Ubisoft 2002 Annual Report Download

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2003
ANNUAL REPORT

Table of contents

  • Page 1
    ANNUAL REPORT 2003

  • Page 2
    CONTENTS 7 13 17 21 27 Growth: Ubisoft on target Quality-driven growth Ubisoft: talented creators...and brand builders Financial report

  • Page 3
    ...E3 2003 Best Action/Adventure Game Award for Prince of Persia The Sands of Timeâ„¢ . *All platforms combined, Jan-June 2003. Source: NPD **Net revenue growth based on a constant exchange rate and operating result based on US GAAP pro forma before goodwill and business assets amortization 3 ANNUAL...

  • Page 4
    ... a competitive edge in the massively multiplayer online gaming sector. In addition to the release of localized versions of Sony Online Entertainment's EverQuest® in Europe and China, we recently released Shadowbane™ - one of the most awaited MMO games in its category - in North America. The game...

  • Page 5
    ... online consoles. Ubisoft will increasingly develop games that provide access to exclusive downloadable console content, including new missions and maps. 5. Continue gaining ground with our MMO games. beyond, let me take this opportunity to thank our shareholders, business associates and financial...

  • Page 6
    ... Ngo, Artistic Director (Shanghai) " Splinter Cell™ The infiltration continues! • 5 million copies sold worldwide (Xbox™, PC, PlayStation®2 and GameCube™) in just 10 months • Sales of more than 6 million units forecast on all platforms • Named best action/adventure game at E3 2002...

  • Page 7
    ... in the United States**, Ubisoft is a major player in the video game market. By combining quality products with marketing expertise and distribution, Ubisoft achieves its strategic target of 20% organic growth each year. 7 *Source: ChartTrack, Gfk, Media control **Source: NPD ANNUAL REPORT 2003

  • Page 8
    ...Morocco, the United States, Spain and China Opened studios in China and Canada Distribution subsidiary opened in Australia 1986 Founded â- Claude, Michel, Yves, Gérard and Christian Guillemot create Ubisoft, a publisher and distributor of educational software and video games A series of hits on...

  • Page 9
    ... of Ubisoft Entertainment S.A. to the First Monthly Settlement Market of the Paris Stock Exchange Marketing organized into two geographic centers: EMEA (Europe, Middle East and Asia) and North America â- 2001 Pursued acquisitions and online games strategy â- 1 â- Acquired Blue Byte Software...

  • Page 10
    ...the year. With operating profit up by 20%, the group also improved its profit margin. a record year Steady growth in sales Sharp increase in operating profit 2002/03 million euros million euros A strategy based on hits Three major titles sold more than 6 million units Tom clancy's Splinter Cell...

  • Page 11
    56% Europe Ubisoft wins over North America Sales in North America climbed sharply, up 35% during the year (52% at a constant rate). As a result, Ubisoft was the sixth largest publisher for consoles in the United States during the first quarter of 2003*. This region accounts for 40% of annual sales....

  • Page 12
    " The online feature adds a whole new dimension to the game. Playing Ghost Recon online from a console makes the game even more exciting!" Richard Dansky, Design Manager (Red Storm Entertainment) " Ghost Reconâ„¢ Teamwork Thrills and chills guaranteed: Tom Clancy's Ghost Reconâ„¢ is an ...

  • Page 13
    ... when it comes to playability, advances in artificial intelligence, graphics rendering, online capabilities and much more. This quality is the main catalyst driving market growth today. Ubisoft took advantage of technological developments to create this year's blockbusters. 13 ANNUAL REPORT 2003

  • Page 14
    ... of Beyond Good & Evilâ„¢ and Prince of Game software market US Europe million $ million â,¬ Persia The Sands of Timeâ„¢ • First-person shooter games (7%* of with Far Cryâ„¢ and XIII *Source: NPD the total market), 2001 Sony PlayStation®2 Nintendo GameCubeâ„¢ Microsoft Xboxâ„¢ 1 435 168 231...

  • Page 15
    ...) and Matrix Onlineâ„¢ (launch planned for summer 2004) represent the major headway the group has made in this new, highly promising market segment. Indeed, Matrix Onlineâ„¢ received the prize for the most innovative game at the E3 2003 world video game exhibition. ANNUAL REPORT 2003 Ubisoft in...

