Ubisoft 2016 Annual Report Download

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and Annual Report
2016
Registration
Document

Table of contents

  • Page 1
    Registration Document 2016 and Annual Report

  • Page 2
    ... Board of Directors of Ubisoft Entertainment SA 3.4 Auditors 6 Information on the Company and its capital 185 186 188 199 202 203 6.1 Legal information 6.2 Share capital and stock ownership 6.3 Securities market 6.4 Securities other than equity securities 20 51 75 76 6.5 Financial communication...

  • Page 3
    ... to run the Group's business as they are the best reï¬,ection of its recurring performance and exclude the majority of non-operating and non-recurring items. A reconciliation between the IFRS and non-IFRS measures is provided in the appendices to the annual earnings release published on May 12, 2016...

  • Page 4
    2 - Registration Document 2016

  • Page 5
    ...employees and fans. The future looks bright for the industry as a whole and for Ubisoft. PC and console growth, expansion into new continents, including Asia, billions of new players on mobile phones, the formidable potential of Virtual Reality and eSport and the expansion of our brands beyond video...

  • Page 6
    ..., and that the management report information listed on page 208 of Chapter 7 is a true presentation of the evolution of the business activity, revenue and financial position of the Group and all companies consolidated therein, as well as a description of the main risks and uncertainties facing them...

  • Page 7
    1 1.1 Key figures QUARTERLY AND ANNUAL CONSOLIDATED SALES SALES BY PLATFORM 1.3 6 7 SALES BY GEOGRAPHIC REGION 8 1.2 - Registration Document 2016 5

  • Page 8
    ... 100 0 Q1 Q2 Q3 Q4 2015/2016 2014/2015 Sales (in â,¬ millions) Q1 Q2 Q3 Q4 FINANCIAL YEAR TOTAL 2015/2016 96 111 562 625 1,394 2014/2015 360 124 810 170 1,464 Change at current exchange rates -73.2% -10.8% -30.6% 267.7% -4.8% Change at constant exchange rates -75.4% -16.8% -35.8% 250.3% -10...

  • Page 9
    Key figures 1.2 Sales by platform 42% 1 32% 26% 20% 14% 12% 13% 13% 6% 3% 4% 3% 4% 2% 1% 5% PC Pla t yS ati on ® 3 Pla t yS ati on ® 4 X X BO 36 0™ XB O OX ne ™ W ii™ W ii U ™ Ot he r 2015/2016 2014/2015 - Registration Document 2016 7

  • Page 10
    1 Key figures 1.3 Sales by geographic region The breakdown of Group sales by geographic region is as follows (in â,¬ millions): TOTAL WORLD: 2015/2016: 1 394 2014/2015: 1 464 659 667 TOTAL EUROPE: 2015/2016: 570 2014/2015: 634 47 % 46 % 224 144 253 114 120 8% 8% 111 117 8% 8% 121 9% 119 ...

  • Page 11
    2 2.1 Group presentation GROUP PROFILE AND STRATEGY HISTORY SUBSIDIARIES AND EQUITY INVESTMENTS 2.5 10 10 2015/2016 FINANCIAL YEAR 15 2.2 2.3 2.5.1 Financial year highlights 15 2.5.2 Changes in the income statement 15 2.5.3 Change in WCR and debt levels 16 11 2.6 OUTLOOK 18 Investments ...

  • Page 12
    ... strategy Ubisoft's® main business activities are centered around the production, publishing and distribution of video games for consoles, PC, smartphones and tablets in both physical and digital formats. Ubisoft stands out from its direct competitors due to its unique ability to develop new brands...

  • Page 13
    ... the development of design tools and game engines. The Group has continued its strategy of reorganization in line with industry developments and is developing its expertise toward the area of online and mobile gaming. ♦ September 2015: creation of the subsidiary, Ubisoft Création SAS, in France...

  • Page 14
    ... SAS (1) France Ubisoft Motion Pictures Splinter Cell SAS (1) France (3) Support Ubisoft International SAS France Ubisoft Learning & Development Sarl France Ubisoft CRC Ltd (1) United Kingdom Production/Distribution Ubisoft Mobile Games Sarl France Owlient SAS France Future Games of London Ltd...

  • Page 15
    ... driven mainly by the Knowledge Management department, to develop various tools and sharing platforms to support knowledge capitalization. On the other hand, the re-use of the technological building blocks that are vital to the creation of a video game is encouraged and allows the production team to...

  • Page 16
    ... significant working capital requirements. In addition, progress in the development of digital activity is expected to relieve financing requirements associated with the physical production of marketed products. Other sources of finance Over the 2015/2016 financial year, the Ubisoft Group used...

  • Page 17
    ... exclusively in the development of mobile games. ❙ 2.5.2 CHANGES IN THE INCOME STATEMENT December 2015 - Announcement of the development of Eagle Flightâ„¢ This virtual reality game, where gamers ï¬,y over Paris, will be available on the main virtual reality platforms, including PlayStation...

  • Page 18
    ... the revised target of â,¬150 million. This compares to a non-IFRS current operating profit of â,¬170.5 million in 2014/2015. The change in non-IFRS current operating profit breaks down as follows: The average IFRS tax rate was 24% due to recognition of future changes in French corporation tax on...

  • Page 19
    ... on disposals +/- Other income and expenses calculated +/- Internal development and license development costs Non-IFRS cash flows from operations Inventory Trade receivables Other assets Trade payables Other liabilities +/- Change in non-IFRS WCR linked to operating activities Total non-IFRS cash...

  • Page 20
    ... due to the growth in the console and PC market and the strong growth in digital revenues. In mid-February 2016, the Group announced its targets: ♦ for 2016/2017: • Sales of approximately â,¬1,700 million, • Non-IFRS current operating profit of around â,¬230 million; ♦ for 2018/2019...

  • Page 21
    ... INTERNAL CONTROL AND RISK MANAGEMENT 3.3 STATUTORY AUDITORS' REPORT ON THE REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS OF UBISOFT ENTERTAINMENT SA AUDITORS 75 76 20 20 39 46 51 3.1.1 Corporate governance 3.1.2 Risk factors 3.1.3 Internal control and risk management 3.1.4 Further information...

  • Page 22
    ... control and risk management This report, prepared in accordance with the provisions of Article L. 225-37 of the French Commercial Code, was made available to the Audit Committee on May 11, 2016, and approved by the Board of Directors at its meeting held on May 12, 2016. The main parties involved...

  • Page 23
    ... 31, 2016, Yves Guillemot, corporate executive officer of the Company, is also a director of the companies Guillemot Corporation SA, Gameloft SE, Rémy Cointreau SA and Lagardère SCA. The Company considers that appointments held in companies active in business sectors other than the video gaming...

  • Page 24
    ...Name Yves Guillemot (5) Claude Guillemot (5) Position in the Company Director Chairman and Chief Executive Officer Director Executive Vice President, Operations Director Executive Vice President, Development Strategy and Finance Director Executive Vice President, Publishing and Marketing Director...

  • Page 25
    ... 488 790 The Board of Directors does not have members representing employee shareholders, since the minimum threshold of 3% of the share capital held by employees (as prescribed by Article L. 225-23 of the French Commercial Code) has not been reached to date. At March 31, 2016, the percentage...

  • Page 26
    ..., risks, risk management and internal control Report of the Chairman of the Board of Directors on corporate governance, internal control and risk management Rules governing the composition of the Board of Directors According to the Company's Articles of Association, the Board of Directors shall...

  • Page 27
    ... in which he/she may be directly or indirectly involved. The Board's powers and responsibilities In accordance with the provisions of Article L. 225-35 of the French Commercial Code and its internal rules, the Board of Directors decides the Company's policies and oversees their implementation. It...

