RAPPORT ANNUEL 2002 1

Transcription

Ubi Soft Entertainment is Europe's number 3 video game publisher
and a world leader
in a sector that is, in turnover, bigger than the movie industry. Given its strong growth performance over the
last five years, +40% on average, its objective is to be among the
publishers worldwide
top 5 independent game
by 2006. The group’s ambition relies on an internal growth that surpasses the
average market growth as well as on strategic acquisitions.
Created in 1986, Ubi Soft deploys the talents of 1,900 people around the world. Today, the company is
the
world's second largest force in video game creation. Its studios have developed such original
creations as Rayman® and hits based on famous licenses that include Batman™: Vengeance™ and Disney’s Tarzan™
Freeride. Ubi Soft is also the publisher of well-known game titles such as Myst®III: Exile, Battle Realms® and IL2
Sturmovik™. Sales of its products are assured worldwide through an efficient distribution network operating in
21 countries.
Supported by the experience of its studios, the creation and deployment of
international brands,
the
successful integration of new acquisitions and a sound financial footing, the group's long-term growth prospects
remain promising.
RAPPORT ANNUEL 2002
1
CHAIRMAN'S
STATEMENT
Once again, our growth performance has been in line with forecasts. Up
more than 40% in 2001-2002, it marks a success for all Ubi Soft teams.
At € 369 million, group sales increased
42% during the fiscal year. Internal growth
outperformed the market twofold, while
contributions from acquisitions exceeded
forecasts.
This sustained growth combined with effective
cost containment has contributed to improved financial ratios. Operating income is up
292%, at € 31 million, while the net result
stands at € 8 million.
In addition, following successful operations to
raise capital, we benefit from a solid financing
capacity: € 150 million from convertible bonds
and a € 130 million credit line under a
syndicated loan.
■ Ubi Soft’s growth strategy is based on four
strategic pillars:
2
Unrivalled development studios for strong brands
We invested in our first design and development studios in 1994.
Today we are the second largest force in video game creation worldwide.
Development teams are set up in 10 different countries throughout
North America, Europe and Asia. As a result of the combined contribution of
this extraordinary talent base and successful acquisitions, our core product
catalogue now includes six leading brands.
Rayman®, with more than 12 million copies sold since its launch,
remains a major of the genre. It registered another successful year with
the performance of its Game Boy® Advance release.
In the area of strategic action games, the titles Tom Clancy's Rainbow Six®
and Tom Clancy’s Ghost Recon™ have quickly become market references.
Myst®III: Exile, the period's bestseller with over a million copies sold, and
Chessmaster® benefit from their solid PC position as they expand to all gaming
platforms. Settlers® and Prince of Persia® have already respectively sold more
than 3 million and 2 million copies, and the sequels currently under development
are impatiently awaited by fans. To these must be added the strong licenses we
acquire and develop year after year - licenses that continue to enrich our already
comprehensive catalogue. Batman™: Vengeance and IL2 Sturmovik™ were
added last year, for example, and are among several others still to come…
Finally, as highlighted in the US pro forma financial statements, our studios have
achieved further gains in productivity. Starting this year, to facilitate comparison
of our performance with peer-group companies in our sector,
we will provide our financial statement under US Gaap, too.
Targeted, rapidly integrated acquisitions
Our strategy is supported by the acquisition of established brands, industry know-how and advanced technologies.
We have successfully completed the integration of last year's acquisitions: Red Storm, Blue Byte, and the Entertainment division
of The Learning Company. We have been able to integrate and deploy the new brands, and have laid the groundwork for sharing
knowledge and effective collaboration with our studios. The addition of new talent and creativity has enriched our teams. These
companies have thus contributed to the achievement of our goals, and our initial estimates have been well exceeded, representing
sales of € 108 million.
Accelerated international expansion
Since the founding of the company, our choice has been to create a powerful distribution network.
More and more of our international development is effectively assured through a strengthened distribution network.
We are directly present in 21 countries and ensure the distribution of our products in more than 50. In FY 2001/2002,
Ubi Soft opened new distribution subsidiaries in Belgium, Holland, Canada and Switzerland. We added Korea and Finland
in 2002. Sales in North America increased twofold. In Europe, sales also registered strong growth of approximately 21%,
while sales in Asia expanded 55%. This large network ensures that we are always close to our customers and understand
their demands.
Anticipating technological advances
Thanks to our studios and research and development teams as well as to shrewd marketing choices, Ubi Soft has always
been well positioned at the launch of new consoles. This year, we have released major titles for the launch
of the Game Boy® Advance, GameCube™ and Xbox™.
Ubi Soft is now taking the next step with its online gaming initiative : 80% of our PC games offer online multiplayer capabilities.
This means we are already positioned for the next market evolution, and able to offer our customers a richer gaming
experience. During the financial year, we launched ubi.com, the benchmark portal for fans of Ubi Soft games. This portal will
strengthen our relationship with gamers while enabling them to participate in communities of users with like interests.