  • Page 16
    ...that grabs the player and doesn't let go!" Ahmed Boukhelifa, Project Manager Rayman 3 (Montreuil) " Rayman 3: ® Hoodlum Havoc A...years after his creation, Rayman® has won over more than 14 million players. The third installment of the series, an adventure that comes closer than ever to a cartoon...

  • Page 17
    3 UBISOFT: Talented creators...The creative talent of its production teams is the key to Ubisoft's success. 17 ANNUAL REPORT 2003

  • Page 18
    ... force in the world, it is backed by a marketing and sales force of 700 people. combining skill with passion Scriptwriters, graphic artists, sound designers, game designers, IT specialists, animators, data managers, testers - these creative, passionate professionals are at the cutting edge...

  • Page 19
    ...systems facilitate the exchange of knowledge among Ubisoft's various teams. The Group's structure ensures that its 1,990 employees are aware of the latest advances in video games. More than mere video games, the works created by Ubisoft's experts are a new mode of expression. 3 employees (on March...

  • Page 20
    ... enough as they take control of the most elite, international anti-terrorist intervention group around Rainbow Six® 3 is the sequel to the very popular Tom Clancy's Rainbow Six®: Rogue Spear, elected action game of the year in 2000. The series has sold more than 6.7 million copies worldwide Tom...

  • Page 21
    ... Cell™: Pandora Tomorrow™ and Uru™: Ages Beyond Myst®. Given the blockbuster market for video games, only strong brands associated with original, high-quality creations spell success. Ubisoft devotes its entire marketing and sales force to develop a long-lasting catalog of brands. E3 awards...

  • Page 22
    Prince of Persia The Sands of Time™ Named best action/adventure game by a jury of professionals at E3 in May 2003 Other awards: named best PlayStation®2 game and best GameCube™ game at the E3 2003 trade show by IGN

  • Page 23
    Far Cryâ„¢ Designated second best PC action game at E3 2003 by IGN

  • Page 24
    Beyond Good & Evil™ Beyond Good & Evil™ received five nominations at E3 2003 and was chosen by IGN as the second best adventure game for PlayStation®2 and GameCube™

  • Page 25
    Objective: Choose a soldier and create a team in order to thwart the plans of a group of Cuban guerillas Result: Tension and fascinating realism at the heart of a unique online experience Ghost Reconâ„¢ Tom Clancy's Island Thunderâ„¢

  • Page 26
    XIII An original adaptation of the graphic novel A revolutionary graphic style achieved with cell-shading, onomatopoeia and small comic strip illustrations Explosive multiplayer modes

  • Page 27
    FINANCIAL 2003 REPORT 27 FINANCIAL REPORT 2003

  • Page 28
    ...Region Sales and Earnings of Main Subsidiaries Change in Income Statement Change in Working Capital Requirement (WCR) and Indebtedness Pro forma presentation in accordance with US GAAP 30 30 30 31 31 31 32 32 32 33 33 34 34 1.4 Employees 1.5 The Group's organizational chart 1.6 General Information...

  • Page 29
    4. General Information 4.1 Information on the Company 4.1.1 4.1.2 4.1.3 4.1.5 4.1.7 Company name and registered office Legal status Jurisdiction Business activities of the company (Article 3 of the Articles of Association) Place of consultation of legal documents regarding the company 89 89 89 89 ...

  • Page 30
    ... of 10 major Microsoft PC products in Europe (excluding UK), Canada, Latin America, Australia and the Asia-Pacific zone (except Japan and South Korea) Exclusive agreement signed for the distribution of PC games developed by SCI Games in Sweden, Norway and Denmark Tom Clancy's Splinter Cellâ„¢ voted...

  • Page 31
    ... the final product. Publishing covers revenues from titles designed and produced by third-party developers, for which Ubisoft finances and supervises production in exchange for acquiring the license. Ubisoft then handles localization and manufacturing, and of course marketing and sales distribution...

  • Page 32
    ... North America region were â,¬ 183 million for the year, and accounted for 41% of Group sales. Over the fiscal year, the region posted an increase of 35% at current exchange rates and 52% at constant rates. The Europe region accounted for 55% of annual sales, at â,¬ 250 million (up 20%), with Spain...

  • Page 33
    ...Net Income 03/31/2001 -6,994 2,038 404 1.3.7 Change in Income Statement Ubisoft achieved all the objectives it had set during the fiscal year: sales (17% to 22% growth at constant exchange rates), operating income (35 to 40 million euros according to French accounting standards and 29 to 34 million...