  • Page 28
    3 Governance, risks, risk management and internal control Report of the Chairman of the Board of Directors on corporate governance, internal control and risk management In addition, the Board of Directors is kept informed of the Group's targets and strategy in line with its culture and values. ...

  • Page 29
    ... may invite the lead director to report on his work. Work during the 2015/2016 financial year This committee was created on November 20, 2013. Its internal rules, which are attached to the internal rules of the Board of Directors, describe its responsibilities and operating procedures in particular...

  • Page 30
    3 Governance, risks, risk management and internal control Report of the Chairman of the Board of Directors on corporate governance, internal control and risk management Responsibilities The Audit Committee is responsible for monitoring the preparation of accounting and financial information, the...

  • Page 31
    ...executive teams with the business strategy, and to implement performance conditions. Work during the 2015/2016 financial year The Compensation Committee met six times during the year. The attendance rate was 100%. The Committee met to: 18th (capital increase reserved for members of a group savings...

  • Page 32
    ... of the Board of Directors on corporate governance, internal control and risk management and/or clarify the information contained in the publication on the principles of compensation and (ii) provide clarification on its operating procedure and decision-making processes. During 2016 and 2017...

  • Page 33
    ...and operation of the Company, mainly by offering responsive and effective decision-making in a changing and highly competitive environment to provide and strengthen the cohesion of the entire organization (strategy and operations), and thus facilitate and streamline the decision-making process. This...

  • Page 34
    ...French Commercial Code. This authorization was renewed on May 12, 2016 with the same limits and conditions. CONFLICTS OF INTEREST AND AGREEMENTS INVOLVING DIRECTORS, THE CHIEF EXECUTIVE OFFICER OR EXECUTIVE VICE PRESIDENTS In accordance with the internal rules of the Board of Directors, all Company...

  • Page 35
    ... trading in the Company's securities during the following periods: ♦ for each calendar quarter, for a period of fifteen days before the publication of consolidated sales, due to take place during the quarter concerned; ♦ no service agreements between members of the Board of Directors...

  • Page 36
    ..., Ubisoft World SAS, Tiwak SAS, Ubisoft Computing SAS, Ubisoft Marketing International SAS, Ubisoft Development SAS, Ubisoft Editorial SAS, Ubisoft Operational Marketing SAS, Ubisoft Support Studios SAS, Ubisoft Motion Pictures Far Cry SAS, Ubisoft Motion Pictures Ghost Recon SAS General Manager...

  • Page 37
    ... of Ubisoft Norway A/S (Norway) EXPIRED POSITIONS OUTSIDE THE GROUP (LAST FIVE FINANCIAL YEARS) France Executive Vice President and director of Guillemot Brothers SE Abroad Director of Gameloft Iberica (Spain), Gameloft Inc. (United States) (1) Publicly traded company - Registration Document 2016...

  • Page 38
    ... YEARS) N/A EXPIRED POSITIONS OUTSIDE THE GROUP (LAST FIVE FINANCIAL YEARS) France Executive Vice President of Gameloft SA Executive Vice President and director of Guillemot Brothers SE Abroad Director of Gameloft Inc. (United States) (1) Publicly traded company 36 - Registration Document 2016

  • Page 39
    ...Gameloft Rich Games Production France SARL Executive Vice President and director of Guillemot Corporation SA (1) Director of AMA SA CEO of Guillemot Brothers SAS Abroad Chairman of Gameloft Software (Beijing) Company Ltd (China), Gameloft Software (Chengdu) Company Ltd (China), Gameloft Srl (Romania...

  • Page 40
    ... Report of the Chairman of the Board of Directors on corporate governance, internal control and risk management Christian GUILLEMOT Director since: 02/28/88 Expiry of term of office at the General Meeting approving the financial statements for the FY ended: 03/31/17 Main position in the Company...

  • Page 41
    ... Report of the Chairman of the Board of Directors on corporate governance, internal control and risk management Laurence HUBERT-MOY Director since: 06/27/13 Expiry of term of office at the General Meeting approving the financial statements for the FY ended: 03/31/17 Main position in the Company...

  • Page 42
    ... of these new business models, Ubisoft becomes exposed to new risks, becomes increasingly dependent on its ability to develop and make money from its FTP games, and faces heightened competition. 3.1.2.1 Group's business risks RISKS ASSOCIATED WITH MARKET CHANGES Ubisoft operates on a market that is...

  • Page 43
    Governance, risks, risk management and internal control Report of the Chairman of the Board of Directors on corporate governance, internal control and risk management RISKS ASSOCIATED WITH PRODUCT STRATEGY, POSITIONING AND BRAND MANAGEMENT Ubisoft, like all publishers, is dependent on the success ...

  • Page 44
    ... Directors on corporate governance, internal control and risk management RISK OF DEPENDENCY ON CUSTOMERS SHARE OF THE MAIN CUSTOMERS IN THE GROUP'S SALES EX-VAT Share in % Top customer Top 5 customers Top 10 customers 2015/2016 12% 42.5% 60% 2014/2015 12% 38% 53% 2013/2014 10% 32% 47% Ubisoft...

  • Page 45
    ..., its main work involves: 3.1.2.2 Legal risks RISKS ASSOCIATED WITH INTELLECTUAL PROPERTY RIGHTS Ubisoft has chosen to develop its brands in-house, meaning that it holds all intellectual property rights to these games and can offer them via any type of device, product or service. This strategy also...

  • Page 46
    ... systems of PEGI (Pan European Game Information) in Europe and ESRB (Entertainment Software Rating Board) in the United States. Committed to protecting its players and complying with video game industry practices and policies, the Group is actively involved in the work of numerous bodies: the ISFE...

  • Page 47
    Governance, risks, risk management and internal control Report of the Chairman of the Board of Directors on corporate governance, internal control and risk management 3.1.2.3 Market risks FINANCIAL RISKS In the course of its business, the Group is exposed to varying degrees of financial risk (...

  • Page 48
    ... internal control Report of the Chairman of the Board of Directors on corporate governance, internal control and risk management March 31, 2016, the Group had a â,¬250 million syndicated loan, â,¬12 million in loans, â,¬60 million in bilateral credit lines and other bank credit facilities totaling...

  • Page 49
    ... and internal control Report of the Chairman of the Board of Directors on corporate governance, internal control and risk management ♦ secure the Company's decision-making and processes to help it achieve its objectives; ♦ promote consistency of actions with Company values; ♦ involve Company...

  • Page 50
    ... the Board of Directors on corporate governance, internal control and risk management performance through regular appraisals, development plans, appropriate training, stock options, employee share subscription plans, etc. the accounting and financial information. This department is the main point...

  • Page 51
    ...Risk Security and Management Department is responsible for ensuring and organizing the protection of Ubisoft activities, which include but are not limited to the security of applications, information systems, online games, human resources and property. The team has also established rules and control...

  • Page 52
    ...international presence, Ubisoft combines the standardized coverage of global risks with the specific management of local risks. The main insurance programs coordinated by the Group relate to: ♦ commercial liability insurance: since 2013, this worldwide program offers coverage for: • operations...

  • Page 53
    ... for business travel or expatriates. These are managed locally in accordance with requirements and local regulations. Through these programs, the Group aims to offer comprehensive and extensive coverage for risks and pays particular attention to the financial conditions offered. Total premiums...

  • Page 54
    3 Governance, risks, risk management and internal control Compensation of corporate officers AMOUNTS PAID FOR THE FINANCIAL YEAR ENDED MARCH 31, 2016 Board of Directors Fixed Yves Guillemot Claude Guillemot Michel Guillemot Gérard Guillemot Christian Guillemot Estelle Métayer Didier Crespel ...