■ Ubi
Soft's outlook remains particularly promising
Our goal is to pursue the internal development of bestsellers. We ensure that our creativity translates into concrete
success, we place the consumer at the heart of all our activities. We remain attentive to their needs and expectations
throughout the world thanks to our developers and publishing specialists, all devoted to gaming.
Our expertise is now well established and has received many awards and wide market recognition. Tom Clancy's Splinter Cell™,
for example, obtained awards for Best Game(1) 2002, Best Action/Adventure Game and Best Xbox™(2) Game. More generally, the
game has been widely acclaimed by the press.
The outlook for the new fiscal year, which began in April 2002, is particularly promising. Our next blockbusters will be
Tom Clancy's Splinter Cell™, Tom Clancy's Rainbow Six®: Raven Shield™, Rayman®3: Hoodlum Havoc, XIII, Sum of All Fears™
and Tom Clancy's Ghost Recon™. The math is simple: 6 games = 6 million units to be sold.
In the meantime, our studios are already planning and developing AAA products for the years ahead. These include the next
episodes of Myst® and Prince of Persia®, Project BG&E *, Settlers®V, Loose Cannon and others.
We are also pursuing our entry into the online gaming sector. Before the year's end, two massively multiplayer online
(MMO) titles will be released. Shadowbane, one of the most awaited games in its category, will be launched in North
America. In Europe, we will publish the most famous MMO, EverQuest®, in localized versions.
By 2006, we will be among the world's top 5 publishers. By achieving this objective, we will also further improve
our financial ratios. I have no doubt that Ubi Soft has the strength and assets needed to succeed.
Sixteen years after the company's creation, our success continues to be driven by the tremendous motivation and talent of
all our teams. I would like to once again express my gratitude for all their contributions and efforts. I also wish to thank our
commercial and financial partners as well as our shareholders for the confidence they have continued to show in our company.
Together, we will continue to work to move and shake the world of interactive entertainment products and video games,
providing gamers with rich and unique entertainment experiences.
Yves Guillemot,
Chairman and CEO
(1) ECTS, London, August 29-31, 2002.
(2) Selected as Best Action/Adventure Game by journalists at the 2002 E3 Electronic Entertainment Exhibition, and Best Xbox™ Game of 2002 by Gamespot.
* Working title.
3
Ubi Soft has achieved growth in consolidated sales of 40% on average over
the last five financial periods. This sustained and managed growth has
assured the group a solid groundwork and improvements in profitability.
A WINNING
STRATEGY IN FIGURES
A DYNAMIC GROWTH
PERFORMANCE
Operating profit *
In line with forecasts,
(in millions of euros)
for the 2001/2002 financial
year Ubi Soft registered a 42%
increase in sales related
to the prior period, with 18%
attributable to internal growth.
Well exceeding targets,
the contribution from
acquisitions in 2000/2001
was particularly significant,
35
A SIGNIFICANT
IMPROVEMENT IN
31
30
25
PROFITABILITY
Operating income surged
20
(+292%) in response to
15
13.5 13.7
sustained growth in sales
combined with effective
representing €108 million.
containment of operating
Consolidated sales
productivity gains.
As a result, sales per employee
10
8.1
7.9
5
expenses and further
0
97/98 98/99 99/00 00/01 01/02
rose 38%, to € 194,000,
Net income *
following a 26% increase
in the prior period. The effective
management of operating
400
369
by their more modest increase
259.8
250
186.5
200
12
96.4
10.9
in relation to sales
(+34% versus +42%).
9
7.9
6.31
6
4.41
132.6
150
100
13.4
expenses is highlighted
350
300
15
3
50
0
97/98 98/99 99/00 00/01 01/02
0
97/98 98/99 99/00 00/01 01/02
* Before depreciation of goodwill.
4
Annual growth has averaged 40%
over the last five fiscal years
UBI SOFT ADAPTS
ITS ACCOUNTING
TO INTERNATIONAL
REPORTING
KEY FIGURES
French Gap
US Gaap pro forma
In millions of euros
01/02
00/01
01/02
00/01
369.0
259,8
369.0
259.8
STANDARDS
Sales
In conjunction with its
Operating profit (before goodwill)
31.0
7,9
8,7
(19,1)
consolidated financial statements
Operating margin
8.4 %
3%
2.4 %
NS
prepared according to French
Consolidated net income (before goodwill)
13.4
6.0
(1.2)
(12.5)
8.0
3.6
(6.6)
(13.9)
accounting standards, Ubi Soft
Consolidated net income (after goodwill)
also issues pro forma financial
statements on the basis of US
Gaap. This latter presentation will
Earnings per share (before goodwill) *
0.77
0.30
(0.07)
(0.74)
Earnings per share (after goodwill) *
0.46
0.21
(0.38)
(0.82)
facilitate comparison with other
major video game publishers.
* In euros per share.
Under US Gaap, internal research
and development costs are
recorded directly under expenses
instead of being amortized over
several financial periods, as is
allowed under French standards.
A NEW
GENERATION
OF HITS
WINNING
Ubi Soft has anticipated the
THE GAME AROUND
development of new gaming
THE WORLD
platforms with flagship titles
Ubi Soft has strengthened its
adapted to each type of game
positions in key markets
console. In conjunction with
by optimizing the performances
the launching of new Xbox™
of existing structures,
and GameCube™ game consoles,
opening new commercial offices
several Ubi Soft titles were
and through acquisitions.
among the first available.
