Ubisoft 2008 Annual Report Download - page 86

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UBISOFTANNUAL REPORT 2009
3/ Interest-rate risk
Interest-rate risk is mainly incurred through the Group's interest-bearing debt. This is essentially euro-denominated and centrally
managed. Interest-rate risk management is primarily designed to minimise the cost of the Group's borrowings and reduce
exposure to this risk. For this purpose, the Group uses primarily xed-rate loans for its long-term nancing needs, and variable-
rate loans to nance specic needs related to increases in working capital during particularly busy periods.
As of March 31, 2009, the Group’s net debt included a variable-rate loan and bank overdrafts which, given the Group’s positive net
cash position, are used essentially to nance the high year-end working capital requirement as a result of the highly seasonal
nature of the business.
The sensitivity of debt to a change in interest rates is described in Note 16 to the consolidated nancial statements.
1.1.7.4.2 Counterparty risk
The Group is exposed to counterparty risk – mostly banking related – in the course of its nancial management. The aim of
the Group’s banking policy is to focus on the creditworthiness of its counterparties and thus reduce its risks.
1.1.7.4.3 Securities risk
1/ Risk to the Company's shares
In accordance with its share buyback policy and within the authorisations granted by the Shareholders’ Meeting, the Company
may decide to buy back its own shares. The uctuations in the price of shares bought in this way have no impact on the Group’s
income.
2/ Risk on other shares
The Group holds equity investments in listed companies. For these shares, a signicant and/or prolonged drop in the share price
may have an adverse effect on the Group’s income.
As of March 31, 2009, equity investments included Gameloft shares, the market value of which is reected in the balance sheet
(see Note 9 to the consolidated nancial statements).
1.1.7.5 Insurance and risk coverage
Description of insurance
The Group benets from professional liability coverage taken out by Ubisoft Entertainment SA, covering all of the worldwide
subsidiaries except those in the United States, Canada and Japan, which each have their own local insurance policies.
Each subsidiary is covered in particular for:
• property damage,
• vehicles,
• apartments leased to employees on assignment,
• inventory,
• transport to customers, etc.
Each foreign subsidiary tailors and manages its local coverage according to its business and the specic characteristics of each
country.
All policies have been renewed, and for some subsidiaries enhanced, to ensure maximum, appropriate coverage of risks.