Ubisoft 2005 Annual Report Download - page 115

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UBISOFT • 2006 ANNUAL REPORT
FINANCIER
Corporate accounts of Ubisoft Entertainment SA as of March 31, 2006
1. Equity swap contract
As part of the transaction concluded with Calyon on
September 30, 2003 and extended on January 28, 2006 for
two years, Calyon will sell its shares at the close of the
transaction on February 28, 2008. Any fluctuations in the
share price in relation to the sale price of €18.66 will be
recorded in full by Ubisoft. Changes between the date on
which the contract is signed and its expiration will be recor-
ded in temporary accounts pending a final adjustment.
Unrealized gains are not recorded in the income state-
ment. A provision for risk and charges must be included
for any unrealized gains. As of March 31, 2006, unrealized
gains stood at €16,003 thousand.
Since 918,137 shares were sold, the impact of a reduction
in the sale price (€18.66) of one euro would be €918,137.
Calyon may transfer all or a portion of these shares in
advance at Ubisoft’s request.
2. Financial leasing
There are no longer any rentals pertaining to financial
lease contracts recorded in the accounts of Ubisoft
Entertainment SA.
3. Authorizations
Short-term bilateral lines of credit amount to €86.2 mil-
lion; they are unconfirmed and revocable with 30 days’
prior notice. A syndicated loan has been confirmed in the
amount of €100 million; it was not in use as of March 31,
2006.
4. Other commitments
- Since the staff consists of officers of the company, no
retirement compensation is owed.
Various products are marketed under licensing contracts
signed by Ubisoft Entertainment SA. The commitments
accepted by the company provide for the payment of gua-
ranteed minimum royalties. As of March 31, 2006, com-
mitments by virtue of this guaranteed minimum amounted
to €26.4 million.
- France’s law of May 4, 2004 grants French employees an
individual right to training. Under this new law,
employees may receive training at their initiative, with
their employer’s approval. Full-time employees enjoy
the right to between 20 and 21 hours of training each
year, in accordance with the union provisions applicable
within each firm. These hours may be accrued for up to
six years.
- During the next fiscal year, abatements in the calculation
of corporate tax will be as follows (no increases have
been identified):
- Organic €69,000
- Exchange rate fluctuations €276,000
€345,000
- Ubisoft Entertainment SA has pledged to provide financial
support to its subsidiaries to meet their cash requirements.
3.5.8.3 Compensation of corporate
officers
Ubisoft Entertainment SA paid €546 thousand to corpo-
rate officers during the 2005-06 fiscal year as compensa-
tion. No attendance fees were paid. No loans or advances
were made to officers of the company in accordance with
Article L.225-43 of the French Commercial Code.
3.5.8.4 Events after closure of
accounts
- Equity issue reserved for employees
The extraordinary portion of the Combined General
Meeting of July 23, 2004 authorized the Board of
Directors to proceed, on its own initiative, with an equity
issue reserved for French employees, up to a limit of 2.5%
of the total shares comprising the share capital at the time
of use of the authorization by the Board of Directors, spe-
cifically by means of a company mutual investment fund
(FCPE).
At its meeting of December 13, 2005, the Board of
Directors used this authorization, setting the subscription
price of the shares to be issued at €33.38 each, and speci-
fied that these shares would be subscribed for by Ubi
Actions FCPE. The latter subscribed for 21,735 shares on
April 7, 2006.
- Depositions
Since October 2003, a lawsuit has been pending between
Ubisoft Entertainment SA and a licensee concerning
breach of license agreement. Arbitration will take place in
July 2006.
- Conversion of share subscription warrants granted in
May 2003
Ubisoft Entertainment SA proceeded with a capital
increase in the amount of €24 million through the conver-
sion of 96.6% of the share subscription warrants (BSA)
granted in May 2003.