  • Page 34
    ..., Ubisoft also presents pro forma accounts in which in-house development costs are stated as expenses, as is the practice of certain American video game publishers. Differences between the standards: â- French standards or "French GAAP" - In-house research and development expenses are reported as...

  • Page 35
    ... 1,836 Production Sales, marketing and administration Total b) Turnover There is no significant staff turnover. Distribution of Ubisoft personnel by country as of March 31, 2003 Country Germany Australia Austria Belgium Brazil Canada China Denmark Spain United States Finland France UK Netherlands...

  • Page 36
    ....00% 100.00% Ubi Soft France S.A.S Ubi Soft Entertainment Ltd Marketing (France) (United Kingdom) (Germany) (Spain) (Italy) (United States) (Japan) (Australia) (France) (France) (Denmark) (Belgium) (Hong Kong) (The Netherlands) (Sweden) (Austria) (Brazil) (France) (Canada) (United Kingdom) (Finland...

  • Page 37
    ... Entertainment Korea branch office. 1.6 General Information and Risks 1.6.1 Trademark Protection Ubi Soft Entertainment games are covered by intellectual property rights both in Europe and internationally (for France: Institut National de la Propriété Industrielle [French Patent Office], Paris...

  • Page 38
    ...affected the market price of shares of a large number of listed companies. At times, these fluctuations have had nothing to do with the companies' operating performances. Investors are advised that these market fluctuations may have an effect on the company's stock price. 38 FINANCIAL REPORT 2003

  • Page 39
    ... one Ubisoft share â- â- May 2003 â- Signing of a co-publishing agreement with Warner Bros studios for the launch of Matrix Online in the summer of 2004 IGN.com bestows awards on the Ubisoft games presented at E3: Four awards for Prince of Persia The Sands of Timeâ„¢ including the award for...

  • Page 40
    ... XIII, Ubisoft is aiming at a significant breakthrough in the FPS segment (First-Person Shooter). In 2003/04, with 65 new products and a particularly well-rounded baseline catalog, the Group foresees organic growth at constant exchange rates on the order of 17% to 22%. Operating income is projected...

  • Page 41
    ... 31, 2003 2.1 Consolidated accounts on March 31, 2003 2.1.1 Consolidated balance sheet on 31 March 2003 ASSETS Goodwill, business assets, trademarks Intangible assets Tangible assets * Financial assets Fixed assets Inventory and work-in-progress Advances and installments paid Trade receivables Other...

  • Page 42
    ... the Group's accounting principles. This applies to Red Storm Entertainment, Ubi Soft Edutainment SA, Ludimedia SA, Ludi Factory SARL, 3D Planet SpA, Blue Byte Software Inc, Blue Byte Software LTD, and Blue Byte Software GmbH&Co. KG. These 2000/2001 pro forma accounts do not reflect the change in...

  • Page 43
    ...including cash position of companies acquired and sold including cash position of companies acquired and sold * including write-back of negative goodwill of Studios Ltd: Kâ,¬ 165 * including write-back of negative goodwill of Studios Ltd: Kâ,¬ 165 43 FINANCIAL REPORT 2003 Accounts on March 31...

  • Page 44
    ..., form a group subject to the fiscal integration regime. During the fiscal year, Ubi Soft Entertainment SA bought back 1,200,699 convertible/exchangeable bonds (OCEANE) at an average price of â,¬ 30.25. As of March 31, 2003, Ubi Soft Entertainment SA held 1,169,733 of its own shares acquired for an...

  • Page 45
    ...: amortized over five years. Sales-related software: â- â- â- g. Inventory and work-in-progress The inventories of all Group companies are valued on the basis of the cost prices determined under normal business conditions. Inventory is valued using the FIFO method. The gross value of goods and...

  • Page 46
    ... its operating currency to the currency of the consolidating company is carried out in accordance with the closing rate method. This involves converting the assets and liabilities of foreign subsidiaries at the exchange rate in force at the close of the financial year, while the income statement is...

  • Page 47
    ... Nordic AS Ubi Music Publishing Inc Ubi Soft Entertainment Ltd Ubi Soft Entertainment BV Country Consolidated France France USA France United Kingdom Germany Romania Spain Japan Italy France France France France France Australia France France France France Canada China Morocco USA Denmark Canada...