Sales have increased twofold
At the same time, PC game
in North America, by over 20%
sales have benefited from the
in Europe and 55%
success of Myst®III: Exile and
in the Asia-Pacific region.
Tom Clancy's Ghost Recon™,
A COMPLETE
RANGE OF GAME
PRODUCTS
Designing games in-house
represents a major strategic
focus for Ubi Soft. The
principal titles of the period
have been produced by its own
studios. Sales generated from
in-house production increased
by 6 percentage points
in relation to the prior
fiscal year.
to name a few.
Sales
Sales by platform
Sales by activity
by region
Game Boy 19%
Advance®
France 18%
Rest of the world 1%
Asia-Pacific 5%
region
Distribution 5%
12% - Germany
11%
UK
Game BoyTM
Game Boy ColorTM
7%
42% PC
Publishing 23%
PlayStation® 11%
USA/Canada 37%
72%
Development
(In-house &
co-production)
15 % PlayStation®2
Xbox 1% 3% GameCubeTM
TM
16%
Other
European countries
5
Ubi Soft has been listed on the Euronext Paris
stock exchange since 1996.
Ubi Soft is included in the SBF120 index and has been a component of the
Euronext Next Economy index since January 2002.
Today, four securities are listed on the Premier Marché of Euronext Paris:
UBI SOFT'S
SHARE PERFORMANCE
SECURITY
3.80%
OCEANE
(Euroclear: 5447,
CONVERTIBLE
(Euroclear: 18 812)
Reuters: UBIP.PA,
BOND
Issue price: € 47.50 (at
Bloomberg: UBI FP)
(Euroclear: 18 062)
November 30, 2001)
Shares listed as of March 31,
Issue price: € 164.64
Maturity period: 5 years
2002: 17,368,732
(FF 1,080) per bond
The annual rate of interest
(at July 16, 1998).
was set at 2.5%, payable
(As a consequence
when installments are due
of the 5-for-1 stock split,
on November 30 each year,
one bond allows five shares
plus a 2% premium per
to be subscribed with
year, payable at maturity.
EQUITY
WARRANTS
(Euroclear: 22,552)
Issue price: € 136
(FF 892.10)
Exercise Price: € 170
(FF 1115.13)
Exercise period:
a face value of € 0.31.)
Maturity period: 7 years
Annual yield: 3.80% per
year or € 6.26 per bond,
payable as of July 16
of each year.
November 3, 1999
to November 2, 2002
inclusive.
Shareholder information
www.ubisoft.finance.com
6
S H A R E P E R F O R M A N C E M O N T H L Y A V E R A G E (1)
€
100
€
100
Maximum Price (€)
Average Price (€)
80
80
Minimum Price (€)
60
60
40
40
20
20
0
0
Sept
96
march
97
Sept
97
march
98
Sept
98
march
99
Sept
99
march
00
Sept
00
march
01
Sept
01
march
02
T R A D I N G V O L U M E A N D T R A D E D C A P I T A L M O N T H L Y A V E R A G E (1)
M€
300
400,000
350,000
250
Trading capital (€ million)
300,000
Trading volume (by shares)
200
250,000
200,000
150
150,000
100
100,000
50
50,000
0
sept
96
march
97
sept
97
march
98
sept
98
march
99
sept
99
march
00
sept
00
march
01
sept
01
march
02
(1) These dates factor in the 5-for-1 stock split on January 17, 2000.
BREAKDOWN OF
Guillemot family 16%
SHARE CAPITAL
5% Ubi Soft Entertainment S.A*
2% Gameloft S.A*
On August 1, 2002,
the Guillemot Family held
26% of voting rights.
Public 77%
* Non-voting shares.
7
BRANDS
“Go globe-hopping with the latest gear and drink in some sweet new graphics as this series
sets a new standard.” - PC Gamer
■ Tom
Clancy games are the second best-selling tactical shooting franchise of all times.
■ The
Rainbow Six® line has sold more than 7.5 million copies worldwide.
TOM CLANCY’S
RAINBOW SIX ® :
RAVEN SHIELD
TM
8
TOM CLANCY'S
SPLINTER CELL
TM
“The graphics are amazing and the gameplay is deep and
challenging. This game is turning heads and is going to be a
breakout hit on Xbox™.” – Microsoft
■ Tom
Clancy’s Splinter Cell™ takes the brand into a whole new
genre: Third-Person Stealth Action.
9
The introduction of the new generation of gaming
consoles on all international markets has strengthened the sector's growth.
In 2001, revenue for the video game industry overtook box office sales. The
increasing interest in gaming has strengthened Ubi Soft's growth potential.
The interactive entertainment industry should represent US$22 billion in 2004,
corresponding to annual growth exceeding 22%.
