Ubisoft 2016 Annual Report Download - page 137

Financial statements
5
Consolidated fi 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, fi nancing, liquidity,
counterparty and credit risks. The Group has put in place a policy
for managing these risks, which is described below.
Interest-rate risk
Interest-rate risk is mainly incurred through the Group’s interest-
bearing debt. It is essentially euro-denominated and centrally
managed. Interest-rate risk management is primarily designed to
minimize the cost of the Group’s borrowings and reduce exposure
to this risk. For this purpose, the Group uses primarily fi xed-rate
loans for its long-term fi nancing needs and variable-rate loans
to fi nance specifi c needs relating to increases in working capital
during particularly busy periods. The Schuldschein type loan of
€200 million is a mix of variable rates and fi xed rates.
As at March 31, 2016, the Group’s gross debt was primarily comprised
of fi xed rate Euro PP type bonds, a Schuldschein loan with a mix
of variable and fi xed rates, loans, commercial papers and bank
overdrafts, intended essentially to fi nance the high year-end working
capital requirements relating to the highly seasonal nature of the
business.
Analysis of variable-rate net debt’s sensitivity to interest-rate risk
The Group’s exposure to a change in interest rates on net debt is presented in the following table:
Liabilities Type of rate Rate Nominal Interest p.a. Change of 1% Difference
Net cash from bank overdrafts Variable 0.01% 216,610 23 2,189 2,169
Investment securities Variable 0.33% 39,251 129 521 392
Committed line of credit Variable 0.00% (5,000) - (50) (50)
TOTAL 255,861* 152 2,661 2,511
* Excluding accrued interest and fi nance lease borrowing
Liquidity risk
As at March 31, 2016, the Group had fi nancial debt of €503 million and net cash (including liquid assets and short-term investment
securities) of €(42) million.
03/31/16 03/31/15
Financial liabilities excluding derivatives (503,059) (445,341)
Cash 422,123 423,969
Net investment securities 39,252 232,692
NET CASH (41,684) 211,320
To fi nance temporary requirements related to the increase in working
capital during especially busy periods, as at March 31, 2016, the
Group had a €250 million syndicated loan, €12 million in loans,
€60 million in bilateral credit lines and other bank credit facilities
totaling €78 million, and had issued €60 million in Euro PP bonds, a
Schuldschein loan for €200 million, and €15 million in commercial
paper (as part of a program for a maximum amount of €300 million).
The Group implemented cash agreements allowing centralized
management at parent bank level of the bank accounts of the majority
of Group companies.
Covenants
Under the terms of the syndicated loan, bilateral credit lines and
the Schuldschein loan, the Company is required to comply with
certain fi nancial ratios (covenants).
The covenants are as follows:
2015/16 2014/15
Net debt restated for assigned receivables/equity restated for goodwill < 0.80 0.80
Net debt restated for assigned receivables/EBITDA < 1.5 1.5
All covenants are calculated on the basis of the consolidated annual
fi nancial statements under IFRS.
As at March 31, 2016, the Company is in compliance with all these
ratios and expects to remain so during the 2016/2017 fi nancial year.
Other borrowings are not governed by covenants.
- Registration Document 2016 135