  • Page 48
    ...Nordic AS Ubi.com SA Ubi Manufacturing and Administration SARL Ubi.com Inc. Ubi Soft Entertainment SA Ubi Soft Entertainment Finland OY Country Consolidated Controlling percentage Belgium Spain Italy Brazil France France France China USA Sweden Canada United Kingdom Austria France France USA France...

  • Page 49
    ...dissolved Ubi Voices Inc Ubi Soft Entertainment Inc Ubi Studios Ltd Ubi Music Publishing Inc Ubi Studios KK Ubi Soft Publishing OEM Inc 2.1.4.3 Notes on the Balance Sheet I. Goodwill, business assets, trademarks a. Goodwill Goodwill breaks down as follows as of March 31, 2003: Acquired company Ubi...

  • Page 50
    ....KG Blue Byte Software Inc Red Storm Entertainment Ubi Soft Canada Inc TOTAL Goodwill is amortized over 20 years. b. Business assets Business assets break down as follows as of March 31, 2003: Business assets France United States Germany Belgium Netherlands Austria Switzerland Canada TOTAL On 03...

  • Page 51
    ... 105,305 8,224 5,933 33 5,451 252 125,198 â- Increase 63,482 4,415 4,087 33 2,129 44 74,190 Decrease 54,622 200 6,717 471 24 62,034 (1) due to Ubi Romania All software currently being marketed is amortized over a maximum of 3 years. FINANCIAL REPORT 51 2003 Accounts on March 31, 2003

  • Page 52
    ... April 1, 2002, Ubisoft Entertainment has sold its minority holdings in Financière Yaccom, Ludopia Interactive and Students-Life.com. These holdings were transferred to the Guillemot Brothers holding company on the basis of their original purchase price, in exchange for shares in Gameloft.com SA...

  • Page 53
    ... of liquidation (Ubi Voices Inc, Ubi Soft Entertainment Inc) ; they fell below materiality thresholds (Ubi Music Publishing Inc) General information on the main non-consolidated companies (in euros) Listed companies Book value on 03.31.03 Number of shares Value of securities per share on 03.28.03...

  • Page 54
    ... 22,948 22,948 Net value 12,446 11,765 24,211 Investment securities are booked at acquisition cost. At year-end, any capital losses are provisioned. The company made a commitment to dispose of directly held shares exceeding 1% of its stock before September 30, 2003. 54 FINANCIAL REPORT 2003

  • Page 55
    ... Consolidated Earnings N-1 Change in capital of consolidating company Consolidated earnings (Group share) Change in conversion adjustments Reclassification of merger premiums Grants received Situation at March 31, 2003 5,156 87 259,343 3,619 173 55 FINANCIAL REPORT 2003 Accounts on March 31...

  • Page 56
    ...Board of Directors to increase the capital of Ubisoft Entertainment via an equity issue reserved for employees of the company and its French subsidiaries, to a maximum of 2.5% of the total shares comprising the company's share capital at the time the authorization was used, in particular by means of...

  • Page 57
    ...Company is required to respect certain financial ratios (i.e. "covenants"). The following covenants must be respected with regard to the syndicated loan: Net debt / shareholders' equity Net debt / cash flow from operations Free cash flow excluding acquisitions / sales â- â- 57 FINANCIAL REPORT...

  • Page 58
    ...would be redeemed in full on November 30, 2006 at a price of â,¬ 52.70, or roughly 110.94 % of their face value. During the fiscal year, the company bought back 1,200,699 bonds with the option of conversion and/or exchange for new or existing shares in the amount of â,¬ 36,319,599. These bonds were...

  • Page 59
    ... assets Tangible assets Financial assets Fixed assets Inventory and work-in-progress Advances and installments paid Trade receivables Other receivables, accruals and deferrals Investment securities Cash Current assets Total Assets France Germany UK Rest of Europe United States Canada 7,322 244 827...

  • Page 60
    ...% 5% 100% Kâ,¬ Germany UK Scandinavia Italy France Rest of Europe USA/Canada Rest of the world TOTAL 45,343 57,424 15,332 20,920 68,351 46,447 183,352 15,783 452,952 Kâ,¬ 43,891 41,460 13,230 16,030 67,970 29,770 137,960 18,650 368,961 Sales at constant exchange rates would...