  • Page 55
    ... of the competition (current and future) - a strategic action plan focused on 3 main areas (core business, the development of new markets and options for the future) ♦ Digital progress (1/3 of the 20%) compared to N-1 ♦ Employee satisfaction: to be assessed based on teams of "key people" for...

  • Page 56
    ... to internal and share price performance conditions Annual variable compensation (1) 145,000 (3) Exceptional compensation (2) N/A Performance shares (3) (accounting valuation) â,¬617,965 Directors' fees â,¬40,000 BREAKDOWN The compensation of Mr. Yves Guillemot, Chairman and Chief Executive Of...

  • Page 57
    ... the 20 trading days preceding the Board of Directors' meeting granting the shares The details of the performance conditions and the expected levels of achievement, precisely calculated and predefined, cannot be disclosed without revealing confidential information about the Group's strategy over...

  • Page 58
    ... preference shares (AGAP) SOP granted during the financial year ended March 31, 2016 General Meeting Board of Directors Corporate officer Claude Guillemot Michel Guillemot Number Price for the financial year â,¬26.85 (2) â,¬26.85 (2) Exercise period Internal performance conditions assessed...

  • Page 59
    Governance, risks, risk management and internal control Compensation of corporate officers AGAP granted during the financial year ended March 31, 2016 General Meeting Board of Directors Performance conditions Number 167 AGAP (1) Corporate officer Period durations Vesting: 3 years Retention: 2...

  • Page 60
    ..., risks, risk management and internal control Compensation of corporate officers 3.2.3.2 Allocations during the financial year ended March 31, 2016 During the past financial year, the Board of Directors, following authorization from the General Meeting, granted the share subscription options...

  • Page 61
    ... event of a change in control of the company Ubisoft Entertainment SA within the meaning of Article L. 233-3 of the French Commercial Code, the share purchase and/or subscription option plans (the "Options") and the free share plans (the "Shares"), with the exception of those relating to Corporate...

  • Page 62
    ... information for all Group companies combined 126,100 Plan number Average weighted price â,¬17.94 Expiry date n° 30 09/22/2020 3.2.3.5 Summary of free share plans valid as at March 31, 2016 Date of General Meeting Date of Board meeting Performance conditions Number of beneficiaries Corporate...

  • Page 63
    ..., risk management and internal control Compensation of corporate officers Options exercised during the financial year ended 03/31/16 by the ten employees other than executive officers who exercised the largest number of options Complete information for all Group companies combined 571,900 Plan...

  • Page 64
    3 Governance, risks, risk management and internal control Compensation of corporate officers 3.2.3.6 Summary of subscription option and share purchase plans valid as at March 31, 2016 Plan General Meeting Board of Directors Number of beneficiaries Number granted of which corporate executive of...

  • Page 65
    ... performance conditions: Plan of 10/29/2013 (41 beneficiaries)/ Plan of 03/17/2014: Yves Guillemot - The non-achievement of these conditions was recorded by the meeting of the Compensation Committee on June 26, 2014 and resulted in the cancellation by the Board of Directors on July 1, 2014 of...

  • Page 66
    ..., risks, risk management and internal control Compensation of corporate officers ❙ 3.2.4 SUMMARY TABLES (COMPENSATION OF CORPORATE EXECUTIVE OFFICERS) In accordance with Article L. 225-102-1, paragraphs 1 and 2 of the French Commercial Code, below is a breakdown of the total compensation...

  • Page 67
    ..., risks, risk management and internal control Compensation of corporate officers Yves Guillemot, Chairman and Chief Executive Officer Compensation components due or granted Year to March 31, 2016 Amounts or accounting valuation submitted for a vote Presentation Grant of 1,333 preference shares...

  • Page 68
    ..., risks, risk management and internal control Compensation of corporate officers Claude Guillemot, Executive Vice President Compensation components due or granted Year to March 31, 2016 Fixed gross annual compensation Annual variable compensation Deferred variable compensation Multi-annual...

  • Page 69
    ..., risks, risk management and internal control Compensation of corporate officers Michel Guillemot, Executive Vice President Compensation components due or granted Year to March 31, 2016 Fixed gross annual compensation Annual variable compensation Deferred variable compensation Multi-annual...

  • Page 70
    ..., risks, risk management and internal control Compensation of corporate officers Gérard Guillemot, Executive Vice President Compensation components due or granted Year to March 31, 2016 Fixed gross annual compensation Annual variable compensation Deferred variable compensation Multi-annual...

  • Page 71
    ..., risks, risk management and internal control Compensation of corporate officers Christian Guillemot, Executive Vice President Compensation components due or granted Year to March 31, 2016 Fixed gross annual compensation Annual variable compensation Deferred variable compensation Multi-annual...

  • Page 72
    ... Company is not controlled by any other company within the meaning of Article L. 233-16. The total gross compensation paid by the Company to corporate executive officers during the financial year amounted to 881 thousand euros. During the 2015/2016 financial year, members of the Board of Directors...

  • Page 73
    ..., risks, risk management and internal control Compensation of corporate officers 03/31/16 Gérard Guillemot, Executive Vice President Compensation due for the financial year (1) 03/31/15 Ubisoft Other companies 79,431 (4) 79,431 - Ubisoft Other companies 86,902 (4) Valuation of multi-annual...

  • Page 74
    ..., risks, risk management and internal control Compensation of corporate officers TABLE 2 SUMMARY OF THE COMPENSATION OF CORPORATE EXECUTIVE OFFICERS PAID BY THE ISSUER AND BY ANY OTHER COMPANY (ARTICLE L. 233-16 OF THE FRENCH COMMERCIAL CODE) 03/31/16 Yves Guillemot Chairman and Chief Executive...

  • Page 75
    Governance, risks, risk management and internal control Compensation of corporate officers 03/31/16 Gérard Guillemot Executive Vice President Gross fixed compensation before tax Annual variable compensation Multi-annual variable compensation Exceptional compensation Ubisoft directors' fees Bene...

  • Page 76
    3 Governance, risks, risk management and internal control Compensation of corporate officers TABLE 3 DIRECTORS' FEES AND OTHER COMPENSATION PAID TO NON-EXECUTIVE CORPORATE OFFICERS 03/31/16 Corporate executive officer Estelle Métayer Fixed component (3) 03/31/15 Directors' fees Ubisoft 25,...

  • Page 77
    ...Ubisoft Entertainment SA This is a free translation into English of the statutory auditors' report issued in French prepared in accordance with Article L.225-235 of the French commercial code on the report prepared by the Chairman of the Board of Directors on the internal control procedures relating...

  • Page 78
    ...Governance, risks, risk management and internal control Auditors 3.4 Auditors Names Primary auditor: KPMG SA represented...Date of original appointment Expiration of current term 2003 2019 2013 2019 2010 2016 2010 2016 Professional fees of the Statutory Auditors and members of their networks...

  • Page 79
    ... Encouraging local development 4.4.3 Partnership with our local communities 4.4.4 Sponsorship actions 4.4.5 Subcontractors and suppliers 4.4.6 Fair operating practices 4.4.7 Other actions taken to protect human rights 4.5 89 INDEPENDENT THIRD PARTY'S REPORT 100 - Registration Document 2016 77

  • Page 80
    ... is to develop globally applicable directives for reporting on companies' economic, environmental and social performance. ❙ 4.1.4 CHANGE IN METHOD/CONDITIONS COMPARED WITH THE PREVIOUS YEAR ♦ Change in the scope of reporting linked to employee-related indicators for which information is only...

