Ubisoft 2007 Annual Report Download - page 100

UBISOFT • FINANCIAL REPORT 2008
Notes to the corporate financial statements
The notes and tables that follow, presented in thousands of
euros, are an integral part of the annual financial state-
ments for the fiscal year ended March 31, 2008 and con-
stitute an appendix to the balance sheet. The fiscal year
covered the 12-month period from April 1, 2007 to March
31, 2008.
Highlights
of the fiscal year
Equity swap agreement on Gameloft stock
On July 12, 2007, Ubisoft Entertainment SA signed two
agreements with Calyon, the investment bank.
The first agreement dealt with the disposal of all
13,367,923 Gameloft shares held by Ubisoft Entertainment
SA (representing 18.73% of Gameloft’s capital) for €6.08
each.
The second related to Ubisoft Entertainment SA’s ability
to continue participating in upward or downward move-
ments in the price of Gameloft stock vis-à-vis the €6.08
per share price set in the first agreement, until such time
as Calyon disposes of the shares to a third party.
Equity swap agreement on Ubisoft stock
193,153 shares covered by the equity swap agreement
signed with Calyon on September 30, 2003 were disposed
of during the year. The disposal generated a capital gain of
€10.8 million.
On February 28, 2008, Ubisoft Entertainment SA extended
the equity swap agreement with Calyon for a further period
of 24 months. The remaining shares were disposed of after
the balance sheet date (see Section 3.6.5).
Acquisitions
On April 6, 2007, Ubisoft acquired the Anno brand as part
of its €14.5 million takeover of Sunflowers GmbH, the
software publisher.
This acquisition also provides Ubisoft Entertainment SA
with a 30% interest in Related Designs Software GmbH,
the developer of Anno 1701 (the latest game in the series),
which is currently working on a new release. Following this
acquisition, Avator Entertainment GmbH was established,
in which Ubisoft Entertainment SA took a 25% interest.
On January 11, 2008, the Group acquired 100% of the
Japanese studio Digital Kids Co. Ltd.
Subscription to capital increases
In March 2008, Ubisoft Entertainment increased its inte-
rest in Ubisoft World SAS by €29,985 thousand.
Incorporations
On September 17, 2007, Chengdu Computer Software Co.
Ltd., a wholly-owned development studio subsidiary of
Ubisoft Entertainment SA, was established.
On February 12, 2008, Ubisoft Singapore Pte Ltd., a
wholly-owned development studio subsidiary of Ubisoft
Entertainment SA, was established.
Disposal
On March 20, 2008, the Group disposed of its 25% inte-
rest in Avator Entertainment GmbH.
Other events
The lawsuit initiated in October 2003 by the Company
against a licensee was settled in favor of Ubisoft
Entertainment SA, which was awarded USD13.2 million
(€8.6 million, €5.1 million received on this fiscal year, and
€3.5 million to be received on April) in compensation and
late payment penalties.
2008 BSAR (redeemable share subscription warrants)
capital increase
On October 25, 2007, the Company issued new shares, with
waiving of preemptive rights, to the former holders of the
2008 BSAR, which had been redeemed early on February
26, 2007. A total of 235,328 ordinary shares were issued
with a par value of €0.155 each, representing a total par
value of €36,475.84, plus premiums of €8,341,200.96
bringing the total increase to €8,377,676.80. The share
subscription price was set at €35.60, in line with the frame-
work established by the General Shareholders' Meeting on
July 4, 2007, namely the €47.71 closing price on October 2,
2007 less a discount of €12.11.
Comparability of
financial statements
The impacts at March 31, 2008 of the changes of options,
described with the §3.6.4 are the following:
expenses related to the acquisition of equity investments:
449 thousands of €;
accelerated depreciation on the commercial software:
24,379 thousands of €.
Accounting principles
General accounting conventions were applied in accor-
dance with the principle of conservatism and the following
basic rules:
3.5.1
3.5.2
3.5.3
3.5