2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3NOTE 33. CONTINGENT ASSETS AND LIABILITIESIn the normal course of its business, the Group is involved in a numberof legal or arbitration proceedings with third parties or with the taxauthorities in certain countries. Provisions are taken to cover suchproceedings when the Group has a legal, contractual or constructiveobligation towards a third party at the year-end, it is probable that anoutflow of resources embodying economic benefits will be requiredto settle the obligation, and the amount of the obligation can bereliably estimated.Contingent liabilities in associates and joint ventures are presentedin notes 17.2 and 18.2.Dispute with the Baud familyOn 4 February 2011, the arbitration board delivered its final rulingin the dispute between Casino and the Baud family over Franprixand Leader Price dividends and late interest. The board rejectedthe Baud family’s claims for payment of Franprix and Leader Pricedividends for 2006 and 2007 and additional compensation for theirinternational tax position, due to accounting errors and irregularitiesin their financial statements.As a result of the board’s decision, Casino will be required to payonly €34 million corresponding to dividends for 2008 (€28 million)and additional consideration for the Franprix and Leader Price sharespreviously acquired by Casino (€6 million).This amount of €28 million is lower than the €67 million that had beenrecognised in other current liabilities. The difference of €39 millionwas deducted from other liabilities at 31 December 2010 and thegoodwill arising on acquisition of the shares was reduced by acorresponding amount.As regards the dispute over the organisation and operation of Geimex,a company owned jointly and equally by Casino and the Baud familythat owns the international rights to the Leader Price brand, anacting director appointed by the Paris commercial court has beenmanaging the company since May 2008. The disputes between thetwo shareholders mainly involve Casino’s disposal of Leader PricePolska in 2006 and the Baud family’s Swiss activities. The case hasgone to arbitration and the two parties are pursuing criminal complaintsagainst each other.A ruling is expected at the end of 2011. Casino contests all the claimsmade by the Baud family and is confident in the outcome of this casebased on advice from its legal counsels.Geimex is proportionately consolidated in the Group’s financialstatements. Casino’s interest in this company amounts to €77 million,including €61 million in goodwill.For information, the Geimex group’s revenue and earnings amountedto €249 million and €8 million respectively in 2010.Unicentro dispute (Colombia)In the second half of 2009, a dispute arose over the operation ofan asset in Colombia. On 20 August 2010, the parties reachedan agreement which had no material impact on the financialstatements.Property damage in ThailandDuring the unrest in Bangkok in the second quarter, the Group’ssubsidiary Big C Thailand suffered losses as a result of vandalism andbusiness interruption losses estimated at €17 million at 31 December2010. Property damage, business interruption losses and expensesare covered by the Group’s insurance policies.The total cost is being assessed by the Group’s insurers. Lossesassessed on the basis of asset reconstruction or replacement costtogether with business interruption losses are currently estimated at€36 million. The net cost to the Group at 31 December 2010, aftertaking account of insurance and deductibles, is €3 million including therecognition of a €14 million insurance receivable, of which €7 millionwas received in December 2010 and €2 million in January 2011,leaving a receivable of €5 million.Tax disputesThe Group has been notified of tax reassessments related to 1998,concerning utilisations of tax loss carryforwards contested by the taxauthorities and a provision for impairment in value of fixed assets,which the tax authorities consider as non-deductible. The Grouphas contested these reassessments and is confident of a favourableoutcome. Consequently, no provision has been set aside for theadditional tax claimed. The administrative court found in favour ofthe tax authorities on the second count. The Group contests thisruling and has appealed to the Conseil d’État. The risk not providedfor amounts to €7 million.NOTE 34. RELATED PARTY TRANSACTIONSRelated parties are:■■■■■■parent companies;entities that exercise joint control or significant influence over theentity;subsidiariesassociates;joint ventures;members of the entity’s administrative, management and supervisorybodies.The Company has relations with all its subsidiaries in its day-to-daymanagement of the Group. It also receives advice from its majorityshareholder, Groupe Rallye, through Euris, the ultimate holdingcompany, under a strategic advice and assistance contract signedin 2003.The related party transactions presented below mainly concern routinetransactions with companies over which the Group exercises jointcontrol or significant influence, which are respectively proportionatelyconsolidated or accounted for by the equity method. Thesetransactions are carried out on arm’s length terms.Related party transactions with individuals (directors, corporateofficers and members of their families) and with parent companiesare not material.Registration Document 2010 | Casino Group121