  • Page 61
    ... activity in North America at the end of the fiscal year, at a time when the dollar was at its lowest level with respect to the euro. The exchange rate conversion adjustment, calculated via the historical rate method, amounted to Kâ,¬ 449. The total conversion adjustment posted to share capital...

  • Page 62
    ...of Ubi Soft France, the corporate tax expenses of Ubi EMEA (Kâ,¬ 78) have been totally absorbed. During the financial year, a fiscal integration group was also set up in the United States. Ubi Soft Holdings is the parent company of a fiscal group including five companies: Red Storm Entertainment Inc...

  • Page 63
    ...: Ubi Soft Entertainment: 1,544*34.33% Cancellation activation of prior losses: Studios Ltd: 2,139*30% Depreciation of business assets: Ubi Soft Gmbh: 340 * 40% Ubi Soft Sprl: 77 * 40.17% Ubi Soft BV: 57 * 35% Gamebusters GesmbH: 27 * 34% Ubi Soft Canada Inc: 101 * 38.16% Red Storm: 1,288...

  • Page 64
    ... which serve to support development costs (depreciation of games, internal and external development, royalties) and head office costs. (*) The data for Blue Byte LTD have been included in the rest of Europe. 2. Distribution of income by activity In light of the Group's organizational structure and...

  • Page 65
    ... paid â,¬ 914 None None None None Mrs. Yvette Guillemot is not compensated for her duties as a director of the Ubisoft Entertainment Group. 5. Events after closure of accounts â- Issuance of new share purchase or subscription warrants granted free of charge on May 14, 2003: Number and face value...

  • Page 66
    2.2 Corporate accounts on March 31, 2003 2.2.1 Balance sheet on March 31, 2003 ASSETS Intangible assets Business assets Tangible assets Financial assets Fixed assets Inventory and work-in-progress Advances and installments paid Trade receivables Other receivables Investment securities Cash Current ...

  • Page 67
    ... exchange differences Net expenses on sales of investment securities Total financial expenses Net financial income/expense Operating income less net financial income/expense Extraordinary income/expense Earnings before tax Corporate tax Net earnings for financial year (1) (2) (2) Fiscal year...

  • Page 68
    ... premium Increase in conversion premium Increase in issue premium on shares with warrants Increase in issue premium on group savings plan Increase in current accounts Conditional government loan Grants received Total cash flow from financial transactions (57,034) (152) 53 406 2 930 4,231 (38) 120...

  • Page 69
    ... a group subject to the fiscal integration regime. During the fiscal year, Ubi Soft Entertainment SA bought back 1,200,699 convertible bonds (OCEANE) at an average price of â,¬ 30.25. As of March 31, 2003, Ubi Soft Entertainment SA held 1,169,733 of its own shares acquired for an aggregate value of...

  • Page 70
    ... is made to cover the difference. The value of an equity holding is reviewed at the end of each financial year on the basis of the net position of the subsidiary concerned on that date, the market value on the closing date if the company is exchange listed and/or its prospects for growth over...

  • Page 71
    ... Released software programs External developments Software tools Localization ERP Other licenses TOTAL ...Decrease 51,777 129 6,716 58,622 Business assets Nature Distribution in France Distribution in Switzerland TOTAL As of 03.31.02 Cumulative ...FINANCIAL REPORT 2003 Accounts on March 31, 2003

  • Page 72
    ... 03.31.03 Gross 209,278 4 356 209,638 The change in equity interests is primarily due to the partial transfer of distribution and production activities to Ubi Soft France SAS and Ubi EMEA SARL, and to the transfer of shares in Sinister Games Inc, Ubi Soft Inc and Ubi.com Inc to its subsidiary, Ubi...

  • Page 73
    ... and financial debt Trade creditors and related accounts payable Tax and social security liabilities Other debts Debts on fixed assets TOTAL Bank loans taken out during the year Buy-back of OCEANE convertible bonds during the year Bank loans repaid during the year Amount of current account debts...

  • Page 74
    ... securities are booked at acquisition cost. At year-end, any capital losses are provisioned. Nature Number Av. price â,¬ Gross value Kâ,¬ 35,394 11,765 47,159 Closing price â,¬ 10.64 Provision Kâ,¬ 22,948 - Net value Kâ,¬ 12,446 11,765 24,211 Percentage of capital 6.67% - Own shares UCITS...