VIDEO GAMES
TAKE ON A WHOLE NEW
DIMENSION
VIDEO GAMES: A WORLD
WITHOUT BOUNDS
Offering comparable core capabilities and each
The gamer's world has changed significantly
with different potential features, they have both
in the last few months. Following the success
won over the public. The first sales were in the
of the handheld Nintendo Game Boy®Advance,
US, with 1.5 million(2) gaming consoles sold at the
launched in June 2001, which sold more
end of 2001 for Microsoft's Xbox™ and 1.3
than 8 million units(1) worldwide in six months,
million(3) units for the Nintendo GameCube™. These
two new consoles were introduced at the end
two new consoles were introduced in Europe in
of the year: GameCube™ and Xbox™.
the first half of 2002. Their penetration will
accelerate at year's end, and the market in 200304 should register growth in excess of 20%.
This new installed base of gaming consoles will be
added to that of the PlayStation®2, marketed
since 2000, which had a considerable lead with
an installed base of 30 (4) million at the end of 2001.
The PC segment in turn offers a solid, stable,
highly profitable revenue base. It represented
a market of US$2.7 billion in 2001(5). Growth in
value terms increased 6% (4 percentage points)
in the US. In Europe, the segment grew
7 percentage points while remaining stable in
value terms. Growth for game software should
range between 4% and 5% per year until 2005(6).
(1) (2) (3) (4) (5) (6) IDG, March 2002.
USA
Stand E3 2002 - Ubi Soft - Los Angeles.
Europe
Japan
10
launch date
price at launch date
current price*
launch date
current price*
launch date
current price*
* September, 2002.
Sony PlayStation®2
October 26, 2000
$ 299
$ 199
November 24, 2000
€ 300
€ 259 (September 2002)
March 4, 2000
¥ 29,800 ($ 222)
$ 230
Microsoft XboxTM
November 15, 2001
$ 299
$ 199
March 14, 2002
€ 479
€ 249 (September 2002)
February 22, 2002
¥ 34,800 ($ 260)
$ 162
Nintendo GameCubeTM
November 18, 2001
$ 199
$ 149 (May 2002
May 3, 2002
€ 199
€ 199
September 14, 2001
¥ 25 000 ($ 185)
$162
ENTERTAINMENT
The value of the worldwide MMO market was
FOR ALL PUBLICS
estimated at US$200 million in the same year(9).
The takeoff of the Xbox™ and GameCube™ was
Between now and 2005, nearly 40% of all
driven by a specific customer segment, that
families will have access to broadband
of hardcore gamers. Representing the first buyers
connections in the US. 70% of current gamers
of new consoles, this segment is made up of
already have a broadbrand connection.
hardcore, very demanding video game enthusiasts
New online features for video games, meanwhile,
aged 18 or older. They benefit from a significant
should attract a whole new generation of
budget devoted specifically to entertainment,
players. Things are already off to a good start!
and purchase on average between 6 and 12 games
per year. The hardcore gamer assures the sale
of the first million machines and the market
success of games.
Price reductions a few months after launch
facilitated the introduction of new game consoles
across markets, making it possible to broaden
penetration from the initial segment of “experts”
to a larger public. Following the past successes of
PlayStation® and Nintendo 64, video games remain
of great interest for the mass market segment.
Indeed, interactive entertainment is a phenomenon
that is reaching out to all market segments.
The penetration of video games in the family
entertainment segment has increased, including
among adult users. There has been a growing
interest within the segment of women users,
for example, as shown by the success of Myst®,
Chessmaster®…
In the United States, the benchmark market for
Europe, video games are the leading option for
home entertainment (for 35% of households), well
(7)
ahead of television, films (19%) and reading (13%).
Among US households that own a console, 36% say
that they purchase on average one game a month.
UBI SOFT, WELL POSITIONED
IN A GROWTH MARKET
Ubi Soft develops games in the most promising
market niches and for the major gaming platforms.
By developing games for several platforms while
rigorously managing the related additional costs,
sales are boosted and all customer segments
can be targeted.
A selection of hit titles for 2001/2002
A NEW GENERATIONS
OF GAMERS
With the development of online gaming
possibilities for consoles and the growing
availability of PC-based multiplayer online
gaming, the world of interactive entertainment
is constantly expanding.
Massively multiplayer online (MMO) games are
playable on a permanent basis-24/7. They start
on installation and exist independently of the
presence of the player. On average, more than
PC : Myst® III : Exile, Tom Clancy’s Ghost ReconTM,
Chessmaster®, Battle RealmsTM, Scrabble®
(excluding USA), IL-2 SturmovikTM, Silent Hunter IITM ,
Pool of RadianceTM;
PS2 : Rayman®MTM, BatmanTM : Vengeance, Disney’s
TarzanTM Freeride, Grandia TM II,
Pro Rally 2002, Worms Blast, Ministry of Sound
and others;
GameCubeTM et XboxTM : BatmanTM : Vengeance,
Disney’s TarzanTM Freeride, Star WarsTM: Rogue
LeaderTM: Rogue SquadronTM II and Disney Donald
Duck - Couak Attack (exclusively for Game Cube);
100,000 people play every day, at all hours of
the day, throughout the world. As broadband
access becomes increasingly available,
the MMO sector should see exponential growth.
