Ubisoft 2006 Annual Report Download - page 121

CORPORATE ACCOUNTS OF UBISOFT ENTERTAINMENT SA AS OF MARCH 31, 2007
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1/ Equity swap contract:
Under the terms of the transaction concluded with Calyon
on September 30, 2003 and extended on February 28,
2006 for two years, Calyon will sell its shares at the end of
the transaction on February 28, 2008.
As a result of the 2-for-1 stock split, the contractual sale
price was set at €9.33 (versus the original price of €18.66)
and the number of shares increased to 1,836,274.
Any fluctuations in the share price in relation to the sale
price of €9.33 will be fully recognized by Ubisoft
Entertainment SA (changes between the signature date of
the contract and the expiration date are recorded in
temporary accounts pending a final adjustment.
Unrealized gains are not recorded in the income
statement. A provision for risks and charges must be
recorded for any unrealized gains). At March 31, 2007,
unrealized gains totaled €39,095 thousand.
During the fiscal year, 200,000 shares were sold under the
equity swap contract, which reduced the number of shares
to 1,436,274.
In light of the shares sold (1,436,274 shares), the impact of
a reduction in the sale price (€9.33) of one euro would be
€1,436 thousand.
Calyon may transfer all or a portion of these shares in
advance at Ubisoft Entertainment SA’s request.
2/ Authorizations
Short-term bilateral lines of credit amount to €93 million; 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, 2007.
The revolving loan in the amount of €10 million is confirmed
but had not been used at March 31, 2007.
3/ Other commitments
- Since the personnel consists of officers of the company,
no retirement benefits are owed.
- Various products are marketed in accordance with licen-
sing contracts signed by Ubisoft Entertainment SA.
The commitments made by the company provide for the
payment of guaranteed minimum royalties. At March 31,
2007, commitments made by virtue of this guaranteed
minimum amounted to €37.8 million.
- France's law of May 4, 2004 grants French employees an
individual right to training. Under this law, employees may
receive training at their initiative, with their employer's
approval.
Full-time employees acquire a right to between 20 and 21
hours of training each year, in accordance with the labor
agreements applicable within each firm.
The rights acquired annually may be accrued for up to six
years.
- During the next fiscal year, reductions in the calculation
of income tax will be as follows (no increases have been
identified):
- Organic €118 thousand
- Exchange rate fluctuations €868 thousand
€986 thousand
- Ubisoft Entertainment SA has pledged to provide
financial support to its subsidiaries to meet their cash
requirements.
Compensation
of managers
Ubisoft Entertainment SA paid €546 thousand to its
corporate officers during the 2006/07 fiscal year in com-
pensation.
In –only partial – compensation for their work and the time
spent in preparing for, and actively participating in, meetings
of the Board, the General Meeting of September 25, 2006
authorized the company to pay directors’ fees totalling
€250 thousand per year maximum.
During the 2006 fiscal year the Members of the Board of
Directors received €135 thousand in directors’ fees.
Following the resignation of Ms. Yvette Guillemot on June
23, 2006, Mr. Marc Fiorentino was co-opted by the Board
of Directors on July 10, 2006. This co-option was approved
at the General Meeting of September 25, 2006.
No obligation has been undertaken by the company in
favour of its corporate officers related to their termination
or change in employment, such as in the event of a takeover
bid.
No loans or advances were made to the company’s
managers as provided by Article L225-43 of the French
Commercial Code.
The members of the Board of Directors did not receive any
stock options or share subscriptions during the fiscal year
just ended.
Potential assets
and liabilities
- Deposition:
The lawsuit which pended between the company and a
licensee since October 2003 concerning breach of license
agreement has been handed down in Ubisoft Entertainment
SA favor. The total amount will be known in the next few
months.
Events after
closing of accounts
- Acquisition:
On April 6, 2007, acquisition of the Anno™ brand through
the buyout of the German publisher Sunflowers Interactive
Entertainment Software GmbH for €14.2 million.
Through the transaction, Ubisoft will acquire a 30% stake
in Related Designs Software GmbH, which developed Anno
1701. Ubisoft reinforces its position in the real-time
strategy market. Anno™, along with Ubisoft’s The
Settlers®, is one of the most well known franchises in
Germany.
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