  • Page 75
    ..., 2002. Number of shares created Face value Subscription value Subscription period 137,115 â,¬ 0.31 â,¬ 7.09 From November 18 to 30, 2001 Number of shares of Ubi Soft Entertainment SA As of 04/01/02 Exercised options Stock subscription warrants exercised Shares subscribed in Company Savings Plan As...

  • Page 76
    ... and issue premiums during the past fiscal year was partly driven by the exercise of stock options. For the record, the exercise conditions of the stock option plans are as follows: 3rd Plan Initial number of shares Face value Subscription value Exercise period Options not exercised as of March...

  • Page 77
    ...5-for-1 stock split, one bond allows five shares to be subscribed, each with a face value of â,¬ 0.31 163,721 bonds were converted during preceding fiscal periods; no bonds were converted during the current period. 151,094 bonds remain to be converted. 77 FINANCIAL REPORT 2003 Accounts on March...

  • Page 78
    ...its production and distribution activities in the EMEA region (Europe excluding France, the Middle East and Asia) to its subsidiary Ubi EMEA SARL, the sales of Ubi Soft Entertainment SA for fiscal year 2002/03 consist primarily of intra-Group billings for services and royalties. II. Other operating...

  • Page 79
    ... from sales of investment securities 11,113 7,694 6,741 25,548 Net financial income/expense (7,359) 7,075 8,091 4,630 407 20,203 (5,544) 49 2,465 3,424 12,049 202 18,189 37 3,266 3,188 7,846 322 14,659 03.31.02 Foreign exchange risk In order to limit the Group's foreign exchange risks, Ubisoft...

  • Page 80
    ... projects, including â,¬ 1.5 million on intangible assets and â,¬ 3.9 million on licenses. â- VII. Corporate tax With effect from April 1, 2002, Ubi Soft Entertainment SA is the parent company of a fiscal group including five companies: 03.31.03 Pre-tax operating profit (loss) less financial...

  • Page 81
    ... 2006. â,¬ 28 Number and face value: Exercise period: Exercise price: The subscription warrants attributed to Ubisoft Entertainment, namely 1,169,733 warrants, were cancelled. â- â- The company made a commitment to dispose of directly held shares in excess of 1% of its stock before September 30...

  • Page 82
    ... complete year Dividends collected Financial information as of In thousands In thousands In thousands of currency of currency of currency SUBSIDIARIES - AT LEAST 50% OF CAPITAL HELD Ubi Soft Entertainment GmbH UBI SOFT HOLDINGS INC Ubi Soft SpA UBI Soft France SA EMEA Ubi Soft Canada Inc Subtotal...

  • Page 83
    .... We have also verified the information given in the Group management report. With the exception of the effects of the facts set forth above, we have no other observation to make on its veracity and agreement with the consolidated accounts. Rennes and Paris, August 1, 2003 BY THE STATUTORY AUDITORS...

  • Page 84
    ... by your General Meeting, we herewith present our report relative to the financial year ending March 31, 2003 regarding: • the audit of the annual accounts of Ubisoft Entertainment SA, as appended to this report. • specific verifications and information required by law. The annual accounts have...

  • Page 85
    ..., Gérard, Claude and Christian Guillemot Nature and purpose: Authorization given to the company for an advance in current account to Gameloft SA in the amount of â,¬ 6,500,000 at an interest rate of 4.5% per annum. The amount of the interest due over the fiscal year is â,¬ 24,842.47 euros. This...

  • Page 86
    ... with Nintendo of America, Microsoft and Sony Associates concerned: Mr. Yves, Claude and Christian Guillemot Nature and purpose: Authorization for the guarantee of commitments made by Ubi Soft Inc for US$5,000,000 with the following companies incorporated in the United States of America: Nintendo of...

  • Page 87
    ... Claude and Christian Guillemot Nature and purpose: Leasing-management agreement concluded with an effective date of April 1, 2002 for the branch of business assets concerned with the distribution of Ubisoft products in France; part of the business assets of Ubi Soft Entertainment SA for the benefit...

  • Page 88
    3.4 Report on Executive Compensation Article L.225 - 115 - 4° of the French Commercial Code On the basis of our audit of the accounts for the fiscal year ending March 31, 2003, we hereby certify that the total amount of compensation paid to the five highest-paid executives in the company, ...

