Ubisoft 2012 Annual Report Download - page 119

Financial Statements
2012
114
Exposure to counterparty risk
All cash must remain highly liquid by limiting capital risk exposure as much as possible. This should
therefore be invested in products with a high degree of security, very low volatility and a negligible risk
of changes in value. All instruments in which the Group invests meet the requirements of IAS 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 diversifies its investments with top tier counterparties and monetary instruments with less
than three months’ maturity.
As at March 31, 2012, the Group’s investments consisted of cash UCITS and certificates of deposit.
Securities risk
Risk to the Company’s shares
Treasury shares are 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.
The Company allocated €1.7 million for the implementation of this agreement over the last financial
year.
400,000 shares were purchased on the market (assigned to employee shareholdings) under the 6th
resolution of the General Meeting of 30 June, 2011.
As at March 31, 2012, the Company held 566,584 treasury shares with a value of €2,491 thousand.
Own shares are deducted from equity at cost of sale.
Risk to other securities
At March 31, 2012, financial assets included €14.6 million in shares in the listed company Gameloft.
On July 12, 2007, Ubisoft Entertainment SA signed two contracts with CACIB. The first concerns the
sale of all Gameloft shares held by Ubisoft Entertainment SA, or 13,367,923 shares at a price of €6.08
per share. The second is the opportunity for Ubisoft to continue to benefit from upward and downward
fluctuations in the share price in relation to the price of €6.08 per share until July 15, 2013.
Under IAS 39, all the risks and benefits have not been transferred; the Gameloft shares have been
classified as available-for-sale current financial assets.
The sale of Gameloft shares on the market by Calyon is recorded in the income statement.
The Gameloft shares not yet sold by Calyon are measured at fair value. The change in fair value of
shares not yet sold by Calyon is recognized in other comprehensive income.
Information on the valuation of these shares is presented in note 9.
A 10% change in the closing price would have an impact of €1.5 million on consolidated equity and
comprehensive income (excluding effect of deferred taxation).