MMO game sales for the first time exceeded one
million(8) units in 2001 in the US.
(7) Datamonitor, 2002.
(8)(9) IDG - March 2002.
GameBoy® Advance : Rayman® Advance,
Tom Clancy’s Rogue SpearTM, Planet of ApesTM,
Salt Lake 2002TM, Tom & Jerry : The Magic Ring,
Ice AgeTM, ETTM The Extra Terrestrial, Breath of Fire
and others.
11
A game's quality is meaningful
only if visible to the user. Gamer
expectations are a critical factor in the design of games, the gaming world and
the gaming experience, as well as for the choice of genres and the adaptation
of games to different platforms. The consumer is at the heart of Ubi Soft's
strategy and organization, from the design phase, through layout, to the
game's final form.
From the very start, Ubi Soft opted in favor of integrating game creation and
development capabilities in its in-house studios. Today, in-house production
accounts for 72% of total consolidated sales.
IN-HOUSE STUDIOS
CREATING HITS
IN-HOUSE BRANDS AND
THE STUDIOS: A SIGNIFICANT
COMPETITIVE ADVANTAGE
Ubi Soft produces original trademarks.
Today, the company develops its own strong
international trademarks, created either in-house
or added from acquisitions.
Rayman®, Settlers®, Chessmaster®, Tom Clancy's
Rainbow Six®, Tom Clancy's Ghost Recon™ and
Tom Clancy's Splinter Cell™ are a few examples
included in its extensive portfolio of titles, adapted
to all gaming segments.
From Montreal to Paris, Casablanca to Shanghai,
Raleigh to San Francisco, 1,260 Ubi Soft
specialists at 10 development sites devote their
talent and expertise to the creative
process. They share a common priority:
the design of high-quality games and future
worldwide hits, to provide maximum
entertainment and gaming pleasure.
Original and amazing brand creations such as
Project BG&E* as well as games originating from
superb licenses such as XIII or Batman™:
Vengeance contribute to the growing renown of
Ubi Soft studios.
In addition, 2000/2001 acquisitions have
constituted new genres and expertise.
12
* Working title.
Their rapid integration has considerably increased
the dimension of Ubi Soft’s creative resources,
already enabling the group to offer new AAA
products adapted to the new generation of
gaming consoles this year. The synergies between
Ubi Soft studios and Red Storm, for example,
have benefited the Tom Clancy series - the leading
tactical shooting game for PCs. This year, following
the formidable success on PCs, Ghost Recon™
was launched for consoles.
Tom Clancy’s: Raven Shield™, the third part of
the famous Rainbow Six® series, was developed,
and a new genre in the group brand portfolio –
Third-Person Stealth Action – was created
in Ubi Soft’s Montreal studios with Splinter Cell™.
AN IMPRESSIVE TRACK RECORD
GAMES FOR ALL
The quality and creativity of new Ubi Soft games
PLATFORMS
are consistently recognized each year at the Electronic
In 2002, Ubi Soft had 150 titles in development.
Entertainment Exhibition (E3), the major international event
Ubi Soft’s strategy is now to focus its in-house
of the video game industry held in Los Angeles:
production resources on creating and strengthening
existing brands and titles with high growth potential.
In 2002/2003, 75 games are under development in
its sites, new blockbusters are already in the planning
and development phase for 2004.
In addition, thanks to its expertise, Ubi Soft was
able to successfully position itself early on for new
gaming consoles, to take advantage of this
platform’s expansion and adapt products to market
developments. Ubi Soft studios are currently developing
a number of console games in-house (34 for PS®2,
Tom Clancy’s Splinter Cell™
Selected Best Action/Adventure game by journalists at E3 2002
Selected for best graphics in 2002 for Xbox™ by IGN.com
Selected best Xbox™ game of the year, 2002 by Gamespot
Rayman®3: Hoodlum Havoc
Selected best game of 2002 for GameCube™
and Game Boy® Advance by IGN.com
Tom Clancy's Rainbow Six®: Raven Shield™
Selected as best tactical simulation game by SimHQ
Best E3 2002 game in the First-Person/Tactical Shooters
category by Wargamer
26 for GameCube™, 21 for Xbox™, 20 for GBA and
Lock On: Air Combat Simulation - Best simulation game
48 for PC).
at E3 2002 (Wargamer); Nominated for best simulation game
■ Ubi Soft’s 2002/2003 blockbusters include :
(IGN.com)
Tom Clancy’s Splinter Cell ,
Disney’s Lilo & Stitch™ - Nominated in the category of
Rayman 3 : Hoodlum Havoc,
Best Graphics for Game Boy® Advance (Europe only) (IGN.com)
Tom Clancy’s Rainbow Six®: Raven ShieldTM,
Far Cry™ - Nominated in categories Best Action Game,
XIII,
Technological Excellence and Maximum Surprise (IGN.com)
TM
®
Tom Clancy’s Ghost Recon ,
Larry Bond's: Harpoon® - Best naval combat game (SimHQ)
Sum of All Fears™.
IL-2 SturmovikTM: the Forgotten BattlesTM - voted Best E3
TM
Simulation Game 2002 (Wargamer)
… to name just a few.