  • Page 89
    ...year. the creation, publishing and distribution of all kinds of multimedia, audiovisual and computer products, especially video games, educational and cultural software, cartoons and literary, cinematographic and televisual works on any media, current or future; 89 FINANCIAL REPORT 2003 General...

  • Page 90
    ... of exercising general management functions. Share buy-back program A share buy-back program was authorized by the Annual General Meeting of Shareholders of September 12, 2002, with following objectives, in accordance with Articles L255-209 and following of the Commercial Code, in order of priority...

  • Page 91
    ... payment or exchange of value in connection with operations for growth by acquisition; allocation to employees or officers of the Company and affiliated entities, enabling them to benefit from the Company's growth, of an option plan for the purchase or subscription of shares, or a corporate savings...

  • Page 92
    ...30, 2006 at a price of â,¬ 52.70, or approximately 110.94 % of their face value. No bonds were exercised over the fiscal year ending March 31, 2003. During the fiscal year, the company bought back 1,200,699 bonds with the option of conversion and/or exchange for new or existing shares in the amount...

  • Page 93
    ... on April 25, 2003, the Board of Directors used the authorization granted by the Combined General Meeting held on September 12, 2002 for the issuance and allocation of stock purchase warrants for existing shares and/or for the subscription of new shares, which were issued and allocated free of...

  • Page 94
    ... the fiscal year by the ten employees who have subscribed the largest number of shares (total amounts). 13,900 â,¬ 12.35 10/15/07 (plan 8) 22 /04 /02 â,¬ 12.10 2 * information restated in the special report of the Board of Directors in accordance with Article L225-184 of the Commercial Code...

  • Page 95
    4.2.7 Historical table of changes in share capital - Date - Nature of transaction Number of shares created Number of shares (cumulative) Amount of capital increase Nominal share value (in FF) Issue premium (in... 2 343,205,937 26,451,810 26,451,810 95 FINANCIAL REPORT 2003 General Information

  • Page 96
    ... the Board of Directors used the authorization granted by the General Meeting of September 12, 2002, to set the subscription price of the shares to be issued at â,¬ 7.09 each, and specified that these shares would be subscribed by the Ubi Actions Company Mutual Fund. The employees subscribed 137,115...

  • Page 97
    ...Group employees Total * Ubi Ventures was taken over by Ubi Soft Entertainment on October 19, 2001. **Gameloft S.A took over Ludigames S.A on March 29, 2002 As of 03/31/02 Number of shares Ubi Participations S.A. Claude Guillemot Yves Guillemot Michel Guillemot Gérard Guillemot Christian Guillemot...

  • Page 98
    ...03 Number of shares Guillemot Brothers SA Claude Guillemot Yves Guillemot Michel Guillemot Gérard Guillemot Christian Guillemot Nathalie Guillemot Joëlle Guillemot Typhaine Guillemot Yvette Guillemot Guillemot Corporation SA Subtotal UBI Soft Entertainment SA Gameloft SA Public and Group employees...

  • Page 99
    ... holding these shares in pure registered form for two years. The remaining shares held carry a single voting right. The treasury shares held by Ubisoft Entertainment SA are devoid of voting rights. There is no shareholder's pact between Guillemot Brothers SA, Claude, Michel, Yves, Gérard, Christian...

  • Page 100
    4.5 Securities market General information on the securities market of the issuer ISIN code: FR0000054470 Listing market: Euronext-Paris - Premier Marché Number of listed shares as of March 31, 2003: 17,540,082 Market capitalization as of March 31, 2003: â,¬ 175.5 million at the closing price ...

  • Page 101
    5. Corporate Governance 5.1 Management - Chairman and Chief Executive Officer - Managing Vice Presidents Mr. Yves Guillemot Mr. Claude Guillemot (Operations) Mr. Michel Guillemot (Development - Strategy and Finances) Mr. Gérard Guillemot (Publishing and Marketing) Mr. Christian Guillemot (...

  • Page 102
    ... Guillemot Director January 25, 1996 Term to expire at the GMS called to rule on the financial statements for the fiscal year ending March 31, 2007 The Board of Directors met about thirty times during FY 2002/2003. Each Director must hold at least one share of the company. No options on shares...

