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ANNUAL FINANCIAL
REPORT/REGISTRATION
DOCUMENT
Fiscal year 2008-2009
ATARI (formerly Infogrames Entertainment)

Table of contents

  • Page 1
    ANNUAL FINANCIAL REPORT/REGISTRATION DOCUMENT Fiscal year 2008-2009 ATARI (formerly Infogrames Entertainment)

  • Page 2
    .... ï,· CONSOLIDATED FINANCIAL STATEMENTS FISCAL YEAR ENDED MARCH 31, 2009 Note to the reader: The English language version of this report is a free translation from the original, which was prepared in French and is available on the company‟s corporate website ( http://corporate.atari.com). In the...

  • Page 3
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT CONTENTS GENERAL INFORMATION 4 CORPORATE PROFILE 4 STRATEGY 6 HISTORY 8 THE MARKET FOR INTERACTIVE ENTERTAINMENT SOFTWARE 9 BUSINESS 11 FRANCHISES AND LICENSES 12 MATERIAL CONTRACTS 12 CAPITAL PROJECTS 14 FUTURE PROSPECTS 15 RISK EXPOSURE ...

  • Page 4
    ... and online operations - particularly through Cryptic Studios Inc. - and US publishing and licensing businesses. As part of this transformation, in May 2009 the Company changed its corporate name from Infogrames Entertainment to Atari. In doing so, it was able to make the best use of the Atari brand...

  • Page 5
    ... the Namco Bandai Partners business, which was in the process of sale as of March 31, 2009, is reported on the line "Profit (loss) from discontinued operations" as from April 1, 2007. Group revenue and current operating income for fiscal year 2007-2008 and 2008-2009 exclude the Namco Bandai Partners...

  • Page 6
    ... driving franchises, MMOs and classic Atari games covering the entire history of the video game industry. The Company also announced plans to reduce costs to better support the Company‟s strategy. The Group‟s strategy is based on four key priorities: 1- Developing and growing online publishing...

  • Page 7
    ...a key driver to develop traffic, with the availability of new Atari games as well as Atari classics spanning the entire history of video games (Pong, Missile Command, Asteroids, etc.). An extended catalog of popular Atari games, based on: o Original franchises (Test Drive, Alone in the Dark, V-Rally...

  • Page 8
    ... the signing of a strategic partnership between the Company‟s subsidiary Atari Europe and Namco Bandai Games Europe, under which Namco Bandai Games Europe acquires a 34% stake in the new entity, Namco Bandai Partners (the transaction is completed in February 2009). Namco Bandai Partners is created...

  • Page 9
    ...director. In early July 2009, Atari completes the sale to Namco Bandai Games Europe of Atari Europe‟s remaining 66% stake in Namco Bandai Partners for a cash consideration of approximately â,¬36.3 million. THE M ARKET FOR INTERACTIVE ENTERT AINMENT SOFTW ARE The interactive entertainment software...

  • Page 10
    ... as well as free games and games that can be tested before buying the full version. The online segment is the industry‟s fastest growing segment. On top of online games on PC, more and more customers connect to the web via consoles. Internet is a good way to offer customers new weekly services and...

  • Page 11
    ...as PC or smartphone games, but with the increased popularity of Wii, consoles are increasingly attractive for online gaming companies. BUSINESS The Group publishes, produces and distributes interactive entertainment software for the leading interactive systems on the market. PUBLISHING, PRODUCTION...

  • Page 12
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT FRANCHISES AND LICENSES The Group's strategy consists in publishing and distributing products for all mass-market interactive systems (game consoles, PCs, online), based on its own original franchises or prestigious licenses, but also optimally ...

  • Page 13
    ... the transaction‟s completion date (early July 2009), Namco Bandai Partners has exclusive retail distribution rights for video games produced by Atari in Europe, Asia (excluding Japan), Africa, the Middle East, Central and South America, Australia and New Zealand. As Atari Europe exercised its put...

  • Page 14
    ... FINANCIAL REPORT - REGISTRATION DOCUMENT In May 2009, Atari Inc. entered into an agreement with Namco Bandai under which Namco Bandai would buy the next releases of Dragon Ball Z for USD 1.9 million in cash and cover the royalties paid to FUNimation, as well as the localization and production...

  • Page 15
    .... In the case of products for PCs (22% of the Group‟s sales worldwide as of March 31, 2009), the risk is limited due to the large number of manufacturing companies in Europe and the United States and their adaptability. On the other hand, the Group does not have control over the manufacture of...

  • Page 16
    ...The signing of a strategic distribution partnership with Namco Bandai Games Europe SAS in September 2008, and the sale to Namco Bandai Games Europe SAS of 34% of its stake in the entity resulting from this partnership, Namco Bandai Partners. In March 2009 the Company exercised its option to sell the...

  • Page 17
    ...31, 2009 France - Holding company Atari SA Namco Bandai Games Eur. SAS 34% Atari Europe SAS Publishing France - 100% Atari UK Publishing Ltd Production England - 100% Production - Publishing US - 100% Atari Interactive Inc. 66% Atari Japan KK Distribution Japan - 100% Distribution Partners...

  • Page 18
    ... STATEMENTS Year ended March 31, 2009 BOARD OF DIRECTORS' REPORT ON THE GROUP'S MANAGEMENT 1. ECONOMIC ENVIRONMENT AND HIGHLIG HTS OF THE YEAR 1.1. ECONOMIC ENVIRONMENT Atari ("the Company" or "the Group") is one of the world's foremost developers and publishers of interactive game software. Most...

  • Page 19
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT 1.2. HIGHLIGHTS OF THE YEAR Changes to the senior management team and the Board of Directors During the last two fiscal years, Atari restructured its senior management team with the appointment of David Gardner - a leading figure in the video game ...

  • Page 20
    ...rights for video games produced by Namco Bandai in Europe, Australia, New Zealand and Africa as well as by Atari in these same regions together with Asia and South America. The sale of the 34% stake in Namco Bandai Partners was completed in February 2009 for approximately â,¬27million on a cash-free...

  • Page 21
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT revenue targets reached (there is no settlement option). The earn-out is partly payable in October 2010 (in cash only) and partly in March 2011 (in cash and newly-issued Atari shares); ï,§ A bonus representing a maximum amount of USD 20 million (...

  • Page 22
    ...Atari but retaining a seat on the Board of Directors of the Company, and the appointment of Jeff Lapin as Chief Operating Officer. New publishing strategy In May 2009, the Company announced a reorganization plan for its publishing operations with the aim of maximizing revenue generated by non-online...

  • Page 23
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Completion of the sale of Atari Europe's 66% stake in Namco Bandai Partners In early July 2009, Atari completed the sale of the remaining 66% interest held by Atari Europe in Namco Bandai Partners. As consideration for the assets sold, Atari received ...

  • Page 24
    ... research and development overhead from Atari Transformation and improved cost management. These savings have been offset by an increased share-based compensation cost and increased marketing spending for certain new major releases in the year such as Alone in the Dark. Gross margin declined (down...

