Atari 2012 Annual Report Download - page 35

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
35
floating interest rates amounted to €24.2 million.
In the event of a 100 basis point increase in interest rates, the resulting additional interest expense for the year ended
March 31, 2012 would have been approximately €0.3 million or 11.3% 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.
The table below shows the nature of interest on the Group's debt:
As of March 31, 2012, the fixed-rate debt consisted primarily of the OCEANE 2020 and ORANE bonds.
The table below shows the Company’s exposure to currency risks before and after hedging transactions.
March 31, 2012
Bond debt
Bank debt
Other debt and
borrowings
Net exposure after
hedging
Fixed
rate
Floating
rate
Fixed
rate
Floating
rate
Fixed
rate
Floating
rate
Fixed
rate
Floating
rate
Less than one year
24.2
24.2
One to two years
0.7
0.7
Two to three years
0.6
0.6
Three to four years
0.1
0.1
Four to five years
0
More than five years
0.6
0.6
Total
2.0
24.2
2.0
24.2
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.
RISKS STEMMING FROM POTENTIAL DILUTION
The Company has issued a significant amount of dilutive instruments, as set forth in section “Information concerning the
potential dilution of the Company’s capital”, of this document. As of March 31, 2012, these instruments had a potential
dilutive effect of 140%. A shareholder with 1% of the Company’s capital on March 31, 2012 would potentially see his
holding drop to 0.4% if all dilutive instruments were to be exercised and if he was not in a position to maintain his interest
in the Company.
For information, as of March 31, 2012, BlueBay held 29.2% of the Company’s capital on a non-diluted basis, and owned
up to 64.4% of the shares and 64.3% of the voting rights on a fully diluted basis.
RISKS RELATED TO LICENSES
Although third party licenses are not material to the Group, in some cases it depends on licensing agreements for
themes (characters, stories, trademarks, etc.) where it must remain in full compliance with applicable agreements.
Accordingly, apart from financial considerations, the term and renewal of licenses for themes obtained by the Group
depend on the conditions applicable to the reproduction and exploitation of the theme features concerned.
Given the fact that no single license used by the Group accounted for more than 13.2% of consolidated revenue in Fiscal
Year 2011/2012, the Group considers that the loss of a license (non-renewal or cancellation) would not by itself have a
material impact on the Group's business or income. Nevertheless, the simultaneous loss of several licenses would be
likely to have a material adverse impact on the Group's financial position, business and income if such loss was not
offset by new licenses with an equivalent economic impact on its business.
The Group relies on licenses granted by hardware (console) manufacturers for part of its business. These agreements
are for average terms of three years and enable the Group to develop products for use on a proprietary medium (PSP,
Xbox 360, PS3, Wii, IPhone, etc.). Licensing agreements require that the Group provide a guarantee against claims that
may be lodged against the manufacturers in connection with these products. The guarantees cover the content,
marketing and distribution of its products, including infringements of intellectual property rights held by third parties. On
the other hand, no licenses are required for products in PC-compatible format.
RISKS RELATED TO THE VIDEO GAME BUSINESS
Risks of change in Business Model
The Group is transitioning into a new business model, shifting from primarily a retail game model to a model focused on
(€ illio) March 31, 2012 March 31, 2011
Floating rate 24.2 42.8
Fixed rate 2 9.6
Total 26.2 52.4