Atari 2011 Annual Report Download - page 89

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ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
89
fluctuations in euro exchange rates can have an impact on the value in euros of the Group's assets, liabilities, revenue
and expenses outside the eurozone, even if their value in local currencies remains unchanged. The Group’s highest
degree of exposure to currency risks relates to revenue and the earnings of subsidiaries operating in US dollars, as well
as to the value of US dollar denominated intangible assets and goodwill.
An unfavorable change in EUR/USD exchange rate would not have a material impact on the Group’s overall net currency
position. For information purposes, a 1% decline in the value of the US dollar in relation to the euro would have resulted
in a €0.6 million decrease in consolidated revenue in the financial statements for the year ended March 31, 2011 and
would have had respective positive impacts of €0.1 million and €2 million on the consolidated loss for the year and
equity.
The table below summarizes the Company's exposure to the US dollar:
24.3. INTEREST-RATE RISKS
The Group does not have an aggressive interest-rate risk management policy. As of March 31, 2011, borrowings at
floating interest rates amounted to €42.8 million.
In the event of a 100 basis point increase in interest rates, the resulting additional interest expense for the year ended
March 31, 2011 would have been approximately €0.2 million or 10.6% of the cost of consolidated debt at that date.
In view of the afore-described risk sensitivity analysis, the Group considers that a change in interest rates would not have
a material impact on its financial position.
24.4. CREDIT RISKS
The Group has a worldwide customer base and manages its commercial risks so as not to be exposed to excessive
concentration of credit risks.
NOTE 25 CONTINGENT LIABILITIES
In the ordinary course of business, Group entities may be involved in various court, arbitration, administrative and tax
proceedings. Other than litigation referred to in this document, there are no other administrative, legal or arbitration
proceedings, including pending or threatened proceedings of which the Company is aware, that could have or in the last
twelve months have had a material impact on the financial position or income of the Company and/or the Group.
25.1 DISPUTES WITH 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 was seeking damages for moral prejudice and
financial loss suffered as a result of the allegedly unlawful distribution by the Group of games based on that universe.
The claim was for close to €17 million. At this stage of the proceeding, the Company is categorically rejecting the
plaintiff’s claim of authorship and/or co-authorship and considers the grounds and amount of his claim to be unfounded.
The parties have filed their respective briefs with the judge in charge of preparations for the trial, after no significant
progress was made during the Fiscal Year 2010/2011.The preliminary audience’s court started in September 2010. The
audience has been postponed to the summer of 2011 and no court decision is expected before end of 2011.
Based on pending proceedings and the available information, the Company considers the dispute as a contingent liability
as prescribed by IAS 37. Accordingly, no significant provision has been set aside.
(USD millions) March 31, 2011
Total assets 98.8
Total liabilities 55.2
Net 43.6
Off-balance sheet position 21.7
Net position after hedging 43.6