  • Page 25
    ...exchange rates), primarily driven by the growth in distribution of third-party publishers‟ products (such as Zoo and CDV US) as well as increased revenue from Group product sales (in particular Alone in the Dark, The Chronicles of Riddick: Assault on Dark Athena); The publishing business in Europe...

  • Page 26
    ...of the online business, tests and localization as well as certain start-up costs. Marketing and selling expenses Marketing and selling expenses amounted to â,¬19.0 million, compared with â,¬15.6 million for the previous peri od. The additional â,¬3.4 million went into supporting major new publishing...

  • Page 27
    ... fiscal year 2008-2009, this item primarily represent minority interests in Atari Inc.‟s results up unti l October 8, 2008, when the Company bought up these interests, as well as a small amount related to the sale of 34% of the European and Asian distribution business to Namco Bandai Games Europe...

  • Page 28
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Atari‟s adjusted balance sheet does not include the Namco Bandai Partners business and assumes that Namco Bandai Partners‟ sale had been completed as of March 31, 2009. Atari‟s adjusted balance sheet should be considered in addition to, and not ...

  • Page 29
    ...initiated during the period (concerning Atari Inc., Cryptic Studios Inc. and Namco Bandai Partners). Net cash As of March 31, 2009, the Group had a net debt of â,¬56.4 million, compared with a net cash surplus of â,¬48.7 million as of the end of the previous fiscal year. The cash and debt positions...

  • Page 30
    .... The Group's sources of funds during the fiscal year consisted primarily of the following: ï,· â,¬38.6 million in cash financing through the issue of ORANE bonds; ï,· â,¬22.6 million in cash from the sale of the 34% interest in Namco Bandai Partners to Namco Bandai Games Europe; ï,· Borrowings...

  • Page 31
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT 3. PARENT COMPANY BUSINESS INFOGRAM ES ENTERTAINMENT) 3.1. BUSINESS AND FINANCIAL RESULTS (AT ARI, FORM ERLY The Company is the parent entity and head of the Atari Group. It derives most of its revenue (other than investment and interest income) ...

  • Page 32
    ... in provisions for financial risk stemming from its Atari Europe subsidiary‟s negative net worth; ï,· A provision for employee risk for â,¬0.8 million concerning the layoffs carried out as part of the Company's restructuring. The Company had debt of â,¬23.4 million as of March 31, 2009, of which...

  • Page 33
    ... operations prior to Namco Bandai Partners‟ sale to Namco Bandai. As of March 31, 2009, Atari Europe held a 66% stake in Namco Bandai Partners and its subsidiaries based in Europe and Asia. Atari Europe also managed most of the Company‟s European publishing business. However, as part of the...

  • Page 34
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT To the best of the Company's knowledge, share ownership and voting rights broke down as follows as of March 31, 2009: Number of voting Number of shares (%) (%) rights BlueBay Asset Management[1] 4,044,891 31.17 4,044,891 31.14 GLG[2] 644,323 4.97 644,...

  • Page 35
    ... FINANCIAL REPORT - REGISTRATION DOCUMENT Grant shares at the time of exercise of the rights attached to securities providing entitlement to existing Company shares through redemption, conversion, exchange, presentation of a warranty, or otherwise. Grant or sell shares to employees or corporate...

  • Page 36
    ... orientation, the preparation of the Board's work determined by the Board of Directors during the Chairman's term of office, as well as the change in the Company's relative position in its business sector in terms of market share, financial performance and market capitalization. Equal weight will be...

  • Page 37
    ... of the French Commercial Code governing share grants. At this point in time, management anticipates paying bonuses in the form of newly-issued shares. Indemnity in the event of termination The Company‟s Board of Directors has also made certain commitments to the Chief Executive Officer and Chief...

  • Page 38
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Table 10 of AMF recommendations Indemnities and/or benefits due or likely to be due in the event of termination or a change of position Yes No Consideration due under a covenant not to compete Yes No Employment contract Executive corporate officer ...

  • Page 39
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Table 3 of AMF recommendations Directors' fees and other compensation received by non-executive corporate officers (â,¬ thousands) Amount paid during Amount paid during Non-executive corporate officer fiscal year 2007-2008 fiscal year 2008-2009 ...

  • Page 40
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Table 1 of AMF recommendations Compensation, stock options and free shares granted to each executive corporate officer Fiscal year (â,¬ thousands) 2007-2008 David Gardner, Chief Executive Officer Compensation due for the year (see table 2) 601,1 Value...

  • Page 41
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Table 2 of AMF recommendations Summary of amounts due and paid to each executive corporate officer Fiscal year 2007-2008 (â,¬ thousands) David Gardner, Chief Executive Officer Fixed compensation Variable compensation Special compensation Directors' ...

  • Page 42
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT STOCK OPTION PLANS Under each of the plans, the exercise price set by the Board of Directors on the date options are granted carries no discount to the price of shares. It corresponds to the shares‟ average price over the twenty trading days immed ...

  • Page 43
    ANNUAL FINANCIAL REPORT - REGISTRATION ...issue of preemptive rights in connection with the ORANE-BSA issue in December 2008. (2) Members as of March 31, 2009. (3) â,¬103.46 for holders resident in the United States. NB. On May 25, 2009, the Company set up two stock option plans for employees of Atari...

  • Page 44
    ... fiscal year 2008-2009. Table 4 of AMF recommendations Stock options granted during the fiscal year to each executive corporate officer by the issuer or by any other Group company Value of options Name of the Nature of the according to Number of options executive No. and date of options method used...

  • Page 45
    ... companies which were exercised during the fiscal year by the above-described 10 employees Plan 17 316,754 - BOARD OF DIRECTORS' SPECIAL REPORT ON STOCK OPTIONS TO THE ANNUAL AND SPECIAL SHAREHOLDERS' MEETING CALLED TO APPROVE THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2009...

  • Page 46
    ... than corporate officers, who subscribed the largest number of options No shares were acquired by Company employees in fiscal year 2008-2009 through the exercise of stock options granted by the Company or its subsidiaries Paris, July 22, 2009 The Board of Directors SUMMARY OF THE PRINCIPAL FEATURES...

  • Page 47
    ... REPORT - REGISTRATION DOCUMENT BOARD OF DIRECTORS' SPECIAL REPORT ON GRANTS OF PERFORMANCE SHARES TO THE ANNUAL AND SPECIAL SHAREHOLDERS' MEETING CALLED TO APPROVE THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2009 (Prepared in accordance with Article L. 225-197-4 of the French Commercial...

  • Page 48
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT the Group received â,¬36.3 million in cash in relation to the sale by Atari Europe of its 66% stake in Namco Bandai Partners. During and prior to fiscal year 2008-2009 the Group made significant losses that have eroded its equity and cash position. As...

  • Page 49
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT On October 18, 2007, funds affiliated to BlueBay High Yield Investments (Luxembourg) SARL, a Company director, bought out loans outstanding previously extended by Guggenheim Corporate Funding LLC to Atari Inc., with an aggregate value of USD 3 million...