  • Page 103
    ...San Francisco) RED STORM ENTERTAINMENT Inc (USA) BLUE BYTE SOFTWARE Inc (USA) SINISTER GAMES Inc (USA) Vice President SHANGHAI UBI COMPUTER SOFTWARE COMPANY Ltd (China) Vice President UBI SOFT ENTERTAINMENT GmbH (Germany) Director BLUE BYTE SOFTWARE Ltd (UK) UBI SOFT ENTERTAINMENT NORDIC AS (Denmark...

  • Page 104
    ...) UBI SOFT HOLDINGS Inc (San Francisco) UBI SOFT ENTERTAINMENT SWEDEN AB (Sweden) Deputy Director Chairman UBI SOFT DIVERTISSEMENT Inc (Canada) Managing Director UBI STUDIOS SrL (Italy) UBI STUDIOS SL (Spain) UBI SOFT SRL (Romania) Abroad Chairman UBI MUSIC Inc (Canada) Director UBI SOFT SPA (Italy...

  • Page 105
    ... (San Francisco) UBI SOFT ENTERTAINMENT NORDIC A/S (Denmark) UBI SOFT ENTERTAINMENT SWEDEN AB (Sweden) Ms. Yvette Guillemot Director of Ubi Soft Entertainment SA. Her term of office will expire at the General Meeting of Shareholders convened to rule on the financial statements for the fiscal year...

  • Page 106
    ... by the French Securities and Exchange Commission (Commission des Opérations de Bourse), hereby authorizes the Board of Directors, in accordance with the provisions of Articles L225-209 et seq. of the French Commercial Code, to trade in its own shares on the stock market. The objectives of such...

  • Page 107
    ...-180 of the French Commercial Code, where such employees are members of a corporate group savings plan. The total number of shares that may be subscribed pursuant to the present resolution shall not exceed 2.5% of the total amount of stock comprising the share capital of the Company on the date of...

  • Page 108
    ... financial statements, or failing these the annual company financial statements, are published; during the period between the date on which the management of the Company becomes aware of information which, if it were in the public domain, could have a significant impact on the market price for stock...

  • Page 109
    ... with the exception of the company itself, Ubisoft Entertainment. They shall represent the totality of shareholders. They shall be called and deliberate under the conditions stipulated by the French Commercial Code. General Meetings shall be held at the registered office or at any other place...

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    ... our mission. Since we were dealing with isolated projected data resulting from a structured preparation process, this reading took into account the assumptions applied by the company officers and the translation of those assumptions into figures. The annual and consolidated financial statements for...

  • Page 111
    ... for information: Mr. Yves Guillemot Chairman and CEO 28, rue Armand Carrel 93108 MONTREUIL-SOUS-BOIS Cedex, France Tel.: +33 (0)1.48.18.50.00 www.ubisoft.com 7.5 Schedule of financial announcements planned for fiscal year 2003/2004: Date First quarter sales Second quarter sales Half yearly results...

  • Page 112
    ... more than a million units worldwide. Add-On: official program for a game consisting of additional levels, new characters, improved features, etc. An add-on extends the life of a product. They are often sold separately and require the original game. Avatar: a semi-imaginary character that represents...

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    ... 2.3.2 General Information Issuer Applicable regulations (foreign companies) Capital Special features (limitation on the exercise of voting rights etc.) Authorized unissued capital Potential capital Historical table of changes in share capital Securities market Table of changes in share price and...

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    ... financial statement and notes Off-balance sheet commitments Professional fees for auditors and members of their networks Pro forma financial information Regulatory prudential ratios (for banks, insurance companies and brokers) Corporate accounts and notes 2.1 2.1.4.4 7.3 Nothing this year...

  • Page 115
    ...Red Storm Entertainment, Inc. Red Storm Entertainment, Inc. is a Ubi Soft Entertainment company. Tom Clancy's The Sum of All Fears is a trademark of Jack Ryan Enterprises, Ltd. under license to Ubi Soft Entertainment. Ubi Soft Entertainment and the Ubi Soft logo are registered trademarks of Ubi Soft...

  • Page 116
    ... 61 USA San Francisco Ubi Soft Entertainment Inc. 625 Third Street, 3rd floor San Francisco - CA 94107 Tel : 1 415 547 4000 Fax : 1 415 547 4001 Morrisville Red Storm Entertainment Inc. 3200 Gateway Centre Boulevard Suite 100 Morrisville - NC 27560 Tel : 1 919 460 1776 Fax : 1 919 460 1502 ROMANIA...