Ubisoft 2016 Annual Report Download - page 132

Financial statements
5Consolidated fi nancial statements asatMarch31, 2016
The Canadian company Ubisoft Entertainment Inc. is currently being
audited for its transfer pricing policies. Discussions are ongoing
between Canadian and French authorities to avoid the potential
issue of double taxation of the Ubisoft Group. In the 2014/2015
fi nancial year, an inspection notice was received for the years FY09
to FY13. This tax inspection was still in progress at March 31, 2016
and, to date, Ubisoft Entertainment Inc. has not received any related
proposals for tax increases. The non-prescribed period which will
likely lead to a tax increase dates back to the year ended on March 31,
2003 (FY03). At March 31, 2016, a provision of €4,858 thousand
was maintained in the absence of any change in the proceedings
since the close of the fi nancial year ended on March 31, 2015.
The provision for other fi nancial risks of CAD$3.3 million at Ubisoft
Entertainment Inc. relates to the risk on the Canadian Credit
Multimedia titles.
Other provisions for risks relate to commercial disputes in progress.
Contingent liabilities
Tax audits underway for which proposed adjustments have been
received:
♦
Ubisoft International SAS for the period from April 1, 2008
to March 31, 2012: the Company fully contests the proposed
income tax adjustment and consequently no provision has been
recognized in the fi nancial statements;
♦
Ubisoft Entertainment India Pvt. Ltd (India) for the period from
April 1, 2009 to March 31, 2012. The Company contests all the
proposed adjustments relating to the transfer pricing policy and
consequently no provision has been recognized in the fi nancial
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;
♦
Ubisoft Montpellier SAS for the period from April 1, 2011 to
March 31, 2014; the audit began in January 2015 and, to date,
primarily relates to the Company’s income tax.
These tax audits are unrelated to each other. Furthermore, it is not
possible to predict when the inspections are due to end.
NOTE12 EMPLOYEE BENEFIT LIABILITIES
Opening
balance Provisions
Change in other
comprehensive
income Reversals
Foreign
exchange gains
andlosses Changes inscope Closing balance
Provisions for post-
employment benefi ts 5,430 1,251 39 (84) (24) 6 6,618
TOTAL AT 03/31/16 5,430 1,251 39 (84) (24) 6 6,618
TOTAL AT 03/31/15 3,715 626 1,109 (50) 30 - 5,430
Assumptions
Japan Italy France India
03/31/16 03/31/15 03/31/16 03/31/15 03/31/16 03/31/15 03/31/16 03/31/15
Wage growth 2.87% 2%
3% and
4.9% 2% 1.5% to 2% 1.5% to 2% 10% 10%
Discount rate 1.78% 1.81% 1.78% 1.81% 1.78% 1.81% 7.90% 9.30%
Average remaining working life 17.01 years 26.16 years
22.85 and
30.89 years 25.92 years 31.35 years 31.63 years 33.17 years 33.34 years
Death rate assumptions are based on published statistics and tables.
The defi nition of and principles for measurement and recognition of
these benefi t liabilities are presented in section 5.1.6 Consolidation
principles – Employee benefi ts.
An increase of 50 basis points in the discount rate would result in
a fall of 10.2% in the amount of the benefi t liability.
A decrease of 50 basis points in the discount rate would result in a
rise of 11.6% in the amount of the benefi t liability.
- Registration Document 2016
130