  • Page 50
    ... titles for the new generation of consoles such as the current Microsoft Xbox 360 and Sony Playstation 3 (PS3), which have increased power and online gaming features, or the Nintendo Wii, which has successfully introduced a new way of playing. Increased production costs are due in part to the larger...

  • Page 51
    ... video game publishers are exposed have to do with the inherently short life span of individual games and the speed at which technology evolves. In the highly-competitive interactive entertainment market, where having a hit product is becoming of ever greater importance, the Company‟s financial...

  • Page 52
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT On April 29, 2009, the Delaware Court of Chancery approved the settlement negotiated by the parties, pursuant to which the Company agreed to pay USD 310,000 to the plaintiff. Disputes to which Atari Europe SAS is party BVT production fund v. Atari ...

  • Page 53
    ... specific expertise. The Group is currently adapting its corporate structure as it continues to revamp its publishing strategy. It is looking for personnel with key expertise, notably in the online area and in digital operations. Like most companies in the video game sector, the Group is exposed to...

  • Page 54
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT FINANCIAL RISKS Currency risks The Group has not set up a currency hedging strategy for commercial transactions as there is an overall balance between revenue and expenses in euros and US dollars, which are the Group‟s main operating currencies. ...

  • Page 55
    ... This report covers the entities belonging to the Atari Union d'économie sociale (UES), meaning the holding entity, Atari SA, Atari Europe SAS and Atari France SAS, exclusive of Eden Games SAS and of corporate officers. As of December 31, 2008, the above French entities had a combined 144 employees...

  • Page 56
    ...Atari but retaining a seat on the Board of Directors of the Company, and the appointment of Jeff Lapin as Chief Operating Officer. New publishing strategy In May 2009, the Company announced a reorganization plan for its publishing operations with the aim of maximizing revenue generated by non-online...

  • Page 57
    ... of releases for 2009/2010: Champions Online, the first Massively Multiplayer Online Role-Playing Game (MMORPG) benefiting from Cryptic‟s innovative game engine and its team entirely dedicated to working directly with players in order to provide them with an extraordinary game experience (on PC in...

  • Page 58
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT 13. AT ARI SA FIVE-YEAR FIN ANCIAL SUMMARY 30/06/2004 12 months (â,¬ thousands) Share capital 74,334 Number of common shares outstanding 121 900 566 Cumulative number of preferred shares (without voting rights) outstanding Maximum number of shares to...

  • Page 59
    ... BSA (exercise price of â,¬6) 75 (2) (over the term of the authority) Up to 10% of the share capital (2) Unused Unused 75 15 Use during FY 08/09 Available nominal value (â,¬m) 75 Delegation of authority granted to the Board to issue common stock and securities with rights to shares, with preemptive...

  • Page 60
    ... 860 representing 12 975 860 shares. (2) The ceilings applicable to resolutions 1, 2, 3, 4, 5, 6 and 7 apply to the aggregate nominal value of securities issued under all those resolutions. (3) During May 25, 2009 Board meeting, further use of this delegation, with stock option granted to Jeff Lapin...

  • Page 61
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT CONSOLIDATED FINANCI AL STATEMENTS FOR THE YEAR ENDED M ARCH 3 1, 2009 CONTENTS CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2009 ...61 CONSOLIDATED INCOME STATEMENT ...62 CONSOLIDATED BALANCE SHEET ...63 CONSOLIDATED CASH FLOW ...

  • Page 62
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT CONSOLIDATED INCOME STATEMENT (â,¬ million) Revenue Cost of goods sold Gross margin Research and development expenses Marketing and selling expenses General and administrative expenses Share-based payment expense (**) Current operating income (loss) ...

  • Page 63
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT CONSOLIDATED BALANCE SHEET (â,¬ million) Goodwill Intangible assets Property, plant and equipment Non-current financial assets Other non-current assets Deferred tax assets Non-current assets Inventories Trade receivables Current tax assets Other ...

  • Page 64
    ... IFRS 5, the consolidated cash flow statement for the year ended March 31, 2008 has been restated to present discontinued operations (Distribution Europe and Distribution Asia) on separate lines (see Note 1.5). The following notes form an integral part of the consolidated financial statements. 64

  • Page 65
    ....331.539 stock warrants were allocated free of consideration to shareholders with 100 warrants exercisable for one new share at a price of â,¬15 each. A total of 51.886.483 warrants were exercised during the year ended March 31, 2008, resulting in the issue of 518.865 new shares and generating issue...

  • Page 66
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT (3) In January 2009, the Company issued bonds redeemable for new or existing shares with stock warrants attached (ORANE-BSA), maturing on April 1, 2014 (see Note 1 - Significant events of the year). The bonds have an aggregate nominal value of â,¬40.5...

  • Page 67
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT GENERAL INFORM ATION ABOUT THE GROUP Atari SA (hereinafter "Atari" or the "Company"), formerly known as Infogrames Entertainment SA (see Note 28.2), designs, produces, publishes and distributes interactive entertainment software for a wide range of ...

  • Page 68
    ... In Europe, the sale of Namco Bandai Partners (see Note 1.5), which was completed in early July 2009. ï,· Major cuts in administrative expenses, notably by further reducing staffing levels and restructuring the Company‟s corporate and publishing operations. ï,· Streamlining the Group‟s offices...

  • Page 69
    ... Online video games exceed the targets set by Cryptic. Half of the bonus is payable before the end of November 2010, and the balance before mid-May 2011. At the discretion of Atari, the bonus will be paid in cash, new Atari ordinary shares, or in cash and new Atari shares. The number of Atari shares...

  • Page 70
    ... the impact of the launch of Champions Online - a game developed by Cryptic - scheduled for the second quarter of the year. ï,· Sale of all of the Group‟s Distribution operations in Europe and Asia to Namco Bandai, carried out in two phases: 34% in February 2009 and the remaining 66% in July...

  • Page 71
    ... the Company‟s corporate name from Infogrames Entertainment to At ari. This move will enable the Company to more effectively leverage the Atari brand by capitalizing on its worldwide reputation and its consumer appeal - two factors that are key to implementing the Group's online, product and...

  • Page 72
    ... of Assets from Customers The Group is currently analyzing any future impact of these new standards and interpretations on its financial statements. 2.2. CONSOLIDATION M ETHODS Full consolidation All companies over which the Group exercises control, i.e. over which it has the power to govern the...

  • Page 73
    ... amount and estimated sale price less costs to sell. A discontinued operation is a component of an entity that has either been disposed of, or is classified as held for sale, and represents a separate major line of business or geographical area of operations for the Group; is part of a single co...

  • Page 74
    ..., on a quarterly declining-balance basis that reflects the sales prospects of the products concerned. This use of the declining-balance method means that 90% of a game's value is written off in the year following its release. The Group verifies the recoverable amount of the capitalized sums on...

  • Page 75
    ... are based on the higher of the following values: ï,· present value of projected operating cash flows over a four-year period, plus a terminal value; ï,· the net sale price if there is an active market for the asset. When the sale price less costs to sell cannot be reliably determined, the carrying...

