Ubisoft 2006 Annual Report Download - page 108

UBISOFT • FINANCIAL REPORT 2007
Notes to the corporate accounts
The following notes and tables, presented in thousands of
euros, are an integral part of the annual financial statements
for the fiscal year ended March 31, 2007 and constitute an
appendix to the balance sheet.
The fiscal year covered a period of 12 months from April 1,
2006 to March 31, 2007.
Highlights
of the fiscal year
- 2-for-1 stock split:
On December 5, 2006, the Board of Directors decided to
carry out a 2-for-1 split of Ubisoft’s share effective
December 11, 2006.
- Share capital increases:
In February 2007, Ubisoft Entertainment SA increased its
equity ownership of Ubi Games SA through the capitalization
of the current account totaling CHF 2,500 thousand or
€1,537 thousand.
- Own shares:
In October 2006, 200,000 shares were sold by Calyon
under the equity swap contract.
- Other items:
In January 2007, Ubi Computer Software Beijing Company
Co. Ltd. was liquidated.
The OCEANE bond reached maturity on November 22,
2006. The bond was settled through the redemption of
1,290,288 OCEANE and the conversion of 459,013
OCEANE, which resulted in the creation of 475,998 new
shares with a face value of €0.31.
On February 19, 2007, the Board of Directors authorized
the early redemption of outstanding BSAR and bonds.
During the fiscal year, 1,313,907 BSAR were exercised,
resulting in the creation of 69 shares with a face value of
€0.31 and 2,627,676 shares with a face value of €0.155.
The share subscription warrants issued on May 14, 2003
expired on May 14, 2006. During the fiscal year,
12,767,115 warrants were exercised, resulting in the crea-
tion of 1,702,282 new shares with a face value of €0.155
for a share capital increase of €24 million.
Comparability
of accounts
Since the creation of the liquidity contract on December
22, 2005, own shares are recognized as other long-term
investments, whereas they were shown under investment
securities at March 31, 2005.
Accounting principles
General accounting conventions were applied in accor-
dance with the principle of conservatism and the following
basic rules:
- operational continuity,
- time-period concept,
- fair presentation, regularity and accuracy,
- prudence,
and in accordance with the general rules governing the
preparation and presentation of annual financial state-
ments.
The historical cost principle was applied as the basic
method for the valuation of items shown in the accounts.
The accounting methods applied are consistent with indus-
try practice. Ubisoft Entertainment SA’s annual financial
statements comply with the provisions relating to indivi-
dual accounts contained in Regulation 99-03, approved by
the decree of June 22, 1999.
Accounting
method changes
The changes in accounting methods resulting from the
application of CRC Regulations 2002-10 and 2004-06 as of
January 1, 2005 are described below:
Recognition of brands:
Brand registration costs have been recorded as expenses
since April 1, 2005.
Breakdown and depreciation of fixed assets:
In view of the nature of the assets, no component was
identified. Furthermore, since the service life previously
used to calculate depreciation is identical to the useful
life, the change in accounting regulations has no effect on
earnings for the fiscal year and equity at the start of the
year.
Accounting rules
and methods
Intangible assets
Intangible assets include:
- logos
- office software: amortized over 1 year (straight-line),
- ERP-related expenditures: amortized over 5 years
(straight-line),
- commercial software: amortized over 3 years (straight-
line) with additional amortization to adapt to the pro-
ducts’ life cycles.
- external developments: amortized based on the products’
lifecycles.
3.5.1
3.5.2
3.5.3
3.5.4
3.5.5
3.5