Ubisoft 2007 Annual Report Download - page 110

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UBISOFT • FINANCIAL REPORT 2008
Note 21. Depreciation, amortization and provisions
Depreciation, amortization and provisions break down as follows:
Note 22. Net financial income
Net financial income breaks down as follows:
Share of profit of associates includes the dividends Ubisoft Entertainment SA received during the fiscal year from Ubisoft
Warenhandels GmbH, the Austrian subsidiary that is being liquidated.
(1) Include 193,153 sold shares related to the Equity swap agreement on Ubisoft stock for €10.8 million.
Foreign exchange risk
The Group’s exposure to foreign exchange risk stems from
inter-company operating cash flows and its investments in
foreign subsidiaries.
The Group only hedges its exposures on inter-company
operating cash flows in the main material foreign curren-
cies (US dollar, Canadian dollar, pound sterling and
Australian dollar). Its strategy is to hedge only one year at
a time, so the hedging horizon never exceeds 15 months.
The Group first uses natural hedges provided by transac-
tions in the other direction (development costs in foreign
currency offset by royalties from subsidiaries in the same
currency). The parent company uses foreign currency bor-
rowings, forwards or foreign exchange options to hedge
any residual exposures and non-commercial transactions
(such as inter-company loans in foreign currencies).
As of March 31, 2008, the amounts hedged giving rise to pur-
chases and sales of foreign currencies amounted to €62,223
thousand (see Note 3.6.2 Off-balance sheet commitments).
03.31.08 03.31.07
Amortization of intangible assets 212,746 200,446
Released commercial software 173,664 166,684
External developments 37,315 31,679
Office software 1,704 2,033
Other 63 50
Depreciation of property, plant and equipment 414 415
Fixtures and fittings 398 401
Computer hardware and furniture 14 12
Transportation equipment 2 2
Total 213,160 200,861
03.31.08 03.31.07
Financial income:
Share of profit of associates 1,540 25,618
Income from other securities and receivables on non-current assets 11 18
Other interest received(1) 15,281 3,992
Reversal of provisions 6,620 2,782
Foreign exchange gains 8,330 8,842
Net proceeds on sale of Investment securities 708 380
32,490 41,632
Financial expenses:
Amortization and provisions 1,842 23,019
Other interest paid 6,103 7,923
Foreign exchange losses 16,495 10,399
24,440 41,341
Net financial income 8,050 291