World’s second largest creative force
for video games
13
AN INTERNATIONAL
SUCCESS
ATTRACT ALL PLAYERS,
ALL AROUND THE WORLD
Ubi Soft's worldwide presence allows it to
Strategically positioned for success
precisely identify and understand what players
Ubi Soft has established sales subsidiaries in
want as well as to monitor evolving gaming
such key markets as the US, the UK, Germany,
preferences and trends.
France, Japan and China.
The group's sales force is in direct contact with
retailers in 21 countries, and indirectly in more
than 50 countries. Through this distribution
strategy, Ubi Soft overseas its local product
sales and is widely present in retail displays.
As a result, Ubi Soft has gained market share
throughout the world. It ranks 6th in the PC
segment in the US, and holds between 3rd and
5th place in Europe for all platforms combined.
Ubi Soft is also the leading game publisher in
China.
By maintaining close contact with gamers, it is
strategically positioned to adapt each product
and launch to specific markets. Ubi Soft localizes
games in 25 languages, creating multilingual
versions of games, packaging and user manuals.
Sales force in direct contact
with retailers in 21 countries
14
PRESTIGIOUS
LICENSES
Licenses offer an excellent springboard for video
games. Based on subjects benefiting from
considerable public renown, including cult television
series, movies and comics, licenses help to attract
a broader number of players and boost sales.
Ubi Soft capitalizes on the popularity of characters
and invented worlds to develop hits.
All games are custom-designed to identify the most
suitable concept: one that is adapted to the chosen
heroes' spirits and worlds. Its ability to build
brands and sustain them over time is widely
recognized, as is demonstrated by the confidence
of major players:
CBS: Crime Scene Investigation;
Dargaud: XIII;
Dupuis: Largo Winch;
Disney studios: Snow WhiteTM, Peter PanTM Return
to Never Land, Lilo and StitchTM, Treasure Planet,
and others;
Fox Interactive: Ice AgeTM, Planet of the ApesTM,
and more;
Jim Henson: Bear in the Big Blue House, and others;
Mattel: Scrabble® (excluding USA);
Paramount Viacom: The Sum of All FearsTM;
Sony Pictures: Charlie's Angels,
Crouching Tiger and Hidden DragonTM;
Viacom: Sabrina;
Universal: The Mummy.
STRATEGIC MARKETING
AGREEMENTS
The visibility and long-term growth
prospects of Ubi Soft games are further
strengthened by strategic agreements
with multinationals.
PARTNERSHIPS
Consumer Products: BN (France), Burger
TO LAUNCH NEW HITS
King (USA), Dragon Optical (USA), Langer’s
Ubi Soft's international position facilitates the
Juice (USA), Kentucky Fried Chicken (UK),
development of partnerships with major players who
Kraft/Nabisco (USA), Nivea (Germany),
have high visibility in the video game world. The group
Oasis (Cadbury – France), Phoskitos
regularly signs agreements with industry majors.
(Nutrexpa – Spain), Rauch (Italy),
Quick (France), Wendy’s (USA).
Bethesda Softworks: MorrowindTM;
Capcom: Megaman 2, Street Fighter3 (GBA);
Codemasters: Colin McRae Rally and Mike Tyson
on Game Boy® Advance, and others;
Crave Entertainment: Battle Realms™:
Winter of the Wolf, UFC, along with 20 other titles;
Eidos: TombRaiderTM: The Prophecy (GBA);
NewKidCo: Tom & JerryTM, ETTM the Extra-Terrestrial;
Sony Online: EverQuest®: Planes of Power;
Team 17: Worms Blast®.
Media: AOL(UK), Cartoon Network (USA),
Discovery Channel/Animal Planet (USA),
Fox (UK), Mirror (UK), T-Online (Germany).
Publishing: Bayard Publishing (France),
Goldmann Publishing (Germany),
Group Correo publishing (Spain).
Entertainment: Futuroscope (France),
Panini (Europe), Universal Pictures (Europe),
Universal Music (Germany),
Futuroscope (France).
15
BRANDS
Creating Original Brands
“...easily one of the most visually impressive games on the PlayStation® 2.”
- GameSpot
■
Michel Ancel, the father of Rayman®, unveils his latest creation to
critical acclaim.
PROJECT BG&E*
* Working title.
16
RAYMAN ® 3 :
HOODLUM HAVOC
Making Hits
“Rayman® 3 is one of the best looking titles for all nextgeneration systems.”- IGN.com
■
The Rayman franchise has sold more than 11 million copies
worldwide.
17
The development of online games
has modified the way video
games are played. Online gaming provides players with new sensations, opens
up new horizons and offers new challenges. The online multiplayer feature
represents the addition of a totally new element to games, as was the case
with the introduction of color, sound and 3D capabilities. The creation of the
ubi.com portal in 2001 represented a significant move forward in this market
and strengthened relations with players. Today, Ubi Soft is intensifying its
online expansion as it aims to become one of the top 5 worldwide players in
online gaming between now and 2006.
