Ubisoft 2008 Annual Report Download - page 168

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UBISOFTANNUAL REPORT 2009
Credit and counterparty risk
Exposure to credit risk
Group credit risk reects the possible nancial loss implied by failure a customer or counterparty to a nancial instrument would
encounter to meet its contractual obligations. This risk is mainly incurred on customer receivables and investment securities.
The Group's exposure to credit risk is mainly inuenced by customer-specic factors. The statistical prole of customers, notably including
the risk of bankruptcy for each sector of activity and country in which customers operate, has no real inuence on credit risk.
Given the large number of customers in many different countries, and their presence in the mass retail sector, the Company believes
the counterparty risk on trade accounts is limited.
Ubisoft’s largest customer accounts for 10% of Group sales excluding tax. The top ve account for 33% and the top 10 for 46%.
Moreover, in order to protect itself against the risk of arrears, the Group’s main subsidiaries, which generate approximately 85%
of Group sales, are all covered by credit insurance.
Exposure to credit risk cannot exceed the carrying amount of nancial assets. Maximum exposure to credit risk at closing was
as follows:
03.31.09 03.31.08
Note Carrying
amount
Provisions Net carrying
amount
Net carrying
amount
Financial assets at fair value through profit and loss 9 - - - 38,839
Asset-held-for sale 9 15,053 - 15,053 25,058
Trade receivables 7 70,940 1,406 69,534 84,226
Other current trade receivables 8 89,652 - 89,652 91,683
Foreign exchange derivatives used for hedging 9 5,557 5,557 445
Current tax assets 19,039 19,039 11,146
Cash and cash equivalents 10 237,207 - 237,207 228,913
Counterparty risk
All cash must remain highly liquid, and the risk to the capital investment must be as minimum as possible. Cash must therefore
be invested in products that are very secure and have very low volatility. All instruments in which the Group invests meet
the requirements of IFRS 7. For instance, some prudential rules must be respected for the Group's cash investments:
• never hold more than 5% of a fund's assets;
• never invest more than 20% of total cash in the same vehicle.
The Group diversies its investments with top tier counterparties, using under three months maturity money-market vehicles.
As at March 31, 2009, the Group’s cash was invested in cash UCITS and certicates of deposit with maturities of under three
months.
There is no investment in highly liquid dynamic monetary mutual funds.
Securities risk
Risk to the company's shares
Treasury stock is held under a market-making and liquidity agreement signed with Exane BNP. These purchases are made under
the terms of a market-making agreement that complies with all applicable regulations, and are designed to ensure the liquidity
of purchases and sales of shares.
As of March 31, 2009, the Company held 80,914 of its own shares with a value of €1 million. Treasury stock is deducted from equity
at cost of sale.