Ubisoft 2012 Annual Report Download - page 40

Management Report
2012
35
The Group is subject to regular tax inspections by the tax authorities in the countries where it is
present.
As part of a tax audit at Ubisoft Divertissements Inc. (Canada) for 1999 to 2003, and 2004 to 2008, a
bilateral transfer price agreement has been initiated with the tax authorities. Pending the final
agreement, the provision of CAD 3 million is unchanged.
A tax audit is underway at Ubisoft Holdings Inc. for the financial year 2008/2009. No proposed
adjustments have been received to date. Consequently, no provision has been made in the accounts.
1.7.2.2 REGULATORY ENVIRONMENT
The Company has developed tools and implemented the requisite procedures to comply at a global
level with local laws and regulations, in particular those relating to consumer protection, also covering
but not limited to information given to consumers on the rules of use and content of games, the
classification of games in accordance with age-rating classifications of PEGI in Europe and ESRB in
the United States, the protection of consumers’ personal data then this data is collected and the
protection of minors (notably by setting up parental consent procedures). The Company has
introduced internal control procedures to check compliance with the above.
It is a member of the ESA (Entertainment Software Association) in the United States and Canada, the
ISFE (Interactive Software Federation of Europe) and the SELL (Syndicat des Éditeurs de Logiciels de
Loisirs) in France, and complies with the classification systems PEGI (Europe) and ESRB (United
States).
1.7.2.3 RISKS ASSOCIATED WITH INTELLECTUAL PROPERTY RIGHTS
Given the importance and intrinsic value of its brands, the Company has taken the necessary
measures to protect its portfolio of commercial brands as well as the other intellectual property rights
that it holds:
 Procedure for checking the pre-existence of brands proposed for games at European and
international level, registration of brands and domain names of games designed at European
and international level,
 Legal monitoring of brands that are similar or identical to those of the Company and that have
been registered by third parties at a global level,
 Legal monitoring of potential Company copyright violations,
 A dedicated anti-piracy team, whose task is to carry out a technology watch, advise
development teams and coordinate action between the various internal and external teams,
 Copyright infringement pressing civil claims in criminal proceedings where applicable, or via
any other available criminal or civil avenues, and measures against hackers in order to obtain
the removal of games illegally put online.
Ubisoft is not dependent on any particular patents.
1.7.2.4 LICENSING AGREEMENT RISKS
Every year, Ubisoft signs a series of partnership agreements with, in particular, prestigious partners
such as film studios, music labels etc., enabling it to develop its game catalogue and increase sales.
The biggest licensor accounts for nearly 3.8% of sales.
The potential interruption of certain partnerships, for whatever reason, at the behest of Ubisoft or its
partners, is likely to have a negative impact on the revenue and future performance of the Company
as it would not be offset by other new licenses.