  • Page 81
    ... Group as of the reporting date. Specifications on the methods for collecting data ♦ As regards employee-related indicators, these are collected: • either directly, using the Business Object reporting tool, which makes it possible to exploit data from the human resources management software...

  • Page 82
    ...03/31/16 10,667 03/31/15 9,790 (1) Total headcount excluding the Canadian subsidiary Hybrid Technologies Inc. (93 employees), not currently integrated in the Group's human resources scope of reporting Breakdown of staff by business line Production Business 03/31/16 8,993 1,674 % 84.3% 15.7% 03...

  • Page 83
    ... in line at the Company against a backdrop of strong growth. Ubisoft provides them with a career path with a high level of input and genuine learning opportunities. Ubisoft offers targeted programs: ♦ several sites have teamed up with local universities or organizations to train future developers...

  • Page 84
    ...March 2015. To ensure that its staff always get the right support, Ubisoft gives special consideration to employee wellness, with a bespoke human resources policy and a friendly, collaborative work environment. Talent retention programs are implemented each year, mostly in the form of employee share...

  • Page 85
    ... on social media, encouraging women to apply for certain jobs such as programming. The French sites comply with (1) 2,700 employees at the end of March 2016 (2) 430 employees at the end of March 2016 (3) UDC: Ubisoft Developers Conference, the company's largest annual event for sharing expertise...

  • Page 86
    ... (1) Number of disabled workers at the end of the period Employment rate of disabled persons 03/31/16 29 0.27% 03/31/15 21 0.25% (1) Information determined from companies outside of France > 100 employees and French companies (accounting for 92.04% of Group employees at the end of March 2016...

  • Page 87
    Corporate social responsibility Employee-related indicators ❙ 4.2.3 SKILLS DEVELOPMENT creativity are the skills sought. Team players are vital to the Group's business and the capacity to work as a team is now an added focus of team development. Ubisoft recruits talented people who are ...

  • Page 88
    ... the Group also endeavors to have an open-plan layout to encourage face-to-face communication. In all, 92.5% of employees believe that their "direct managers are accessible and available when they need them". Lastly, Ubisoft encourages corporate events. Each subsidiary organizes annual social events...

  • Page 89
    ... of France > 100 employees and French companies (accounting for 92.04% of Group employees at the end of March 2016) (3) Number of occupational accidents with time off/total per company (average annual headcount * theoretical number of annual hours worked per employee) x 1,000,000 (4) Number of days...

  • Page 90
    ... staff on key issues such as employee wellness, career management, teamwork and communication. The results are published within the Group via the internal social network as a way to engage in a direct discussion with employees and draw up targeted action plans. Lastly, the corporate social network...

  • Page 91
    ... at each site to evaluate the environmental policies, programs and indicators employed. Data on the Group's environmental impact solely covers its direct video game production and publishing activities. 4 4.3.1.1 General organization The Sustainable Development Department set up in 2014 has the...

  • Page 92
    ... ground for the development of initiatives to reduce the studio's environmental footprint and to offer a comfortable work environment for employees; ❙ 4.3.2 ADAPTING TO CLIMATE CHANGE Due to the nature of its business activities and the location of its sites, Ubisoft is not directly affected by...

  • Page 93
    ... group under the brand "Holiday Bikes", where employees who are traveling on business can rent a bike to get from the hotel to the Ubisoft office. (1) Information gathered from non-French sites > 25 employees and French sites, accounting for 97 .8% of the Group's workforce at the end of March 2016...

  • Page 94
    ...needs of the growing digital and online business. The countries with the highest consumption, such as Canada and France, include the power consumption of energy-intensive server rooms. Server room consumption (in thousands of kWh) Montreal Paris TOTAL 2015 4,387 2,610 6,997 2014 3,313 2,260 5,573...

  • Page 95
    ...2016. In addition, software has been installed to monitor consumption and optimize system operation. In Montreal, the large-scale "Castle" project for the renovation of part of the real estate portfolio of the subsidiary "Ubisoft Entertainment Inc.", which began in 2014, will introduce energy-saving...

  • Page 96
    4 Corporate social responsibility Environmental indicators 4.3.3.3 Water consumption and supply Taking into account the Group's business activities, it only uses water for domestic purposes. In 2015, water consumption (1), as measured by the Group, stood at 49.034 m3 compared with 35.904 m3 the ...

  • Page 97
    ... materials helps to reduce demand for virgin materials and save the world's natural reserves. In the UK, the Future Games of London subsidiary has developed a partnership with the movement "Fin Free", which campaigns for the protection of sharks, a subject linked to one of the mobile games developed...

  • Page 98
    ...bring together partner companies to commit to offering support to young entrepreneurs for an 18-month period, in the form of coaching in different fields via their employees (development, human resources, marketing, communications, legal, etc.). (1) Accounting for 95.7% of the Group's workforce at...

  • Page 99
    ... design a video game with the help of Ubisoft mentors; partners: Several studios have joined forces with universities and colleges to incorporate new technologies and the art of gaming into teaching and learning. ♦ "One-day internships" teach young people about the careers available in the video...

  • Page 100
    ... at the University of Montreal. The Canadian subsidiary makes an annual contribution of CAD 200,000 (1). The Toronto studio is working with Sheridan and its SIRT program (2) on a research project to develop movement sensors and virtual reality cameras. have held an inter-school competition to...

  • Page 101
    ... materials are used in its product design. 4.4.5.3 Outsourcing As part of its video game production, publishing and distribution business, Ubisoft mainly outsources services pertaining to IT support, external/freelance development and related activities. In 2015, this accounted for 17% of the...

  • Page 102
    ... Corporate social responsibility Independent third party's report ❙ 4.4.6 FAIR OPERATING PRACTICES through its involvement with video game industry trade associations such as SELL in France and the PédaGoJeux website. During the life cycle of a game, the production and distribution teams work...

  • Page 103
    Corporate social responsibility Independent third party's report ❙ RESPONSIBILITY OF THE COMPANY The Board of Directors of Ubisoft Entertainment SA is responsible for preparing a management report including CSR information provided for in Article R. 225-105-1 of the French Commercial Code, ...

  • Page 104
    .... Paris - La Défense and Rennes, June 20, 2016 KPMG S.A. Anne Garans Partner Climate Change and Sustainable Development Department Vincent Broyé Partner (1) Employee-related indicators: Total number and distribution by age, gender, geographic area, type of contract and business line, number of...

  • Page 105
    ... of change in equity 5.1.5 Cash ï¬,ow statement 5.1.6 Notes to the consolidated financial statements 5.1.7 Professional fees of the statutory auditors and members of their networks SEPARATE FINANCIAL STATEMENTS OF UBISOFT ENTERTAINMENT SA FOR THE YEAR ENDED MARCH 31, 2016 154 Balance sheet Income...

  • Page 106
    ... 1,752,472 Capital Premiums Consolidated reserves Consolidated earnings Total equity Provisions Employee benefit liabilities Non-current financial liabilities Deferred tax liabilities Non-current liabilities Current financial liabilities Trade payables Other liabilities Current tax liabilities...

  • Page 107
    ... non-current operating income and expenses Operating profit (loss) Interest on borrowings Income from cash Net borrowing cost Result from foreign-exchange operations Other financial expenses Other financial income Net financial income Total income tax INCOME FOR THE PERIOD ** Earnings per share...

  • Page 108
    ...436 Total equity 810,048 86,849 54,021 140,870 - POSITION AT 03/31/14 Net income Other comprehensive income Profit (loss) Allocation of consolidated profit (loss) in N-1 Change in the share capital of the parent company Options on ordinary shares issued Sales and purchases of own shares POSITION...

