Ubisoft 2016 Annual Report Download - page 139

Financial statements
5
Consolidated fi nancial statements asatMarch31, 2016
The amount of ineffective derivative instruments qualifying for hedge accounting under IAS 39 is recognized in fi nancial income.
Exposure to foreign exchange risk
(inthousands of currency units) USD GBP CAD AUD
Net position before hedging* 491,692 112,102 (265,933) 48,669
Futures contracts (121,300) (32,100) 200,000 (8,000)
Net position after hedging 370,392 80,002 (65,933) 40,669
* Transaction position brought about by any operation triggering a payment or future earnings
Credit and counterparty risk
Exposure to credit risk
Credit risk refl ects the risk of fi nancial loss to the Group in the event
that a customer or counterparty to a fi nancial instrument may fail
to meet its contractual obligations. This risk is mainly incurred on
trade receivables and investment securities.
The Group’s exposure to credit risk is mainly infl uenced by customer-
specifi c factors. The statistical profi le of customers, notably including
the risk of bankruptcy for each sector of activity and country in which
customers operate, has no real infl 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 customer, the North America distribution zone,
accounts for 12% of Group sales excluding tax. The top 5 account
for 42.5% and the top 10 for 60%.
Moreover, in order to protect itself against the risk of arrears, the
Group’s main subsidiaries, which generate approximately 58% of
Group sales, are all covered by credit insurance.
At closing, the maximum credit risk exposure, represented by the carrying amount of fi nancial assets, was as follows:
Notes
03/31/16 03/31/15
Carrying
amount Provisions Net carrying amount Net carrying amount
Trade receivables 6 420,097 520 419,577 23,904
Other current trade receivables 7 100,985 - 100,985 113,855
Foreign exchange derivatives 8 13,780 - 13,780 3,870
Stock futures 8 - - - 1,049
Current tax assets 41,464 - 41,464 12,380
Cash and cash equivalents 9 461,375 - 461,375 656,661
A provision for bad debts is recognized following an individual
analysis of trade receivables due at the statement of fi nancial position
date.
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 IFRS 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 diversifi es its investments with top tier counterparties
and monetary instruments with less than three months’ maturity.
As at March 31, 2016, investments consisted of UCITS, deposit
accounts and interest-bearing accounts.
Securities risk
Risk to the Company’s shares
Own 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 €1.5 million for the implementation of
this agreement.
400,000 shares were purchased on the market (assigned to employee
shareholdings) under the 6th resolution of the General Meeting of
June 30, 2011.
- Registration Document 2016 137