42
Annual Report -
2013
-
Vivendi
Group Profile | Businesses | Litigation |
Risk Factors
1
Section 4
Risk factors
The Risks Committee regularly assesses potential risks that may impact
the business activities of the Group and the adequacy of the procedures
put in place to protect it against such risks. It informs the Supervisory
Board’s Audit Committee of its main conclusions and decisions.
Vivendi has undertaken a review of the risk factors likely to have a
negative impact on its activities or results. It has not identified any
significant risks outside those presented below.
For a summary of the work of the Risks Committee, please refer to
Chapter 3, Section 3.8 of this Annual Report.
Legal Risks
Risks Associated with Regulations Applicable to the Group’s
Operations
In the ordinary course of its business, Vivendi must comply with laws
and regulations that are complex, restrictive and evolving, particularly
those governing the telecommunications and broadcasting sectors.
Substantial changes in the legislative environment, the application or
interpretation of regulations by the French Competition Authority or by
administrative, judicial or other authorities, particularly with respect
to competition law, tax law, and sundry taxes, may result in Vivendi
incurring additional costs or altering the products and services it offers,
which may materially impact its business, financial position, results and
development prospects.
In addition, certain operations of the Group are dependent upon
obtaining or renewing licenses issued by regulatory authorities, both
in France and outside France, specifically: in France, the
Autorité de
Régulation des Communications Electroniques et des Postes
(Arcep,
the French Telecommunications and Posts Regulator) and the
Conseil
Supérieur de l’Audiovisuel
(CSA, the French Broadcasting Authority);
and in Brazil, the
Agência Nacional de Telecomunicações
(Anatel,
the National Telecommunications Agency). The process of obtaining
or renewing these licenses can be long, complex and costly. Vivendi’s
ability to achieve its strategic objectives may be impaired if it is unable
to obtain or retain in a timely manner the licenses required to conduct,
continue or expand its operations. For a detailed description of the
regulatory environment in which the Group operates, please refer to
Section 2 of this chapter.
Litigation Risks
The Group is involved in, or likely to become involved in a number of
lawsuits or investigations brought against it by subscribers, consumer
associations, competitors, and shareholders or regulatory and tax
authorities. If the Group fails to negotiate an amicable settlement in
any of them, it may be ordered to pay damages and interest or financial
penalties.
For a description of the main legal proceedings or investigations in
which the Group is involved, please refer to Note 28 of the Appendix to
the Consolidated Financial Statements (Chapter 4 of this Annual Report)
and the “Litigation” section of this chapter.
Vivendi creates a provision for expenses that may result from
proceedings whenever a risk is determined and is likely to materialize,
and when the cost of such risk can be quantified or estimated within a
reasonable margin. The occurrence of an ongoing event may result, at
any time, in a reappraisal of the risk. With the exception of the main
legal proceedings and investigations described in this section and in
Note 28 to the Consolidated Financial Statements (Chapter 4 of this
Annual Report), Vivendi considers it unlikely that current proceedings
will have a material negative impact on the Group’s financial position.
Risks Associated with Vivendi’s Contractual Commitments
Vivendi and its subsidiaries have made a number of conditional
commitments, the most important of which are described in Note 27
of the Appendix to the Consolidated Financial Statements for the year
ended December 31, 2013. Some of these commitments are unlimited
in their duration or amount. If Vivendi had to make a payment to satisfy
one or more of these commitments, this may have a negative impact on
its financial results and financial position.