  • Page 109
    ...liabilities (excluding deferred tax liabilities) Change in WCR linked to operating activities Current income tax expense Total cash flow generated by operating activities ** Cash ï¬,ows from investing activities Payments for internal and external developments *** Payments for other intangible assets...

  • Page 110
    ... Information on the management of financial risks Trade payables Other liabilities Sales Operating expenses by destination Operating expenses by type Other non-current operating income and expenses Net financial income Income tax and deferred taxes Earnings per share Segment reporting Related...

  • Page 111
    ... is intended to finance capital goods. November 2015: Subscription of a new credit line Ubisoft Entertainment SA subscribed a new â,¬10 million bilateral credit line with a one-year term. This credit line complies with the same covenants as the syndicated loan. March 2016: Sale of â,¬24.7 million...

  • Page 112
    ... 1, 2015 and not early adopted by the Group Ubisoft has not opted for an early application of the new standards, amendments or interpretations published at March 31, 2016 (adopted or being adopted by the European Union) and presented below: Standards Annual Improvements to International Financial...

  • Page 113
    ... other businesses; ♦ the effect of changes in foreign currency exchange rates or fair value. The published amendments aim to clarify provisions for the recognition of deferred tax assets related to debt instruments measured at fair value, in response to diversity in practice. This standard results...

  • Page 114
    ...Depreciation on commercial software Employee benefits Payments in shares Provisions Sales Corporation tax Key sources of estimation Where appropriate, presentation of the main valuation methods and assumptions used when identifying intangible assets on business combinations and Earn-Out assessment...

  • Page 115
    ... SA exercises significant inï¬,uence on the financial and operational policies but no control. The consolidated financial statements include the Group share in the total amount of profits and losses recognized by the associates, using the equity accounting method, starting from the date...

  • Page 116
    ... to services future remains to be returned. If an entity is disposed of, related goodwill will be taken into account when determining the loss or gain resulting from this sale. with market data available at the time of preparation of the Group's financial statements. The discount rate applied to...

  • Page 117
    ...games), whether outsourced to Group subsidiaries or externally, are recognized in Types of non-current assets Commercial software developments External developments Engines and tools Information system developments Depreciation method 1 to 3 years, straight-line, starting on the commercial release...

  • Page 118
    ... in the balance sheet. Investments in associates Investments in associates include the Group's share of the equity held in companies accounted for under the equity method, together with any related goodwill. Recognition and measurement of financial assets (excluding derivatives) In accordance with...

  • Page 119
    ... some countries, video game production operations qualify for public grants. These grants are presented in the accounts of the studios as a reduction in R&D costs, and in the parent company accounts as a reduction in the assets corresponding to the development of the benefiting commercial software...

  • Page 120
    ... on the basis of market prices at the closing date. Payments based on equity instruments Stock option plans provide an additional incentive for employees to improve the Group's performance by allowing them to purchase a stake in the Company (stock options, free shares, Group savings scheme). In...

  • Page 121
    ... ♦ Group employee savings plan: the accounting expense is equal to the discount granted to employees, i.e. the difference between the share subscription price and the share price at the date of the grant. This expense is recognized immediately on the plan subscription date. ♦ Free share grants...

  • Page 122
    ... and the exercise of rights. ♦ the recognition of an asset or liability in a transaction that is not a business combination and which affects neither accounting profit nor taxable profit; Segment reporting The operating segments reported correspond to the publication/ production activities and...

  • Page 123
    ... Internationale SAS Ubisoft Toronto Inc. Ubisoft Montpellier SAS Ubisoft Paris SAS Ubisoft Entertainment Sweden AB FC = Full consolidation Country France United Kingdom United States Germany Romania Canada France China France France Canada France France Sweden Percentage control Parent company 100...

  • Page 124
    ...,906 The change in goodwill, at constant exchange rates, can be attributed to impairments recognized as a result of impairment tests on March 31, 2016 (See Note 21). The net carrying amount of goodwill as at March 31, 2016 is allocated as follows: At 03/31/15 CGU Publishing/production Distribution...

  • Page 125
    ... 31, 2016: Type of CGU or group of CGUs tested Publishing/production Production/distribution Discount rate leading to an impairment 10.16% 57.47% EBIT growth rate leading to an impairment -11.0% -83.7% NOTE 2 OTHER INTANGIBLE ASSETS At 03/31/16 Non-current assets Released commercial software...

  • Page 126
    ...Tower SAS during the year. Depreciation and amortization Released commercial software Released external software developments Commercial software in production External software developments in progress Office software Brands Movies being marketed Other TOTAL AT 03/31/16 TOTAL AT 03/31/15 Opening...

  • Page 127
    ... of foreseeable events to date, the Group considers that potential changes in the assumptions described in Note 5.1.6 "Impairment testing of non-current assets" would not lead to a surplus in the carrying amount compared with the recoverable value. The recoverable value of brands is nine times their...

  • Page 128
    ...232 107 4,339 4,162 The change in other non-current receivables primarily reï¬,ects purchases and sales of own shares held under the liquidity agreement. NOTE 5 INVENTORY AND WORK IN PROGRESS Inventory and work in progress Goods TOTAL AT 03/31/16 TOTAL AT 03/31/15 Opening balance 25,883 25,883...

  • Page 129
    .../31/16 Current financial assets Foreign exchange derivatives * Stock futures TOTAL 03/31/15 Net 13,780 13,780 Gross 13,780 13,780 Impairment - Net 3,870 1,049 4,919 * Foreign exchange derivatives: Foreign exchange derivatives whose market value at the year-end is positive are reported at fair...

  • Page 130
    ... is also conferred at the date of issue on registered shares granted free of charge to a shareholder on the basis of old shares that enjoyed this right. NUMBER OF UBISOFT ENTERTAINMENT SA SHARES: AT 04/01/15 Option exercises Free share grants Group savings scheme Reserved capital increase AT 03/31...

  • Page 131
    ..., the Group buys its own shares on the market. As at March 31, 2016, the Company held 3,647,838 own shares: ♦ liquidity agreements: 45,800 shares valued at â,¬1,224 thousand (down â,¬152 thousand on March 31, 2015); ♦ treasury shares in the process of being canceled: 1,248,214 shares valued at...

  • Page 132
    ... financial statements. Tax audits underway for which no proposed adjustments have been received: ♦ Ubisoft Entertainment SA and Ubisoft International SAS for the period from April 1, 2012 to March 31, 2015; the audit began in March 2016 and, to date, primarily relates to the Company's income tax...

  • Page 133
    ...23rd plan Total number of shares granted Start of exercise period Expiry date of options Strike price of options Maturity (in years) Volatility Risk-free interest rate Estimated dividend rate Annual turnover rate Fair value of options after stock split (in â,¬/share) Options at April 1, 2015 Options...

  • Page 134
    ... statements as at March 31, 2016 26th plan Total number of shares granted Start of exercise period Expiry date of options Strike price of options Maturity (in years) Volatility Risk-free interest rate Estimated dividend rate Annual turnover rate Fair value of options after stock split (in â,¬/share...

  • Page 135
    ... date Maturity - vesting period (in years) Fair value of the instrument in â,¬ per share Percentage of operating targets reached Number of instruments as at April 1, 2015 Number of instruments granted during the period Number of cancelled instruments during the period Number of instruments exercised...

  • Page 136
    ...Group savings scheme Ubisoft also offers Group savings schemes, which allow workers to acquire Ubisoft shares as part of reserved capital increases. Employees acquire these shares with a maximum discount of 15% versus the average opening price over the 20 trading days prior to the Board of Directors...

