FORM 20-F THOMSON multimedia - Technicolor

More documents

Recommendations

Info

ITEM 8 — FINANCIAL INFORMATION A — Consolidated Financial Statements and Other Financial Information Please refer to the consolidated financial statements and the notes and exhibits thereto in Part III hereof and incorporated herein by reference. Barbier Frinault & Autres, Member of Andersen Worldwide and one of our two independent auditors, has informed us that on March 14, 2002, an indictment was unsealed charging Arthur Andersen LLP, the U.S. Member of Andersen Worldwide, with federal obstruction of justice arising from the U.S. government’s investigation of Enron Corp. Arthur Andersen LLP has indicated that it intends to contest vigorously the indictment. As a U.S.-listed company, we are required to file with the SEC annual financial statements audited by our independent statutory auditors. Our access to the U.S. capital markets and our ability to make timely SEC filings could be impaired if the SEC ceases accepting financial statements audited by Members of Andersen Worldwide or if for any reason any Member of Andersen Worldwide performing auditing services for us is unable to perform such services for us. B — Legal Proceedings In the normal course of business, we are involved in legal proceedings and are subject to tax, customs and administrative regulation. Our general policy is to set up reserve in cases where a risk is identified, the prospects for success are doubtful, and the amount of the potential liability is reasonably ascertainable. In January 1998, a grand jury investigation was initiated by the U.S. Attorney’s Office in Baltimore, Maryland. This investigation, currently being conducted by the U.S. Department of Justice, relates to the transfer pricing used in the importation of picture tubes by THOMSON multimedia, Inc. (a wholly-owned subsidiary of Thomson) from an Italian subsidiary of Thomson between 1993 and June 1998. In parallel, a civil investigation was initiated by the U.S. Customs Service, which issued prepenalty notices on December 21, 1998. A pre-penalty notice means that a claim is being contemplated. The pre-penalty notices allege that certain of our subsidiaries and five of their employees intentionally undervalued television tubes imported by us from the Italian affiliate. According to the preliminary pre-penalty notices, these tubes had an appraised domestic value of approximately U.S.$419 million (0 475 million at the December 31, 2001 closing rate). On December 28, 2000, the Customs Service amended the pre-penalty notices and alleged an appraised domestic value of approximately U.S.$425 million (0 482 million at the December 31, 2001 closing rate). In an agreement with the Customs Service in January 1999, all action in respect of the pre-penalty notices was suspended for a period of one year in exchange for waivers of the statute of limitations through January 2001. In July 2000, all of the parties who previously received pre-penalty notices agreed to waive the statute of limitations defense for an additional period of time in order to allow the U.S. government to complete its investigation and to seek resolution of the matter through administrative proceedings. The waivers were extended further in November 2001 and are effective through January 6, 2003. The amended pre-penalty notices estimate the loss of custom revenues at approximately U.S.$12.5 million (0 14 million at the December 31, 2001 closing rate). Under applicable statutes, penalties could be levied in an amount equal to the appraised domestic value of the merchandise and against each of the five employees concerned in an amount up to eight times the loss of revenue. In addition, we have agreed to indemnify the five employees for the monetary penalties. To date, no charges have been filed. Based on information currently available, we are not in a position to estimate the liability and have not accrued for a reserve. We will defend vigorously against any allegations of wrongdoing. 70
In connection with the investigation being conducted by the U.S. Customs Service, the Italian ‘‘Guardia di Finanza’’ tax police conducted a tax verification of the Italian subsidiary of Thomson, Videocolor S.p.A, which had exported picture tubes to THOMSON multimedia, Inc. during the years 1993 through 1998. In its report transmitted to the Italian Direct Taxes Local Office in December 1999, the Guardia di Finanza recommended increasing the prices of the tubes exported to THOMSON multimedia, Inc., and, as a consequence, increasing the taxable income of Videocolor S.p.A. The taxable income increase, as proposed for the years 1993 through 1998, with regard to picture tube prices, amounts to ITL 60 billion (0 31 million). On December 28, 1999, the Direct Taxes Local Office formally advised that an assessment would be due with regard to 1993 amounting to ITL 10.84 billion (0 5.6 million) taxable income, resulting in (i) reversal of tax-loss carryforwards and (ii) additional tax penalties and interest amounting to approximately ITL 4 billion (0 2.1 million). On March 21, 2000, Videocolor S.p.A. challenged this assessment before the competent tax jurisdiction of Frosinone in Italy. On November 23, 2000, the Direct Taxes Local Office gave notice of an assessment with regard to 1994 amounting to ITL 18.87 billion (0 9.7 million) taxable income, resulting in (i) additional taxes amounting to 0 5.2 million and (ii) tax penalties amounting to 0 5.2 million (before interest). In February 2001, Videocolor S.p.A challenged this assessment before the Local Tax County Commission. Based on our valuation method, the Commission nevertheless decided