  • Page 76
    ..., as this discount would not have a material impact. 2.18. EMPLOYEE SAVINGS PLANS (PEE) When the Group carries out employee rights issues, an expense is recognized if the offer price of the shares is lower than the market trading price. The expense is calculated at the grant date, corresponding to...

  • Page 77
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT 2.19. MINORITY INTER ESTS If the equity of a consolidated entity is negative at the balance sheet date, the share of minority interests in this deficit is charged to the Group, unless the third parties concerned have an express obligation to cover ...

  • Page 78
    ... rebates granted for early payment. Sales of entertainment software Revenue from the sale of entertainment software is recognized when products are shipped to customers. A provision is set aside and deducted from sales to provide for estimated returns, so as to calculate net sales. The Group is not...

  • Page 79
    ... net income for the year by the weighted average number of shares outstanding, plus all potentially dilutive ordinary shares. Potentially dilutive ordinary shares include those to be issued on the exercise of stock options or warrants, grants of free shares and the conversion of convertible...

  • Page 80
    ... from the derecognition of a portion of the goodwill allocated to the Europe and Asia Distribution CGUs due to the sale of 34% of Namco Bandai Partners (see Note 1 - Significant events of the year). ** Goodwill allocated to the Retail Development/Publishing CGU was written down in full during the...

  • Page 81
    ..., expected trends in sale prices and operating costs. The table below sets out the discount rates and perpetuity growth rates used at March 31, 2009 and March 31, 2008: March 31, 2009 Discount rate Retail Development/Publishing Online Development/Publishing US Distribution Europe Distribution Asia...

  • Page 82
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT NOTE 4 - INTANGIBLE ASSETS Changes in intangible assets for the year ended March 31, 2009 can be analyzed as follows: (â,¬ millions) Gross value April 1, 2008 Changes in scope of consolidation Acquisitions/Increase Disposals/Decrease Reclassification ...

  • Page 83
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT (â,¬ million) Gross value April 1, 2007 Changes in scope of consolidation Acquisitions/Increase Disposals/Decrease Other changes March 31, 2008 Amortization and provisions for impairment in value April 1, 2007 Changes in scope of consolidation Charges...

  • Page 84
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT NOTE 5 - PROPERTY, PLANT AND EQUIPMENT Changes in property, plant and equipment for the year ended March 31, 2009 can be ...Disposals/Decrease Reclassification of assets held for sale Other changes March 31, 2009 Net value April 1, 2008 Changes in scope ...

  • Page 85
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT The table below shows changes in property, plant and equipment for the year ended March 31, 2008: Property, plant and equipment (â,¬ million) Other equipment, furniture and improvements Total Land Buildings Computer hardware Gross value April 1, ...

  • Page 86
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT NOTE 7 - INVENTORIES Inventories broke down as follows at March 31, 2009 and 2008: (â,¬ million) Finished products Gross value Provisions for impairment in value Reclassification of assets held for sale Net value March 31, 2009 33.2 33.2 (9.9) (20.3) ...

  • Page 87
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT NOTE 9 - OTHER CURRENT ASSETS Other assets consist of the following: (â,¬ million) March 31, 2009 March 31, 2008 Prepaid and recoverable taxes and employee-related receivables Prepaid expenses Other Other current assets 5.4 1.3 0.9 7.6 6.9 6.4 ...

  • Page 88
    ... directors and certain employees of the Group, subject to the ceiling set in Article L.225-182 of the French Commercial Code (Code de commerce). The exercise price of these options may not represent less than 95% of the average trading price of the Company's common stock over the twenty trading days...

  • Page 89
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Attributable profit (loss) for the year (â,¬ m illions) 2008-2009 From continuing and discontinued operations - basic From continuing operations - basic Dilutive impact of ORANE bonds Dilutive impact of stock options Dilutive impact of stock w arrants...

  • Page 90
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT (â,¬ millions) Employee-related expenses Rent on unused premises Other Total March 31, 2009 4.8 1.6 0.5 6.9 March 31, 2008 2.4 0.1 2.5 The "Atari Transformation" restructuring plan announced on June 17, 2008 was rolled out during fiscal year 2008 -...

  • Page 91
    ... 2002 to take into account the allocation of free shares on that date. The Company has the option of calling the bonds if, prior to their maturity, the price of Atari common stock rises above a predefined level. A prospectus was published in connection with the bond issue and was approved by the COB...

  • Page 92
    ...take into account the allocation of free stock warrants on that date. The Company has the option of calling the bonds if, prior to their maturity, the price of Atari common stock rises above a pre-defined level. A prospectus was published in connection with the bond issue and was approved by the COB...

  • Page 93
    ... IESA‟s plan to buy out the minority interests in Atari Inc, BlueBay agreed to waive certain financial ratio requirements. BlueBay also approved a USD 20 million financing of Atari Inc. by IESA. As part of the ORANE-BSA issue carried out in January 2009 the Company undertook to pay off the USD 14...

  • Page 94
    ... Pledge of 66% of the shares in Distribution Partners SAS (waived on July 7, 2009 due to the sale of the remaining 66% interest to Namco Bandai Games Europe SAS). ï,· Pledges of certain trademarks and rights relating to certain video games published by Atari Europe SAS. ï,· Pledges of the intragroup...

  • Page 95
    ... downloaded from the Company's website (www.atari.com...America waived its rights in the event of a failure to meet the financial ratios and new covenants were scheduled to be negotiated for subsequent quarters. As of end-March 2009, these negotiations had not been concluded, and accordingly, the Group...

  • Page 96
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT At March 31, 2009, the Group‟s fixed-rate debt consisted primarily of the OCEANE 2020 and 2011 bonds, ORANE bonds and leaseback liabilities. In the event of a 100 basis point increase in ...

  • Page 97
    ... Foreign to net financial exchange Provisions for income Disposals Discounting and other impairment (expense) for the gains and year ended losses March 31, 2009 Interest and charges (â,¬ million) Financial instruments at fair value through profit Available-for-sale financial assets Held-to...

  • Page 98
    ...). Accordingly, the Group's primary revenue reporting format is based on geographical segments. No breakdown is provided by business segment within the meaning of IAS 14 as management considers that the whole of the Atari Group operates in the single business segment of "interactive games". 98

  • Page 99
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT (*) Australia is included in the Asia region (**) Including a negative â,¬6.4 million for share-based payments in the Corporate column (***) Goodwill in the Corporate column corresponds to the portion allocated to the Development/Publishing CGU 99

  • Page 100
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT March 31, 2008 United States Internal revenue Finished products Licenses External revenue Total revenue Current operating income (loss)** Restructuring costs Gains (losses) from disposals of assets Proceeds from the sale of the Hasbro license ...

  • Page 101
    ... employees in exchange for the options received. The fair value of stock options is calculated using the Black & Scholes option pricing model, which takes into account the exercise price and period of the options, market conditions on the grant date (risk-free interest rate, share price, volatility...