  • Page 137
    ...nancial statements as at March 31, 2016 NOTE 15 INFORMATION ON THE MANAGEMENT OF FINANCIAL RISKS In the course of its business, the Group may be exposed to varying degrees of interest-rate, foreign exchange, financing, liquidity, counterparty and credit risks. The Group has put in place a policy...

  • Page 138
    ... are top tier banking institutions. Also, given the seasonal nature of the Group's business activities, there is a limited number of open positions at the statement of financial position date. As a result, the credit value adjustment (entity's own risk) is deemed to be immaterial. At closing, the...

  • Page 139
    ... of activity and country in which customers operate, has no real inï¬,uence on credit risk. Given the large number of customers in many different countries, and their presence in the mass retail sector, the Company considers the counterparty risk on trade accounts to be limited. Ubisoft's largest...

  • Page 140
    ...The risks associated with these receivables are transferred to the counterparty of the factoring agreement; the receivables are derecognized from the statement of financial position of the Group. Following an amendment made in March 2014, Ubisoft Entertainment Inc. receives 85% of the sale price of...

  • Page 141
    ... by accounting class and category 03/31/16 Notes Assets recognized at fair value Foreign exchange derivatives Stock futures Equity investments in non-consolidated companies Net investment securities Assets recognized at amortized cost Trade receivables Other trade receivables Current tax...

  • Page 142
    ... million for Related Designs Software GmbH, â,¬7.8 million for Future Games of London Ltd; Deferred income mainly comprises â,¬34 million in deferred income on revenue from digital sales recognized from the moment that the digital content is made available on download platforms. ♦ incentive...

  • Page 143
    ...511 5 France Research, video game, CICE, audiovisual and other tax credits Singapore Economic Development Board tax credit United -Kingdom Video game tax credit Other Abu Dhabi Other TOTAL * The payment of certain grants and tax credits is contingent upon the generation of taxable income Two Four...

  • Page 144
    ... 31, 2016 Amortization and provisions 03/31/16 Total Amortization of intangible assets Released commercial software Commercial software in production External developments Office software Brands Movies being marketed Other Amortization and depreciation of property, plant and equipment Buildings...

  • Page 145
    ...of the CGI (French General Tax Code) for software development expenses; ♦ in the United Kingdom, the tax group includes four companies: Ubisoft Ltd, Ubisoft Reï¬,ections Ltd, Future Games of London Ltd and Ubisoft CRC Ltd. As at March 31, 2016, the tax group generated a current income tax expense...

  • Page 146
    5 Financial statements Consolidated financial statements as at March 31, 2016 Deferred tax relating to the operations of the French tax group is recognized at the tax rate applicable to the parent company (34.43%). Deferred tax relating to the operations of the Group abroad is recognized at the ...

  • Page 147
    ... March 31, 2016 Deferred tax Breakdown by nature of tax on the statement of financial position and income statement Foreign Change in other exchange comprehensive losses/ income gains 03/31/15 * Intangible assets Elimination of margin on intangible assets Capitalized losses and tax credits Losses...

  • Page 148
    ...of the French tax group over the past year remains therefore capitalized as at March 31, 2016. Because of a transfer price policy implemented by the Group, the distribution companies and companies fulfilling support functions systematically report operating profits. Similarly, the studios invoice...

  • Page 149
    ...amortization of commercial software and external software development, royalties, etc.) (3) Expenses linked to stock-based compensation are recognized by the parent company but relate to employees in all geographic regions Other items in the income statement, particularly other operating income and...

  • Page 150
    ...nancial position date is â,¬(695) thousand. Ubisoft Entertainment SA has not bought back treasury shares from related parties. ♦ production subsidiaries billing the parent company for development costs based on the progress of their projects; ♦ the parent company invoicing sales and marketing...

  • Page 151
    ... market conditions. There are no other significant transactions with related parties. NOTE 27 OFF-BALANCE SHEET COMMITMENTS Off-balance sheet commitments related to Company financing Summary Type Commitments given by Ubisoft Entertainment SA Financial guarantees Commitments received by Ubisoft...

  • Page 152
    5 Financial statements Consolidated financial statements as at March 31, 2016 NOTE 28 STAFF Permanent staff broke down as follows at March 31, 2016: 03/31/16 Americas EMEA/Pacific TOTAL 4,052 6,615 10,667 03/31/15 3,929 5,861 9,790 The average headcount in 2015/2016 was 10,225. NOTE 29 ...

  • Page 153
    ... and services directly related to the auditor's work ♦ ♦ Issuer Fully consolidated subsidiaries Subtotal Other services rendered by the networks of the fully consolidated subsidiaries ♦ ♦ Legal, tax, social Other (> 10% of audit fees) 754 655 100% 100% Subtotal TOTAL - Registration...

  • Page 154
    ..., 2016, with regard to: ♦ the audit of the consolidated financial statements of Ubisoft Entertainment SA, as attached to this report; ♦ the basis for our assessment; ♦ the specific verification required by law. The consolidated financial statements were approved by the Board of Directors...

  • Page 155
    ...fication required by law of the information provided in the Management report of the Group. We have no matters to report regarding the accuracy of this information and its consistency with the consolidated financial statements. Statutory Auditors Rennes, June 20, 2016 KPMG Audit Division of KPMG...

  • Page 156
    5 Financial statements Separate financial statements of Ubisoft Entertainment SA for the year ended March 31, 2016 5.3 Separate financial statements of Ubisoft Entertainment SA for the year ended March 31, 2016 ❙ 5.3.1 Assets Depreciation and Gross amortization 1,345,252 12,619 414,489 1,772,...

  • Page 157
    ... exchange losses Total financial expenses NET FINANCIAL INCOME NET INCOME FROM CONTINUING OPERATIONS NON-RECURRING ITEMS NET INCOME BEFORE TAX Income tax PROFIT (LOSS) FOR THE PERIOD (1) Including income relating to associated companies (2) Including expenses relating to associated companies 22...

  • Page 158
    ... Trade payables Other liabilities Total changes in working capital Net cash generated by operating activities Cash ï¬,ows from investment activities Acquisitions of intangible assets Acquisitions of property, plant and equipment Acquisitions of equity investments Acquisitions of other non-current...

  • Page 159
    Financial statements Separate financial statements of Ubisoft Entertainment SA for the year ended March 31, 2016 ❙ 5.3.4 NOTES TO THE SEPARATE FINANCIAL STATEMENTS CONTENTS Financial year highlights Comparability of financial statements Accounting rules and methods Notes to the balance sheet...

  • Page 160
    ...game, The Crew. September 1, 2015: formation of Ubisoft Création SAS in France. December 2015: Arrangement of a â,¬5 million loan agreement Ubisoft Entertainment SA took out a â,¬5 million loan, the final repayment date of which is December 31, 2018. The loan is intended to finance capital goods...

  • Page 161
    ...of Ubisoft Entertainment SA for the year ended March 31, 2016 Depreciation, amortization and value impairment methods Types of non-current assets Commercial software developments External developments Engines and tools Information system developments Depreciation method 1 to 3 years, straight-line...

  • Page 162
    ... for the development of software according to Article 236 of the CGI (French General Tax Code). Borrowings and financial liabilities Borrowings are recognized under liabilities according to their payment dates. Unused agreements at the statement of financial position date are listed in the...

  • Page 163
    ... is solely the result of capitalized production. Depreciation and amortization Released commercial software developments Released external software developments Commercial software developments in progress External software developments in progress Brands and operating licenses Other TOTAL 03/31/16...

