Atari 2010 Annual Report Download - page 39

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
39
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 Code)
To our Shareholders,
As required by Article L. 225-197-4 of the French Commercial Code (Code de commerce), we hereby submit to you this
report with information on transactions covered by Articles L. 225-197-1 to L. 225-197-3 of the French Commercial Code.
No stock options were granted to corporate officers or directors by any of its subsidiaries in fiscal year 2009/2010.
Paris, July 22, 2010
The Board of Directors
8. RISKS TO WHICH THE BUSINESS IS EXPOSED
FINANCIAL RISKS
For further information on financial risks, see Note 24 “Management of market risks” to the consolidated financial
statements.
Liquidity, going-concern and operating loss risk
Information on going-concern risk and debt is included in Note 2.1 to the consolidated financial statements in this
Registration Document.
The table below shows the cash-flow statements prepared by the Company for the past three fiscal years:
(€ millions)
Year ended
March 31, 2010
Year ended
March 31, 2009
Year ended
March 31, 2008
Cash flow from (used in) operating activities
o/w continuing operations
(2.2)
(32.5)
(75.8)
(53.7)
(21.4)
(17.3)
Net cash flow from (used in) investing activities
o/w continuing operations
o/w acquisitions of intangible and fixed assets
(0.2)
(22.2)
(24.2)
(56.0)
(78.6)
(47.7)
(24.3)
(24.8)
(37.5)
Net cash flow from (used in) financing activities
o/w continuing operations
of which net interest expense
(9.2)
(3.9)
(4.4)
69.6
67.2
(4.9)
83.7
84.8
(9.7)
Other cash flows*
0.8
-
(1.2)
Net change in cash and cash equivalents
(10.8)
(62.2)
36.8
Net cash flow used in operating activities –
including
acquisitions of intangible and fixed assets
(26.4) (123.5) (58.9)
* Mainly the Impact of changes in exchange rates.
The table above shows that over the past three fiscal years the Company used €208.8 million to finance its operations
and acquire intangible and fixed assets.
During and prior to fiscal year 2009-2010 the Group made significant losses that have eroded its equity and cash
position. At March 31, 2010 shareholders’ equity amounted to a positive €1.9 million, taking into account the €19.4 million
loss recorded for 2009-2010. On that same date, the Group’s net debt was €9.2 million and the Group had unused
drawdown capacity of approximately €44.0 million under its credit facility with BlueBay.
In view of this situation the Group has undertaken (and reached over the second semester of 2009-2010) measures to
refocus its business on online activities and reduce operating costs in order to return to operating profit, generate positive
cash flows and improve working capital. Those measures had their first positive effects in the second half of FY
2009/2010 when the Group published positive net income over that period.
These measures included, among other:
• 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 2009.