  • Page 102
    ...The Company grants stock options to officers and senior executives as well as other employees for their contribution to the Group‟s performance. At the grant date, the options‟ exercise price is set close to the trading price of the Company‟s shares. The options granted have an eight-year life...

  • Page 103
    ... OF FREE SHARES In fiscal year 2008-2009 and 2007-2008 the Company used the authorizations given at the Shareholders' Meeting of November 15, 2006 to grant free shares to certain officers and executives. In order for rights to free shares to vest, their beneficiaries must be part of the Group on...

  • Page 104
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Valuation model Maturity date Settlement envisaged by management Share price (in â,¬) Risk-free interest rate Volatility rate Dividend rate Fair value of the plan (â,¬ millions) Monte Carlo March 31, 2013 Payment in shares 11.5 4.75% 69% 0% 10.8 ...

  • Page 105
    ... in the United States (Atari Inc.) and in France. Atari SA and its French subsidiaries set up a consolidated tax group on July 1, 1995. The five-year option for tax consolidation was extended on March 31, 2005. For the years ended March 31, 2009 and 2008 group tax relief amounted to â,¬0.8 million...

  • Page 106
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Tax credits arising from tax loss carryforwards can expire as follows: In more than 1 year but In 5 or more Within 1 year less than 5 years years 163.6 217.4 2.3 1.3 2.4 387.0 (â,¬ million) France US (*) UK Australia Other Total 163.6 217.4 2.3 1.3 ...

  • Page 107
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT (â,¬ million) Revenue from discontinued operations Cost of goods sold Gross profit Research and development expenses Marketing and selling expenses Overhead and administrative expenses Current operating income (loss) - Discontinued operations Gains (...

  • Page 108
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT 22.3. SEGMENT INFORM ATION ON DISCONTINUED OPERATIONS AND ASS ETS AND LIABILITIES HELD FOR SALE (â,¬ million) Year ended March 31, 2009 United States Europe 129.8 (47.1) (83.8) Asia 30.2 2.8 (7.0) Eliminations (0.4) Total 159.6 (44.3) (90.8) Revenue ...

  • Page 109
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT NOTE 23 - BUSINESS COMBINATION On December 12, 2008 the Group acquired Cryptic Studios Inc., one of the world's leading developers, publishers and operators of Massively Multiplayer Online (MMO) games. Located in the United States, this company has a ...

  • Page 110
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT newly-issued Atari ordinary shares, with the settlement procedures determined by the Company. At March 31, 2009 the maximum potential number of new shares to be issued for the bonus payment was 3.558.963. The Group could therefore be required to pay a...

  • Page 111
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT NOTE 25 - M ANAGEMENT OF M ARKET RISKS 25.1. RISK M ANAGEMENT Risk exposure is handled by the Group‟s parent company based on conditions in the financial markets and in accordance with procedures set by management. Foreign currency transactions are...

  • Page 112
    ... companies, financed the production of certain interactive game titles. Following exchanges of correspondence and an audit in December 2008, the BVT funds instituted proceedings in March 2009 in Germany, claiming the breach by Atari Europe of several contractual obligations arising from publishing...

  • Page 113
    ...40.5 million. Atari undertook to pay the legal and financial fees incurred by BlueBay in connection with this transaction for up to â,¬0.8 million. ï,· BlueBay had undertaken that if the negotiations with Banc of America to extend the current â,¬15 million credit facility are not successful, it will...

  • Page 114
    ... that are key to implementing the Group's online, product and licensing strategies. The Atari share is still listed on NYSE Euronext Paris under the same ISIN code (FR0010478248) but its ticker has been changed to ATA. 28.3 NEW PUBLISHING STRATEGY In May 2009, the Company announced a reorganization...

  • Page 115
    ... % control Company A+ Multimedia Ltda Atari Asia Holding Pty Ltd Atari Asia Pacific Pty Ltd Atari Australia Pty Ltd Atari Benelux BV Atari Denmark Atari Deutschland GmbH Atari do Brasil Ltda Infogrames Entertainment GmbH Atari Europe SAS Atari France SAS Atari Hellas EPE Atari Inc. Atari Interactive...

  • Page 116
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT STATUTORY AUDITORS' REPORT ON THE CONSOL IDATED FINANCIAL STATEMENTS Year ended March 31, 2009 This is a free translation into English of the Statutory Auditors‟ report issued in French and is provided solely for the convenience of English speaking ...

  • Page 117
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT III. SPECIFIC VERIFICATION As required by law we have also verified the information given in the Group‟s management report. We have no matters to report regarding its fair presentation and conformity with the consolidated financial statements. Lyon ...

  • Page 118
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT INFORM ATION CONCERNI NG THE PARENT COMPANY ANNUAL FINANCIAL STATEMENTS 1. BALANCE SHEET (â,¬ thousands) Assets Intangible assets Property, plant and equipment Financial fixed assets Total fixed assets Trade receivables Other receivables Cash and cash...

  • Page 119
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT 3. CASH FLOW STATEMENT (â,¬ million) Cash flow from operating activities Income (loss) for the year Charges to (reversals from) depreciation, amortization and provisions (Losses) gains on disposals of assets Other (gains) losses with no cash impact ...

  • Page 120
    ... of the Company‟s corporate operations. This cost-saving plan is expected to be completed by the third quarter of fiscal year 2009-2010. 1.4. Sale of distribution operations in Europe and Asia (PAL) In September 2008, Atari Europe and Namco Bandai Games Europe SAS (Namco Bandai) signed a letter of...

  • Page 121
    ... exercise its option to sell its 66% interest in Namco Bandai Partners to Namco Bandai. 1.5. Expansion of the Group's online publishing operations In September 2008, Atari announced the creation of a new in-house game development studio placed under the creative and production leadership of Paulina...

  • Page 122
    ...through an issue of "ORANE BSA" bonds in January 2009. The management forecast for 2009 -2010 includes the impact of the launch of Champions Online scheduled for the second quarter of the year. ï,· Sale of all of the Company‟s Distribution operations in Europe and Asia to Namco Bandai, carried out...

  • Page 123
    ... the Company‟s corporate name from Infogrames Entertainment to Atari. This move will enable the Company to more effectively leverage the Atari brand by capitalizing on its worldwide reputation and its consumer appeal - two factors that are key to implementing the Group's online, product and...

  • Page 124
    ... by those subsidiaries. Following the change in ownership of Namco Bandai Partners, parent company of Atari France SAS, Atari France SAS ceased to be a member of the tax consolidation group with retroactive effect from April 1, 2008. Atari France will pay its own income taxes as of April 1, 2008...

  • Page 125
    ... in subsidiaries and associates corresponds to the sale of Namco Bandai Partners' Brazilian and Italian subsidiaries. Changes in receivables from investments during the year mainly consist of the â,¬33.7 million increase in receivables from Atari Interactive Inc. and advances to Cryptic Studios in...

  • Page 126
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT 5. Trade receivables (â,¬ thousands) Trade receivables - external - intra-group - accrued Total March 31, 2009 Gross 21 2,321 1,093 3,435 Impairment Net 21 2,321 1,093 3,435 March 31, 2008 Net 6 226 310 542 All of the above receivables are due ...

