have adopted the assumption of the business as a going-
concern in the financial statements, deeming that there is a reasonable probability of reaching
an agreement with the financial institutes.
Nevertheless, the positive conclusion of these negotiations and the achievement of the afore-
mentioned financial debt restructuring agreement are essential elements for overcoming the
uncertainties expressed with regard to the assumption of the business continuity.
Furthermore, as referred to in the explanatory notes, in the section "Critical decisions in
applying accounting standards and in the use of estimates", the Directors reveal that the
capacity to achieve the new 2009 - 2013 Business Plan and, therefore the profit and cash flow
forecasts on the basis of which the recoverability of the main asset items has been assessed, is
subordinate to the occurrence of the conditions described under " Assessment of the business
as a going-concern and business outlook and prospects ". Therefore the consolidated financial
statements do not include adjustments for possible future effects on the recoverability and
classification of the assets and liabilities which could derive from the definition of the described
uncertainties.
Therefore, significant uncertainties remain such that they do not permit us to draw conclusions
on the appropriateness of the outlook of the continuation of the business activities and,
consequently, on the ability of the Tiscali Group to accomplish its activities and meet its
liabilities during the normal course of business
4. In consideration of the importance of the uncertainties described in the previous section, we are
not able to express an opinion on the financial statement of Tiscali S.p.A. at 31 December 2008.
5. For a fuller comprehension of the financial statements, the reader’s attention is drawn to the
matters indicated by the Directors in the explanatory notes regarding the existence of a
number of potentially significant disputes brought by third parties against the Dutch subsidiary
World Online International NV. In May 2007, the Amsterdam Court of Appeal passed sentence,
ascertaining certain responsibility pertaining to World Online International NV, without however
passing sentence with regard to any damages, which will have to form the subject matter of
new and separate proceedings by the damaged third parties, as yet not started up. To-date, the
appeal and the counter appeal are pending before the Dutch Supreme Court against this
sentence. With regard to these disputes, the Directors believe that there are not enough
sufficiently defined elements for quantifying the potential liability and therefore they have
made no provision in the financial statements. The Directors also disclose the existence of
additional situations of risk associated with disputes outstanding or threatened, which they do
not believe will lead to liabilities of a significant amount