  • Page 164
    5 Financial statements Separate financial statements of Ubisoft Entertainment SA for the year ended March 31, 2016 NOTE 2 PROPERTY, PLANT AND EQUIPMENT (in â,¬ thousands) Depreciation and Gross amortization 765 10,674 48 1,132 12,619 126 4,436 19 666 5,247 03/31/...

  • Page 165
    ... statements of Ubisoft Entertainment SA for the year ended March 31, 2016 NOTE 3 NON-CURRENT FINANCIAL ASSETS 03/31/16 (in â,¬ thousands) 03/31/15 Net 324,576 1,372 966 326,914 Gross 332,945 80,518 1,026 414,489 Impairment 6,975 6,975 Net 325,970 80,518 1,026 407,514 Equity investments...

  • Page 166
    ... Government (VAT credit, tax) Partner current account advances Other miscellaneous debtors TOTAL The change in partner current account advances corresponds to the advances made to subsidiaries to finance their specific business needs. The change in the "Government" line item mainly corresponds to...

  • Page 167
    ...Receivables on non-current assets Other non-current financial assets Receivables on current assets Advances and prepayments made Trade receivables Government (VAT credit, sundry) Group and associates Other miscellaneous debtors Prepaid expenses TOTAL Statement of liabilities at March 31, 2016 (in...

  • Page 168
    5 Financial statements Separate financial statements of Ubisoft Entertainment SA for the year ended March 31, 2016 NOTE 8 ACCRUED INCOME 03/31/16 Associated company - credit notes to receive Income not yet invoiced * Interest receivable on current accounts Interest receivable from banks TOTAL *...

  • Page 169
    .... At the end of March 2016, trade payables totaled â,¬(542) thousand. management at parent company level of the bank accounts of the majority of the Group companies; NOTE 13 EQUITY Statement of changes in equity Capital increase Allocation of 2013/2015 03/31/15 earnings 8,478 78,197 727 150...

  • Page 170
    ... corporate officers and to the satisfaction of attendance requirements for employee beneficiaries of stock option plans, are as follows: Subscription options 23rd plan Total number of shares granted Start of exercise period Expiry date of options Strike price of options Options at April 1, 2015...

  • Page 171
    ... statements of Ubisoft Entertainment SA for the year ended March 31, 2016 27th plan Total number of shares granted Start of exercise period Expiry date of options Strike price of options Options at April 1, 2015 Options granted during the period Options exercised during the period Options cancelled...

  • Page 172
    5 Financial statements Separate financial statements of Ubisoft Entertainment SA for the year ended March 31, 2016 Free share grants settled in shares Free share grants, which are subject to performance conditions, are locked in for a two, three, or four year period following the grant date. As ...

  • Page 173
    ... Ubisoft also offers Group savings schemes to allow workers in France and abroad to acquire Ubisoft shares as part of reserved capital increases. Workers acquire these shares with a maximum discount of 15% versus the average opening price over the 20 trading days prior to the Board of Directors...

  • Page 174
    5 Financial statements Separate financial statements of Ubisoft Entertainment SA for the year ended March 31, 2016 NOTE 15 BORROWINGS 03/31/16 Bonds (1) Medium/long-term borrowings Accrued interest (1) Bank overdrafts Borrowings Fixed-rate debt Variable-rate debt (2) 03/31/15 60,000 205,000 ...

  • Page 175
    ... statements of Ubisoft Entertainment SA for the year ended March 31, 2016 NOTES TO INCOME STATEMENT NOTE 18 PRODUCTION FOR THE PERIOD Production for the period comprises: ♦ sales, essentially made up of intra-group invoicing of contributions; ♦ capitalized production reï¬,ecting development...

  • Page 176
    5 Financial statements Separate financial statements of Ubisoft Entertainment SA for the year ended March 31, 2016 NOTE 20 OTHER PURCHASES AND EXTERNAL EXPENSES 03/31/16 Production services subcontracted to subsidiaries Production services subcontracted to external developers Other purchases ...

  • Page 177
    ...statements of Ubisoft Entertainment SA for the year ended March 31, 2016 Foreign exchange risk The Company's exposure to foreign exchange risk stems from operating cash ï¬,ows and its investments in foreign subsidiaries. The Company only hedges its exposures on cash ï¬,ows from operating activities...

  • Page 178
    ... received by Ubisoft Entertainment SA Lines of credit received and not utilized Syndicated loan Committed lines of credit Committed lines of credit 07/09/19 10/06/16 07/23/17 275,000 250,000 10,000 15,000 Loan guarantee Payment guarantee for acquisition price of shares in Future Games of London Ltd...

  • Page 179
    ... resolutions of the General Meeting of September 23, 2015 authorize the Board of Directors to allocate free preference shares and/or ordinary share purchase and/or subscription options to corporate executive officers of the Company. Corporate executive officers in receipt of the award under the...

  • Page 180
    5 Financial statements Separate financial statements of Ubisoft Entertainment SA for the year ended March 31, 2016 of internal performance (subscription options and preference shares) and share price performance (preference shares) conditions. The total gross compensation owed by the Company to ...

  • Page 181
    Financial statements Separate financial statements of Ubisoft Entertainment SA for the year ended March 31, 2016 Accounting value of shares held (in â,¬ thousands) Percentage of capital held (as a %) Loans and advances granted by the Company and not yet paid (in â,¬ thousands) Revenue excluding...

  • Page 182
    ...♦ the audit of the annual financial statements of Ubisoft Entertainment SA, as attached to this report; ♦ the basis for our assessment; ♦ the specific verifications and information required by law. The annual financial statements have been prepared by the Board of Directors. It is our task...

  • Page 183
    ... standards applicable in France. We have no comments regarding the accuracy of the information provided in the management report prepared by the Board of Directors or in the documents sent to shareholders concerning the financial position and annual financial statements, or regarding the...

  • Page 184
    ... in accordance with, French law and professional auditing standards applicable in France. Dear Shareholders, In our capacity as Statutory Auditors of your company, we hereby report to you on regulated agreements and commitments. We are required to inform you, based on the information provided to us...

  • Page 185
    Financial statements Ubisoft (parent company) results for the past five financial years 5.6 Ubisoft (parent company) results for the past five financial years Exercise Capital (in â,¬) Number of ordinary shares Number of preference shares Maximum number of shares to be created: through the ...

  • Page 186
    5 Financial statements 184 - Registration Document 2016

  • Page 187
    ... rights 6.2.9 Factors likely to have an impact in the event of a public offering 6.3.1 Entity managing securities services 6.3.2 Ubisoft share data 6.3.3 Change in the share price over the last 24 months 6.3.4 Transactions covered by Article L. 621-18-2 of the French Monetary and Financial Code...

  • Page 188
    ... games, educational and cultural software, cartoons and literary, cinematographic and television works on any media, current or future; ♦ the distribution of all kinds of multimedia and audiovisual products, especially through new communication technologies such as networks and online services...

  • Page 189
    ... ("Weighted Share Price") on the Conversion Date ("Conversion Ratio"). It is understood that the Board of Directors will determine, on the date of allocation: General Meetings (Article 13 of the Articles of Association) General Meetings will consist of all shareholders of Ubisoft Entertainment SA...

  • Page 190
    ...shows the number of shares created between April 1, 2015, and March 31, 2016: AT 04/01/15 Exercise of subscription options Free share grants Group savings plan (PEG) Reserved share capital increase AT 03/31/16 109,396,612 SHARES 2,549,595 shares 128,195 shares 134,116 shares 179,300 shares 112,387...