  • Page 127
    ... carrying double voting rights. 9.2. Atari stock option plan The Board of Directors has been authorized, until November 27, 2010, to grant options for new or existing common shares of the Company to officers, directors and certain employees of the Group, subject to the ceiling set in Article L 225...

  • Page 128
    ... free shares In fiscal year 2008-2009 and 2007-2008 the Company used the authorizations given at the Shareholders' Meeting of November 15, 2006 to grant free shares to certain corporate officers and executives. In order for rights to free shares to vest, their beneficiaries must be part of the Group...

  • Page 129
    ...of â,¬100 each. The bonds bear annual interest at 0.5%. Following the public exchange offer relating to the January 4, 2008 bond issue, on February 11, 2009, the Company issued bonds redeemable for new or existing shares, maturing April 1, 2014. The nominal value of the bond issue was â,¬147,987,100...

  • Page 130
    ... into 55,106 Atari shares, with none of said bonds held by the Company at March 31, 2009 or 2008. 12.3. ORANE 2009-2014 bonds In connection with the public exchange offer that ran from December 30, 2008 to January 27, 2009, the Company issued 1,479,871 ORANE 2009 bonds with a nominal value of â,¬100...

  • Page 131
    ... into account the allocation of free stock warrants on that date. The Company has the option of calling the bonds if, prior to their maturity, the price of Atari common shares rises above a pre-defined level. A prospectus was published in connection with the bond issue and was approved by the COB...

  • Page 132
    ... conditions: ï,· the maximum number of new Atari shares that may be issued on the automatic conversion of the Category A CBs will be determined based on the online revenue generated by Atari for the Champions Online video game during a six-month period commencing in October 2009 (as set out in the...

  • Page 133
    ... by offsetting. The exact number of new shares to be issued will be determined based on the revenue generated for the Champions Online and Star Trek Online video games. The amount of the debt will be indexed to upward or downward changes in the reference price for Atari shares between the completion...

  • Page 134
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT 14. Operating liabilities (â,¬ thousands) Trade payables Personnel Employee benefits Corporate income tax Other tax and employee related liabilities Other liabilities Total March 31, 2009 17,928 1,234 360 531 90 555 20,698 March 31, 2008 5,869 286 1,...

  • Page 135
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT For the fiscal year ended March 31, 2009, the Company paid aggregate compensation to members of the Board of Directors of â,¬929,000 (no directors‟ fees were paid during the fiscal year), compared with â,¬8,398,000 for the fiscal year ended March 31...

  • Page 136
    ... of corporate income tax between regular income and nonrecurring income is not relevant. The Company heads up a tax consolidation group (Article 223 A et seq. of the General Tax Code) that includes Atari Europe, I Music, Eden Games and Atari Publishing. For the fiscal year ended March 31, 2009 tax...

  • Page 137
    ... the shares in Distribution Partners SAS (waived on July 7, 2009 due to the sale to Namco Bandai Games Europe SAS of the remaining 66% interest). ï,· Pledges of certain trademarks and rights relating to certain video games published by Atari Europe SAS; ï,· Pledges of the intra-group receivables of...

  • Page 138
    ... million 23.1.4. Commitments to corporate officers and directors Undertaking to pay additional bonuses In the last quarter of fiscal year 2008-2009, the Company set up an additional incentive bonus scheme for two of its executives, based on the Company‟s market capitalization. The maximum amount...

  • Page 139
    ... on its earnings or financial position. 24.1. Litigation between a former employee and the Company A significant case arose in a previous year, in which the Company was sued by a former employee who claimed that he had co-authored one of the Group's best-selling franchises. The plaintiff claimed...

  • Page 140
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT 25.3. Disputes to which Atari Europe SAS is party 25.3.1. BVT production funds v. Atari Europe SAS This dispute concerns two German entities, BVT productions funds, which, pursuant to a series of agreements entered into with various Group companies, ...

  • Page 141
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT 25.4.4. Stanley v. IESA, Atari Inc. and the members of th e Atari Inc. Board of Directors This dispute is described above. 25. Consolidating entity The Company publishes consolidated financial statements. 26. Subsidiaries and associates Amount ...

  • Page 142
    ...being wound down. As of March 31, 2009, the Company has set aside provisions for all of its shares and debt. (3) As of March 31, 2009, the Company has set aside provisions in the financial statements in an amount of â,¬73.2 million for loans and advances made to Atari Interactive Inc. In the case of...

  • Page 143
    ...date, Namco Bandai Partners will have exclusive retail distribution rights for video games produced by Atari in Europe, Asia (excluding Japan), Africa, the Middle East, Central and South America, Australia and New Zealand. 27.7 Changes to the senior management team In May 2009, the Company announced...

  • Page 144
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT STATUTORY AUDITORS' REPORT ON THE FINANCIAL ST ATEMENTS Year ended March 31, 2009 This is a free translation into English of the Statutory Auditors‟ report issued in French and is provided solely for the convenience of English speaking readers. The ...

  • Page 145
    ... and the financial statements. the fair presentation of the information provided in the management report in respect of compensation granted to certain company officers and any other commitments made in their favor in connection with, or subsequent to, their appointment, termination or change...

  • Page 146
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT GENERAL INFORM ATION CONCERNING THE COMPANY NAME AND REGISTERED OFFICE (ARTICLES 3 AND 4 OF THE ARTICLES OF INCORPORATION) Atari S.A. (formerly Infogrames Entertainment SA) Registered office 1, place Verrazzano 69252 Lyon Cedex 09, France Telephone: +...

  • Page 147
    ... the Board of Directors and holding the title of Chief Executive Officer. The Board of Directors chooses between the two modes of management and the option it selects remains in effect for at least one year. RIGHTS ATTACHED TO SHARES (ARTICLE 11 OF THE ARTICLES OF INCORPORATION) Each share entitles...

  • Page 148
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Dividends are paid on the date and at the location set by the Shareholders‟ Meeting or, failing which, by the Board of Directors, no later than nine months after the end of the fiscal year. The Board of Directors may distribute one or more interim ...

  • Page 149
    ... five trading days after any such threshold has been crossed and must state the number of securities held with a present or future right to equity and the number of attached voting rights. Mutual fund management companies must report this information for the aggregate number of the Company's shares...

  • Page 150
    ..., 2009 and renew the authorizations set forth below. The Extraordinary Shareholders' Meeting of November 15, 2006 authorized the Board of Directors, for a period of 38 months, to grant free shares to employees and corporate officers of the Company and its associates, with the total number of new or...

  • Page 151
    ...vii) the issue of pre-emptive subscription rights in connection with the ORANE-BSA issue in December 2008. (2) Members as of March 31, 2009. (3) â,¬103.46 for holders resident in the United States. NB. On May 25, 2009 the Company set up two new stock option plans for Atari Inc. employees. Under the...

