Annual report 2014

Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements |

Consolidated

Financial Statements

| Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements

Note 1. Accounting policies and valuation methods

1.4. Related parties

Group-related parties are those companies over which the group

exercises exclusive control, joint control or significant influence,

shareholders exercising joint control over group joint ventures, non-

controlling interests exercising significant influence over group

subsidiaries, Corporate Officers, group management and Directors and

companies over which the latter exercise exclusive control, joint control,

or significant influence.

The transactions realized with subsidiaries over which the group

exercises control are not included in the intersegment operations (a

list of the principal consolidated subsidiaries is presented in Note 27).

Moreover, commercial relationships among subsidiaries of the group,

aggregated in operating segments, are conducted on an arm’s length

basis on terms and conditions similar to those which would be offered

by third parties. The operating costs of Vivendi SA’s headquarters,

after the allocation of a portion of these costs to each of the group’s

businesses, are included in the Corporate operating segment (Please

refer to Note 2 for a detailed description of the transactions between

the parent company and the subsidiaries of the group, aggregated by

operating segments).

1.5. Contractual obligations and contingent assets and liabilities

Once a year, Vivendi and its subsidiaries prepare detailed reports on all

material contractual obligations, commercial and financial commitments

and contingent obligations, for which they are jointly and severally

liable. These detailed reports are updated by the relevant departments

and reviewed by senior management on a regular basis. To ensure

completeness, accuracy and consistency of these reports, some dedicated

internal control procedures are carried out, including (but not limited to)

the review of:

minutes of meetings of the shareholders, Management Board,

Supervisory Board and Committees of the Supervisory Board in

respect of matters such as contracts, litigation, and authorization of

asset acquisitions or divestitures;

pledges and guarantees with banks and financial institutions;

pending litigation, claims (in dispute) and environmental matters

as well as related assessments for unrecorded contingencies with

internal and/or external legal counsels;

tax examiner’s reports and, if applicable, notices of reassessments

and tax expense analyses for prior years;

insurance coverage for unrecorded contingencies with the Risk

Management department and insurance agents and brokers with

whom the group contracted;

related-party transactions for guarantees and other given or received

commitments; and more generally

major contracts and agreements.

1.6. New IFRS standards and IFRIC interpretations that have been published but are not yet effective

The IFRS standards and IFRIC interpretations that have been published by

the IASB and endorsed in the European Union, which are not yet effective

but which have been applied in anticipation are detailed in Note 1.1.

Among IFRS standards and IFRIC interpretations issued by the IASB/IFRS

IC at the date of approval of these Consolidated Financial Statements,

but which are not yet effective, and for which Vivendi has not elected

for an earlier application, the main standard which may have an impact

on Vivendi is IFRS 15 –

Revenue from Contracts with Customers

issued by IASB on May 28, 2014, which applies mandatorily from

January 1, 2017, and still being endorsed in the EU. Vivendi is currently

assessing the potential impact on the Statement of Earnings, the

aggregate comprehensive income, the Statement of Financial Position,

the Statement of Cash Flows, and the content of the Notes to the

Consolidated Financial Statements in applying this standard.

219

Annual Report 2014