UBI.COM:
PLAYING
FOR THE FUTURE
UBI.COM:
THE GAME HAS BEGUN
Created in 2001, the ubi.com portal welcomes
more than 2 million individual visitors per month,
exceeding the 1-million-member mark
in its very first year. Several thousand gaming
enthusiasts are connected at any given time to
play Ubi Soft games online. Through this portal,
some 15 gaming communities have been created.
The portal is dedicated to Ubi Soft’s main titles
and provides direct contact with the group's
flagship brands.
This reinforced contact provides improved
knowledge of gamers, opportunities for dialogue,
an ability to better identify consumer demands
and new information about Ubi Soft’s games.
Currently, one of every two games developed
in Ubi Soft's in-house studios offers online options.
For PC games, this percentage is even higher
(80% this year, as compared with 50% last year).
Gaming consoles with Internet connections are
also starting to offer online multiplayer capabilities.
Tom Clancy’s Ghost Recon™ will be one of the first
titles available on Microsoft’s XboxTM Live service,
to be launched in November.
Shadowbane
18
FULL STEAM AHEAD
IN THE MMO MARKET
Massively multiplayer online (MMO) gaming
is a separate segment in full expansion, especially
in the US and Asia. Even if MMO gaming is still
a niche market, it is the only online gaming sector
providing additional recurrent revenue through
a subscription system, in general monthly.
With the introduction of Shadowbane in North
America, Ubi Soft has achieved a breakthrough in
the MMO gaming market.
Shadowbane, developed by Wolfpack Studios,
is the leading massively multiplayer online game
that combines the genres of medieval fantasy
role-playing and strategy games. Players can
physically modify the story, environment and
political context of the game.
Meanwhile, localized versions of EverQuest™,
M Y S T O N L I N E *:: A W O R L D
which have been impatiently awaited by fans,
UNLIKE ANY OTHER
will be launched in Europe at the end of 2002 and
Rand Miller, the co-creator of Myst®, has developed
in China at the beginning of 2003. Ubi Soft signed
an online adventure game based on a permanent
publishing, localization and customer-support
gaming world, which allows players to experience
agreements with Sony Online Entertainment
the extraordinary visual environment of Myst® online.
for this well-known game.
Ubi Soft, already the publisher of preceding titles in
As a result, the most popular MMO game in
the series, has acquired the global rights to the brand.
the world, with currently 450,000 subscribers,
The Myst® line has sold more than 11 million copies
will for the first time be simultaneously
worldwide for PCs. Myst® Online will undoubtedly
available in Chinese, French and German.
succeed in delighting hardcore enthusiasts of the
With each new language, of course, comes
Myst saga, and fans of the MMO version will
the opportunity to develop new markets.
appreciate its captivating atmosphere, aesthetic
quality and ease-of-use.
Ubi Soft has also acquired global rights
to publish the future online version of Myst ,
The game offers 3D graphics in extraordinary
which will be launched at the end of 2003.
real-time, rich intrigues and the possibility
®
to chat with other players. Myst® Online will offer
all players the chance to live a rich and intense
experience in the Ages of Myst®.
* Working title.
Become one of the top 5 players
in online entertainment by 2006
19
BRANDS
The Cult Series
“The Settlers® is a great series that has gotten better with every
new release...”- PC Format
■
Over 3.5 million units from the series have been sold in the world.
THE SETTLERS® IV
20
CHESSMASTER ®
9000
Owning a Genre
“The Chessmaster® line is the only way to go if you’re looking for a chess
program.” - GameSpot.com
■
Chessmaster® is the dominant, best-selling brand in the chess category,
selling more than 5 million copies worldwide.
21
The success of Ubi Soft games
is based on the expertise of
1,900 men and women who share a commitment to excellence in their fields.
Together, they devote their talent and enthusiasm to becoming one of the top
5 publishers worldwide by 2006.
TOP TALENTS
IN THE SERVICE
OF A COMMON GOAL
THE PROFILE
Ubi Soft recruits personnel with a high level
OF THE UBI SOFT TEAMS
of expertise in video game creation.
Members of the Ubi Soft team are, first and
In each specific field, new arrivals are drawn
foremost, experts in their different fields.
from the very best schools and backgrounds.
With an average age of 29, the profile of
New employees learn and progress alongside
a Ubi Soft team menber is similar to his or
colleagues with more seniority, while taking an
her customer target.
active part in the development of the company
at their own level. They use and master the
most recent technologies. Internal R&D teams
develop tools that are best adapted to create
and develop excellent games.
As a result of the company's international
presence, it is enriched by the culture
and ingenuity of 22 different nationalities.
This cultural diversity benefits both the
customers and the teams alike.
Committed to fostering the talent and initiative
that assure its success on a daily basis,
Ubi Soft enables all its employees to pursue
professional projects in a stimulating environment.
UBI SOFT'S RESERVOIR OF TALENT
More than 30 different fields of expertise are needed to create a video game.
The creative teams include: 540 women, 1,360 men, 22 nationalities.
Those who contribute to the production process include:
graphic artists,game designers, sound designers, info-designers, IT specialists,
animators, script writers, data managers, testers and others.