  • Page 152
    ... features of Atari share grant plans currently in effect are described in section 7 "Corporate officers" of "Information on management and the financial statements". 2000-2011 bonds convertible into or exchangeable for new or existing shares (OCEANE 2000 2011) On May 18, 2000, the Company issued...

  • Page 153
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT The conversion and/or exchange ratio was adjusted to 2.091 shares per OCEANE 2003-2009 bond following the rights issue of January 2007, then to 2.401 shares per OCEANE 2003-2009 bond following the distribution of free stock warrants to all ...

  • Page 154
    ... conditions: ï,· the maximum number of new Atari shares that may be issued on the automatic conversion of the Category A CBs will be determined based on the online revenue generated by Atari for the Champions Online video game during a six-month period commencing in October 2009 (as set out in the...

  • Page 155
    ... up by set-off. The exact number of new shares to be issued will be determined based on the revenue generated for the Champions Online and Star Trek Online video games. The amount of the debt will be indexed to upward or downward changes in the reference price for Atari shares between the completion...

  • Page 156
    ...change in line with fluctuations in the Company's share price and the euro-dollar exchange rate). After taking into account these issues, the potential number of shares outstanding would be 46,596,774. NB. On May 25, 2009 the Company set up two new stock option plans for Atari Inc. employees. Under...

  • Page 157
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT CHANGES IN THE COMPANY'S CAPITAL OVER THE PAST FIVE YEARS Cumulative number of shares outstanding Date and type of transaction 2004-2005 03/31/2004 Exercise of stock warrants 06/30/2004 Conversion of OCEANE 2004 bonds 01/04/2005 Exercise of stock ...

  • Page 158
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Changes in the Company's capital over the past five years (cont'd) Date and type of transaction 11/12/2008 Conversion of ORANE bonds (15) 11/30/2008 Exercise of stock warrants (15) 12/31/2008 Exercise of stock warrants (15) 02/28/2009 Exercise of ...

  • Page 159
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT (1) As part of the Company's debt restructuring plan and in order to fulfill its obligations arising from the maturity of the OCEANE 20002005 bonds, on December 17, 2004, 121,900,566 stock warrants were issued and distributed fr ee of consideration to...

  • Page 160
    ... Grant or sell shares to employees and corporate officers with respect to Company profit-sharing, or the implementation of stock option plans, free share plans, an employee savings plan or any other means provided for by current legislation. ï,· Improve the stock‟s liquidity as part of a liquidity...

  • Page 161
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT TRADING BY CORPORATE OFFICERS IN SHARES AND OTHER SECURITIES (ARTICLE L. 621-18-2 OF THE FRENCH MONETARY AND FINANCIAL CODE) Name and position on the transaction date BlueBay Asset Management Plc Member of the Board of Directors Pascal Cagni Member of...

  • Page 162
    ...Eden Games SAS, Atari Interactive, Inc., Atari Inc., and Atari Europe SAS, (ii) certain trademarks and elements making up games published by Atari Europe SAS, (iii) 66% of the 2 shares of Distribution Partners SAS ( ), and (iv) receivables held by certain subsidiaries on other Group companies. Atari...

  • Page 163
    ... any member of the Group), without issuing an equivalent pari passu security in favor of the lender or creating an equivalent security interest. Guarantees given by the Company and Atari Europe SAS In connection with the financing of its operations, the Company has given parent-company guarantees to...

  • Page 164
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT INFORM ATION ON TRADI NG IN THE COMPANY'S SHARES Paying agent: CACEIS Corporate Telephone: +33(0)1.57.78.00.00 Trust, 14, rue Rouget de Lisle, 92130 Issy-les-Moulineaux. COMMON STOCK - ISIN CODE: FR0010478248 The Company's stock is traded on Euronext...

  • Page 165
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT 2009 STOCK WARRANTS - ISIN CODE: FR0010690099 Monthly highs and lows High Low (euros) (euros) 2009 January February March April May June (Source: Euronext) 2.640 4.445 4.835 4.600 3.600 3.300 2.400 1.494 1.510 2.979 2.760 2.620 Value of shares traded ...

  • Page 166
    ... FINANCIAL REPORT - REGISTRATION DOCUMENT OCEANE 2003-2020 BONDS (PREVIOUSLY 2003-2009) - ISIN CODE: FR0010032839 As stated above, by decision of the Bondholders' Meeting of September 29, 2006, the maturity date of OCEANE 20032009 bonds not tendered under the public exchange offer by the Company...

  • Page 167
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT CORPORATE GOVERNANCE M ANAGEMENT, SUPERVISORY AND OVERSIGHT BO DIES On June 30, 2009 the Board of Directors had nine full members and three employee representatives Frank E. Dangeard, director, non-executive Chairman of the Board of Directors; ...

  • Page 168
    ... Current offices and positions ï,· Managing Director of Harcourt Director of the following companies: - Calyon (Crédit Agricole Group) - Electricité de France (EDF) - Moser Baer (India) - Sonaecom (Portugal) - Symantec (USA) ï,· Member or Chairman of the Advisory/Strategy Boards of a number...

  • Page 169
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Name Date of appointment Expiration of directorship* Main function in the Company Main position currently held outside the Company Other offices and positions held over the past five years ï,· ï,· until December 2007 Member of the Supervisory ...

  • Page 170
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Name Date of appointment Expiration of directorship* Main function in the Company Main position currently held outside the Company N/A Other offices and positions held over the past five years Phil Harrison March 2, 2008 Shareholders‟ ...

  • Page 171
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Name Date of appointment Expiration of directorship* Main function in the Company Main position currently held outside the Company Other offices and positions held over the past five years the year ending March 31, 2012 30, 2008 to March 15, ...

  • Page 172
    ... of the Supervisory Board of Metaboli SA. Offices and positions held over the past five years: Chairman of the Board of Directors of Insko Entertainment Ltd., director of Infogrames Entertainment and Interactive Partners, Managing Director of Interactive Finance SA and Game Production Fund SA. 172

  • Page 173
    ... REPORT - REGISTRATION DOCUMENT EMPLOYEE REPRESENTATIVES (ELECTED BY THE WORKS' COUNCIL MEETING OF THE ATARI ECONOMIC AND SOCIAL UNIT ON JANUARY 12, 2007) Nadège de Bergevin, Senior Producer (management staff) Jean-Yves Lapasset, Consultant (Game Analyst) (technical staff) The Board of Directors...

  • Page 174
    ... a new development studio in London, the partnership agreement entered into with Namco Bandai Games Europe SAS which resulted in the sale of the Europe distribution business, and the corporate name change, (iv) the optimization of its structures and particularly the acquisition of Atari Inc. shares...

  • Page 175
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT COMPENSATION OF DIRECTORS AND CORPORATE OFFICERS This information can be found in section 7 of the chapter "Information on management and the financial statements". STATUTORY AUDITORS' FEES Year ended March 31, 2009 PIN Associés Deloitte & Associés...

  • Page 176
    ... to which he would be entitled in the event of termination. Should Mr. Gardner leave his position of Chief Executive Officer on "good -leaver" terms, the Company undertakes to pay him severance compensation equal to 12 months of his basic gross annual salary as at the date of departure, plus 50% of...

