Experian 2016 Annual Report Download - page 170

168
Notes to the Group financial statements continued
for the year ended 31 March 2016
Financial statements •Notes to the Group nancial statements
40. Contingencies
(a) North America security incident
In September 2015, Experian North America suffered an unauthorised intrusion to its Decision Analytics computing environment
that allowed unauthorised acquisition of certain data belonging to a client, T-Mobile USA, Inc.
Experian has notified the individuals who may have been affected and is offering free credit monitoring and identity theft resolution
services. In addition, government agencies have been notified as required by law.
The one-off costs to Experian of directly responding to this incident are reflected in a US$20m income statement charge in the year
ended 31 March 2016.
Experian has received a number of class actions in respect of the incident and is working with regulators and government bodies as
part of their investigations. It is currently not possible to predict the scope and effect on the Group of these various regulatory and
government investigations and legal actions, including their timing and scale. In the event of unfavourable outcomes, the Group may
benefit from applicable insurance recoveries.
(b) Brazil credit scores
As indicated in our 2014 annual report, the Group had received a significant number of claims in Brazil, primarily in three states,
relating to the disclosure and use of credit scores. In November 2014, The Superior Tribunal of Justice, the highest court in Brazil
for such cases, determined the principal legal issues involved and ruled that the cases had no merit under Brazilian law. Whilst
elements of the legal process have yet to be exhausted and additional related claims could be filed, the directors do not believe that
the outcome of any such claims will have a materially adverse effect on the Group’s financial position. However, as is inherent in
legal proceedings, there is a risk of outcomes that may be unfavourable to the Group.
(c) Ta x
As previously indicated, Serasa S.A. has been advised that the Brazilian tax authorities are challenging the deduction for tax
purposes of goodwill amortisation arising from its acquisition by Experian in 2007. The possibility of this resulting in a liability to the
Group is believed to be remote, on the basis of the advice of external legal counsel and other factors in respect of the claim.
(d) Other litigation and claims
There continue to be a number of pending and threatened litigation and other claims involving the Group, across all its major
geographies, which are being vigorously defended. The directors do not believe that the outcome of any such claims will have
a materially adverse effect on the Group’s financial position. However, as is inherent in legal, regulatory and administrative
proceedings, there is a risk of outcomes that may be unfavourable to the Group. In the case of unfavourable outcomes, the Group
may benefit from applicable insurance recoveries.
41. Principal subsidiary undertakings and related party transactions
(a) Principal subsidiary undertakings at 31 March 2016
Company Principal activity Country of incorporation
Experian Finance plc Holding company and administrative services England and Wales
Experian Holdings Limited Holding company England and Wales
Experian Limited Information services England and Wales
Experian Technology Limited Development of intellectual property England and Wales
Motorfile Limited Information services England and Wales
Serasa S.A. Information services Brazil
Experian Colombia S.A. Information services Colombia
Experian Holdings Ireland Limited Holding company Ireland
Experian Ireland Investments Limited Holding company Ireland
ConsumerInfo.com Inc. Consumer services USA
Experian Health, Inc (formerly Passport
Health Communications, Inc.)
Information services USA
Experian Holdings, Inc. Holding company USA
Experian Information Solutions Inc. Information services USA
Experian Marketing Solutions Inc. Marketing services USA
Experian Services Corporation Administrative services USA
The above table shows the Company’s significant subsidiary undertakings at 31 March 2016 and for the year then ended.
The Company holds direct or indirect interests in the whole of the issued ordinary shares of these undertakings apart from
Serasa S.A., in which its interest is 99.7%. A full list of the Company’s related undertakings, including subsidiary undertakings,
is given in note S to the Company financial statements. There are no significant non-controlling interests.