  • Page 191
    ... capital on the day of use by the Board Date of use 2015/2016 Issue from 04/01/15 to 03/31/16 See section 6.2.7 N/A 06/19/15 N/A 128,195 shares created (1) N/A Reduction of capital by cancellation 09/23/15 of treasury shares 11th resolution Capital increase by capitalization of reserves, income...

  • Page 192
    ... resolution (2) ♦ Employees ♦ Executive Committee 09/23/15 21st resolution (2) ♦ Corporate Executive Officers Duration Expiry date Maximum use 1.7% of the capital on the day of the Board's decision ♦ 1.1% in ordinary shares ♦ 0.6% in preference shares Date of use 2015/2016 Issue from...

  • Page 193
    Information on the Company and its capital Share capital and stock ownership ❙ 6.2.4 Date of Board meeting (2) 04/05/13 06/17/13 07/18/13 CHANGES IN CAPITAL IN THE THREE FINANCIAL YEARS TO MAY 12, 2016 Number of shares issued 753,040 187,864 221,006 Amount (in cash) Type of transaction ...

  • Page 194
    ...(the "Buyback Program"). The Board of Directors used this authorization at its meeting of September 23, 2015 and, in addition, reiterated this authorization, as required, on February 20, 2016, within the context of an employee stock ownership project involving an international group savings plan via...

  • Page 195
    ... Average price on sale Number of shares canceled over the year Execution fees NUMBER OF SHARES HELD IN THE COMPANY'S NAME AS AT 03/31/16 Value of shares held in the Company's name as at 03/31/16 Number of shares used over the year Reallocation taking place over the year Percentage of capital held...

  • Page 196
    ... option plans, free shares allocation plans or any other allocations of shares to Group employees and/or corporate officers, or for the benefit of some SUMMARY STATEMENTS OF TRANSACTIONS COMPLETED FROM MAY 12, 2015 * TO MAY 12, 2016, THE DATE OF THIS REPORT Percentage of own shares held directly...

  • Page 197
    ...% Ubisoft Entertainment SA FCPE Ubi Actions Public 3,647,838 3.246% 824,916 0.734% 98,179,162 87.357% 112,387,818 TOTAL 100% (1) The concert, composed of the companies Guillemot Brothers SE and Guillemot Corporation SA and the Guillemot family, held 9,667 ,585 double voting rights at March 31, 2016...

  • Page 198
    ...309% 80.642% 100% Capital Number of shares Guillemot Brothers SE Yves Guillemot Claude Guillemot Michel Guillemot Gérard Guillemot Christian Guillemot Other members of the Guillemot family Guillemot Corporation SA CONCERT Ubisoft Entertainment SA FCPE Ubi Actions Public TOTAL 6,555,764 988,567 732...

  • Page 199
    ... 225-100-3 of the French Commercial Code, the following factors may have an impact in the event of a public offering. Restrictions on exercising voting rights and transferring shares set forth in the Articles of Association - Clauses of agreements brought to the Company's attention Article 6 of the...

  • Page 200
    ... of a change of control of Ubisoft Entertainment SA within the meaning of Article L. 233-3 of the French Commercial Code, these plans shall immediately cease to be contingent upon a) the beneficiaries being, on the date of exercise of the Option(s) or change in ownership of the Shares, employees or...

  • Page 201
    ... code Place listed Par value UBISOFT SHARE DATA FR0000054470 Euronext Paris - Division A â,¬0.0775 (1) Number of shares outstanding as at 03/31/16 Closing price on 03/31/16 (2) Market capitalization as at 03/31/16 Flotation price on 07/01/96 Five-for-one stock split on 11/11/00 Two-for-one stock...

  • Page 202
    6 Information on the Company and its capital Securities market ❙ 6.3.3 Month April 2014 May 2014 June 2014 July 2014 August 2014 CHANGE IN THE SHARE PRICE OVER THE LAST 24 MONTHS Highest price (in â,¬) Lowest price (in â,¬) Volume traded (in shares) 13.77 14.90 15.34 14.04 13.05 13.95 14.49 ...

  • Page 203
    ...â,¬52,932.60 â,¬529,754 â,¬53,397.50 â,¬132,500 â,¬246,339.35 â,¬388,869.70 â,¬124,200 â,¬124,200 , 2013 (1) Delivery on November 4, 2015 of 393,139 Ubisoft Entertainment SA shares within the context of the performance of a forward sale contract dated September 27 - Registration Document 2016 201

  • Page 204
    ...of control at Ubisoft Entertainment SA. Early redemption: Applicable in the event of certain events of default customary for this type of transaction and/or, in particular, a change in the Company's situation. The prospectuses relating to the listing of the bonds can be consulted on the websites of...

  • Page 205
    ... at the Company's registered office or business address (28, rue Armand Carrel - 93100 Montreuil-sous-Bois, France). In addition, some of these documents are available on the ❙ 6.5.2 Q1 sales H1 results Q3 sales FINANCIAL REPORTING CALENDAR FOR THE 2016/2017 FINANCIAL YEAR Date Week commencing...

  • Page 206
    6 Information on the Company and its capital 204 - Registration Document 2016

  • Page 207
    7 Cross-reference tables REGISTRATION DOCUMENT CROSS-REFERENCE TABLE MANAGEMENT REPORT CROSS-REFERENCE TABLE CSR CROSS-REFERENCE TABLE 206 ANNUAL REPORT CROSS-REFERENCE TABLE 208 209 211 - Registration Document 2016 205

  • Page 208
    ... RESPONSIBLE STATUTORY AUDITORS SELECTED FINANCIAL INFORMATION - Key figures RISK FACTORS INFORMATION ON THE ISSUER Company history and evolution Company name and trading name Registration number and location Date of incorporation and term Registered office, legal form, applicable law, country...

  • Page 209
    ... on employee profit-sharing in the issuer's capital MAIN SHAREHOLDERS Breakdown of capital and voting rights Different voting rights Control of the issuer Agreement that could lead to a change of control RELATED PARTY TRANSACTIONS FINANCIAL INFORMATION ON THE ASSETS, FINANCIAL POSITION AND SALES OF...

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    ... access to the capital Employee profit-sharing as at the closing date of the period Factors likely to have an impact in the event of a public offering MISCELLANEOUS Significant equity and control investments during the financial year in companies whose registered office is located in France...

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    ... region Hires and redundancies/dismissals Compensation and its evolution Organization of labor Organization of working hours Absenteeism Employee relations Organization of social dialogue Collective agreements Health and safety Health and safety conditions in the workplace Agreements signed...

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    ...employee-related and environmental responsibilities Importance of subcontracting Fair operating practices Actions taken to prevent corruption Measures taken to protect consumer health and safety Other action taken to protect human rights OTHER INFORMATION LISTED IN ARTICLE L. 225-102-1 OF THE FRENCH...

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    ...the French Commercial Code Statement by the person responsible for the information contained in the Registration Document Statutory Auditors' fees Report by the Chairman of the Board of Directors on the conditions for the preparation and organization of the work of the Board and the internal control...

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    212 - Registration Document 2016

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    ... of Future Games of London. Future Games of London is a company of Ubisoft Entertainment. © 2005-2015 Ubisoft Entertainment. All Rights Reserved. Based on Prince of Persia® created by Jordan Mechner. Prince of Persia is a trademark of Waterwheel Licensing LLC in the US and/or other countries used...

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    ...Ubisoft Entertainment 28, rue Armand Carrel 93108 Montreuil-sous-Bois Cedex Tel: +33 (0)1 48 18 50 00 Fax: +33 (0)1 48 57 07 41 Australia Austria Belgium Brazil Bulgaria Canada China Denmark Finland France Germany Hong Kong India Italy Japan Korea Mexico Morocco Netherlands Poland Romania Singapore...