  • Page 177
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT 2. DETERMINATION OF MICHEL COMBES' TERMS AND CONDITIONS OF SEVERANCE IF TERMINATION OCCURS AS THE RESULT OF A SIGNIFICANT MERGER OR ACQUISITION The Board of Directors has set the terms and conditio ns of Michel Combes‟ appointment as Chairman of the...

  • Page 178
    ... planning, the preparation of the Board's work as determined by the Board of Directors during his term of office as Chairman, as well as changes in the Company's positioning in its business sector in terms of market share, financial performance and market capitalization. The foregoing agreement had...

  • Page 179
    ... statements for the year ended March 31, 2009. 2) BlueBay undertook to grant the Company a shareholder loan of â,¬15 mill ion, from February 28, 2009, in the event that the Company‟s strategic partnership with Namco Bandai Games Europe SAS and the proposed factoring facility had not been set up by...

  • Page 180
    ... 2007. The Board of Directors authorized the acquisition of the aforementioned credit facility, using proceeds from the ORANEBSA issue, in order to reorganize Atari Inc. and streamline the Group's financing structure. As part of the January 2009 ORANE-BSA issue, the Company undertook to pay off the...

  • Page 181
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Authorized by the Board of Directors on February 12, 2009. Interested parties: Eugene Davis and BlueBay Asset Management, represented by Jeff Lapin. 5.12. AMENDMENT OF THE CREDIT FACILITY AGREEMENT ENTERED INTO WITH BANC OF AMERICA The Board of ...

  • Page 182
    ... of executive corporate officers of listed companies (the "AFEP-MEDEF code"). This AFEP-MEDEF code is available through the MEDEF website (www.medef.fr). This report refers to the Board of Directors‟ Management Report included in the Company's Registration Document for the year ended March 31...

  • Page 183
    ... a new development studio in London, the partnership agreement entered into with Namco Bandai Games Europe SAS which resulted in the sale of the Europe distribution business, and the corporate name change, (iv) the optimization of its structures and particularly the acquisition of Atari Inc. shares...

  • Page 184
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT ï,· The Strategy Committee As of March 31, 2009, the committee members were Frank E. Dangeard and Jeff Lapin. Prior to the approval of the annual and consolidated financial statements for the year ended March 31, 2009, the Board of Directors, the ...

  • Page 185
    ...'s financial information. The Company has also corrected weaknesses in internal control that were identified at the end of the previous year. Risk factors are reviewed in section 8 of the Board of Directors‟ Management Report included in this Registration Document (see "Risks to which the business...

  • Page 186
    ... implemented in fiscal year 2007-2008. In its 10-K report filed July 1, 2008, the management of Atari Inc. concluded that the Group had remedied the three internal control shortcomings identified at the end of fiscal year 2006-2007. Reporting procedure The Group's financial management is in charge...

  • Page 187
    ... by the Board of Directors. (6) Self-assessment of internal control procedures During the year ended, financial management focused primarily on priority issues, such as the acquisition of Cryptic Studios Inc., the sale of the distribution business in Europe and Asia and the buyout of Atari Inc...

  • Page 188
    ... and submit to the Board of Directors for approval, a report describing the internal control and risk management procedures implemented by the Company and providing the other information required by Article L. 225-37 of the French Commercial Code in particular relating to corporate governance. It is...

  • Page 189
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT Other information We attest that the Chairman‟s report sets out the other information required by Article L. 225 -37 of the French Commercial Code. Lyon and Villeurbanne, July 31, 2009 The Statutory Auditors Pin Associés Deloitte & Associés Jean...

  • Page 190
    ANNUAL FINANCIAL REPORT - REGISTRATION DOCUMENT RECENT DEVELOPMENTS PRESS RELEASE OF JUL Y 24, 2009 REVENUE FOR THE FIRST QUARTER OF FISCAL YEAR 2009-2010 Atari announces 30.1% revenue growth to â,¬54.5 million for the first quarter of fiscal year 2009 -2010 (unaudited data) Lyon - France, July 24,...

  • Page 191
    ...(X-Box 360, in September 2009); o Ghostbusters: The Video Game (in Europe on PC, X-Box360, Wii, DS) and PSP version, in fall 2009; o Champions Online, the first true action Massively Multiplayer Online Role Playing Game (MMORPG) powered by the groundbreaking Cryptic Engine, with Cryptic team devoted...

  • Page 192
    ...) the Board of Directors‟ Management Report on pages 18 to 61 provides a fair review of the business, results of operations and financial position of the Company and its subsidiaries, as well as a description of the principal risks and uncertainties to which they are exposed. I obtained an end-of...

  • Page 193
    ...Hamaide Tel: + 33 (0) 4 37 64 30 00 Information on the Company's business and financial position can be found on its website at http://corporate.atari.com TENTATIVE TIMETABLE (FOR INFORMATION) Annual Shareholders' Meeting: Announcement of fiscal 2009-2010 second-quarter revenues and interim results...

  • Page 194
    ...online game company by selling its 66% interest in Distribution Partners to strategic partner Namco Bandai Games Europe Appointment of Frank Dangeard as non-executive Chairman of Infogrames Entertainment's Board of Directors Revenues for first nine months of fiscal year 2008-2009 Success of exchange...

  • Page 195
    ...the equity issue without preemptive rights - resolution twenty-nine; information document for shareholders; ballot form; practical voting instructions; share ownership certificate. FINANCIAL REPORTS (http://corporate.atari.com and principal office of the Company) Annual Report/Registration Document...

  • Page 196
    ... FINANCIAL REPORT - REGISTRATION DOCUMENT ANNOUNCEMENTS IN THE LEGAL GAZETTE (BULLETIN DES ANNONCES LÉGALES OBLIGATOIRES) (www.balo.journal-officiel.gouv.fr) NOTICES NOTICES OF MEETINGS Shareholders' Meetings NOTICES PERIODIC ANNOUNCEMENTS Industrial and business corporation - (annual financial...

  • Page 197
    ... History and development of the Company 5,2 Investments 6 Business overview 6,1 Principal activities 6,2 Principal markets 6,3 Exceptional factors affecting the information under items 6.1 and 6.2 6,4 Company's dependence on patents or licenses, industrial, commercial or financial contracts or new...

  • Page 198
    ... the Board of Directors and senior management 16,2 Board members' service contracts 16,3 Information regarding the committees 16,4 Statement of compliance with corporate governance regime 16,5 Chairman's internal control report 16,6 Statutory Auditors' report on the Chairman's report 17 Employees 17...

  • Page 199
    ... as listed by article L.451-1-2 of the French Monetary and Financial Code (Code monétaire et financier) 2008-2009 statutory financial statements 2008-2009 consolidated financial statements Board of Directors' 2008-2009 management report Statement by the person responsible for the 2008-2009 annual...

  • Page 200
    1, place Verrazzano 69252 Lyon Cedex 09, France http://corporate.atari.com 200