that the tax assessment should amount to 0 3.4 million and that we should pay an additional 0 2.7 million for the year and 0 2.5 million for late penalties. With respect to 1993, we have challenged this assessment before the competent tax jurisdiction of Frosinone. On February 13, 2001, the Court of Frosinone rendered its decision regarding the 1993 tax assessment. It maintained part of the assessment based on 1993 elements, yet it invalidated the valuation method of the exported tubes applied by the Italian Direct Taxes Local Office. Taking into account the tax-loss carry-forwards and the tax exemption system at that date, no tax or penalty is due concerning that year. Videocolor S.p.A. has decided to appeal the decisions before the competent tax jurisdiction. In 2001, the Direct Taxes Local Office gave notice of an assessment with regard to 1995 resulting in (i) additional taxes amounting to ITL 8.2 billion (0 4.2 million) and (ii) tax penalties amounting to ITL 8.2 billion (0 4.2 million) before interest. The taxable income increase, as proposed for the year 1995, also mainly relates to picture tube prices. Videocolor S.p.A appealed this assessment on October 25, 2001, before the competent tax jurisdiction of Frosinone in Italy. In December 1998, a purported class action, Johnston v. THOMSON Multimedia, Inc., was filed in the Marion Circuit Court of the State of Indiana alleging that certain RCA televisions are defective. The case was transferred to the Hamilton Circuit Court in Indiana on THOMSON Multimedia, Inc.’s motion. The Johnston suit was brought on behalf of all persons and entities in the United States who, since January 1, 1993, purchased an RCA˛ television which has experienced impaired audio or video performance. Additional purported state class actions, brought on behalf of purchasers of RCA˛, GE˛ and ProScan televisions manufactured by us have been filed in state courts in New Jersey, New York, Florida, California, Illinois and Texas. In addition, a purported national class action, Fiocco v. THOMSON Multimedia, Inc., was filed in the Superior Court of New Jersey in 2000, and another purported national class action, Baird v. THOMSON Multimedia, Inc., was filed in early 2001 in the Circuit Court of Madison County, Illinois. We entered into a settlement agreement on January 19, 2001 to resolve the claims on a nationwide basis. The settlement agreement was submitted to the Third Judicial Circuit Court in Madison County, Illinois, where the Baird case was pending, for preliminary approval. On January 23, 2001 the Illinois Court signed an order preliminarily approving the settlement agreement. In addition, the Court’s order required the lead counsel for the plaintiffs to dismiss without prejudice all of the pending class action cases referenced herein other than the Johnston and Baird actions. On June 15, 2001, the Court conducted a settlement fairness hearing resulting in an order 71
Page 1 and 2:
As filed with the Securities and Ex
Page 3 and 4:
INTRODUCTION In this Annual Report
Page 5 and 6:
PART I ITEM 1 — IDENTITY OF DIREC
Page 7 and 8:
1997 1998 1999 2000 2001 (1) 2001 1
Page 9 and 10:
B — Exchange Rate Information Our
Page 11 and 12:
we have limited operating history,
Page 13 and 14:
projects that such shareholder may
Page 15 and 16:
publishers, network operators and e
Page 17 and 18:
division. Our relative decrease in
Page 19 and 20: we initiated at the end of 2001 our
Page 21 and 22: approval. Nextream combines busines
Page 23 and 24: ) Digital Optical Components We pro
Page 25 and 26: our presence with global retailers
Page 27 and 28: product. Through Nextream, we will
Page 29 and 30: ) Within personal media services, w
Page 31 and 32: We have obtained significant price
Page 33 and 34: Location Division Products Asia: Ba
Page 35 and 36: ITEM 5 — OPERATING AND FINANCIAL
Page 37 and 38: and 10% in 1999. The acquisition of
Page 39 and 40: Accordingly, under U.S. GAAP, the g
Page 41 and 42: effect of the events of September 1
Page 43 and 44: labor costs resulting from the impl
Page 45 and 46: Our operating income under U.S. GAA
Page 47 and 48: offerings, the accounting treatment
Page 49 and 50: GROWL in the United States. These p
Page 51 and 52: Other income and expense Other inco
Page 53 and 54: In evaluating our cash flow perform
Page 55 and 56: Guarantees given by subsidiaries of
Page 57 and 58: ITEM 6 — DIRECTORS, SENIOR MANAGE
Page 59 and 60: Initially Other business Principal
Page 61 and 62: Charles Dehelly was appointed Chief
Page 63 and 64: The following table, sets forth the
Page 65 and 66: French subsidiaries will pay bonuse
Page 67 and 68: our shares and have a nominal value
Page 69: exclusive right to grant licenses t
Page 73 and 74: consumers who acquired certain tele
Page 75 and 76: are also permitted to offer investo
Page 77 and 78: The tables below set forth, for the
Page 79 and 80: ITEM 10 — ADDITIONAL INFORMATION
Page 81 and 82: general meeting affecting these rig
Page 83 and 84: oth for a period of up to five year
Page 85 and 86: an ordinary general meeting, or by
Page 87 and 88: that Euroclear France provide us at
Page 89 and 90: The shareholders, at an extraordina
Page 91 and 92: This discussion is intended only as
Page 93 and 94: ) a tax-exempt organization, ) a li
Page 95 and 96: A simplified certificate must state
Page 97 and 98: ITEM 11 — QUANTITATIVE AND QUALIT
Page 99 and 100: Sensitivity To Exchange Rate Fluctu
Page 101 and 102: December 31, 2000 December 31, 2001
Page 103 and 104: ITEM 17 — FINANCIAL STATEMENTS No
show all

FORM 20-F THOMSON multimedia - Technicolor

Create successful ePaper yourself

Delete template?

Save as template?