Page 51 - 2012 Annual Report

VIVENDI l 2012 l Annual Report 51
GROUP PROFILE – BUSINESSES – LITIGATION – RISK FACTORS 1
1
SECTION 4 - RISK FACTORS
SECTION 4 RISK FACTORS
Legal risks
Vivendi has performed a review of risk factors that may have a negative
impact on its businesses or results. It has not identified any material risks
other than those set out below.
The Risks Committee regularly assesses risks that may potentially
impact the businesses carried out by 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.
For a summary of the Risks Committee’s work, please refer to Chapter 3,
Section 3.7 of this document.
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 nature, interpretation or enforcement of these
laws and regulations by governmental, administrative, judicial or other
authorities, including competition authorities, particularly with respect to
competition and tax laws and regulations 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, and 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 Superior Audiovisual Council); in Morocco, the
Agence Nationale de Réglementation des Télécommunications (ANRT,
the National Telecommunications Regulatory Agency) 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 were unable to obtain or retain
the licenses required to conduct, continue or expand its operations in a
timely manner.
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, or is likely to become, involved in a number of contentious
proceedings or investigations filed against it by subscribers, consumer
associations, competitors, and shareholders or regulatory and tax
authorities. If the Group fails to negotiate an amicable settlement,
damages may be awarded against the Group or penalties may be imposed.
For a description of the main legal proceedings or investigations in
which the Group is involved, please refer to Note 27 to the Consolidated
Financial Statements for the year ended December 31, 2012 and the
“Litigation” section of this chapter.
Vivendi recognizes a provision for expenses that may result from
a proceeding whenever a risk 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 in, at any time,
a re-appraisal of the risk. With the exception of the main legal proceedings
and investigations described in this section and in Note 27 to the
Consolidated Financial Statements for the year ended December 31, 2012
(Chapter 4), Vivendi considers it unlikely that current proceedings will have
a material negative impact on the Group’s financial position.
RISKS ASSOCIATED WITH CONTRACTUAL COMMITMENTS
Vivendi and its subsidiaries have made a number of conditional
commitments, the most material of which are described in Note 26 to the
Consolidated Financial Statements for the year ended December 31, 2012.
Certain of these commitments are unlimited in their duration or amount. If
Vivendi had to make a payment to satisfy one of these commitments, this
may have a negative impact on its financial results and financial position.