Publishing involves:
product managers, purchasing managers, management controllers and more.
22
1,900 men and women striving
to create unparalleled entertainment
BRANDS
License to Thrill
“Ubi Soft’s XIII is one of the most refreshing
First-Person Shooters of this year.” - GameSpot.com
■
XIII takes gamers on a hair-raising journey into a comic book world.
XIII
23
BRANDS
One of the Best-Selling PC Franchises in the World
“Myst® III has the same lush, hypnotic scenery as its best-selling predecessors.”
- Time Magazine
■
The Myst® series has already sold 11 million copies worldwide.
MYST ® III :
EXILE
24
2001/2002
FINANCIAL
REPORT
25
F
INANCIAL REPORT
1. History of the Group
1.1 Key dates and major developments
2. Financial Year 2001/2002
2.1 Highlights of the financial year 2001/2002
2.2 The Group’s organizational structure
2.3 Activity analysis
2.3.1
2.3.2
2.3.3
2.3.4
2.3.5
2.3.6
Annual and quarterly consolidated sales
Activity break-down
Production volumes evolution
Geographical sales break-down
Platform sales break-down
Main subsidiaries sales
2.4 Headcounts
2.5 Comments on earnings for the 2001/2002 financial year
2.6 General information and risks
2.6.1
2.6.2
2.6.3
2.6.4
2.6.5
2.6.6
2.6.7
Protection of trademarks
Investment policy
Research and development policy
Litigation
Risks
Commitments
Insurances
2.7 Recent developments
2.8 Outlook and strategy
2.8.1
2.8.2
2.8.3
Sectoral environment
The growth strategy
Outlook on 2002/2003 fiscal year
3. Accounts on March 31, 2002
3.1 Consolidated accounts on March 31, 2002
3.1.1
3.1.2
3.1.3
3.1.4
Consolidated balance sheet on March 31, 2002
Consolidated income statement on March 31, 2002
Consolidated cash flow statement on March 31, 2002
Explanatory notes on the Consolidated Accounts
3.2 Corporate accounts on March 31, 2002
3.2.1
3.2.2
3.2.3
3.2.4
3.2.5
Balance sheet on March 31, 2002
Income statement on March 31, 2002
Consolidated cash flow statement on March 31, 2002
Explanatory notes on the Corporate Accounts
Financial table (Article 135 of the Decree of March 23, 1967)
4. Report by the statutory auditors
26
28
28
30
30
33
34
34
34
35
35
35
36
36
37
38
38
39
39
39
39
40
40
41
42
42
42
42
43
43
43
44
45
46
68
68
69
70
71
85
86
4.1 Report on consolidated accounts –
financial year ending March 31, 2002
86
4.2 General report on the financial year ending March 31, 2002
87
4.3 Special statutory auditor’s report on regulated agreements
88
4.4 Report on remuneration
90
FINANCIAL REPORT
Contents
5. Proposed resolutions submitted for approval
to the combined ordinary and extraordinary general meeting
on September 12, 2002
91
5.1 Agenda for the ordinary general meeting
5.2 Agenda for the extraordinary general meeting
6. General information
91
92
100
6.1 General information on Ubi Soft Entertainment S.A.
6.1.1
6.1.2
6.1.3
6.1.4
6.1.5
6.1.6
6.1.7
6.1.8
6.1.9
6.1.10
100
Company name and registered office
Legal status
Jurisdiction
Company founding and expiration dates
Objects of the company (Article 3 of the Articles of Association)
Trade and Companies Register
Location of legal documents regarding the company
Accounting period
Statutory distribution of profits (Article 17 of the Articles of Association)
General Meetings (Article 14 of the Articles of Association)
100
100
100
100
100
100
100
101
101
101
6.2 General information on the capital
6.2.1
6.2.2
6.2.3
6.2.4
6.2.5
6.2.6
6.2.7
6.2.8
6.3 Distribution of capital and voting rights as of August 1, 2002
6.4 Changes in capital and voting rights over the past three
financial years
6.5 Securities market
6.6 Dividends
7. Corporate governance
7.1
7.2
7.3
7.4
Management
Board of Directors
Responsabilities held by the directors
Interests of directors
8. Persons responsible for the financial report
and statutory auditors
8.1
8.2
8.3
8.4
8.5
8.6
102
Share capital
Conditions for amending the capital and the respective rights of the various categories
of shares (Articles 7 and 8 of the Articles of Association)
Authorized unissued capital
Securities which do not represent the capital
Identification of major shareholders
Potential capital
Equity issue reserved for employees
Movements in share capital
Person responsible for the financial report
Declaration by the person responsible for the financial report
Declaration by the statutory auditors
Name and address of statutory auditors
Information policy
Schedule of financial communications
for the 2002/2003 financial year
102
102
103
105
105
105
105
108
110
111
113
113
114
114
115
116
119
120
120
120
121
122
122
122
Glossary
123
Table of concordance
124
27
1
HISTORY OF THE GROUP
1.1 Key dates and major developments
KEY DATES:
1986:
Creation of Ubi Soft S.A.
Five brothers, Claude, Michel, Yves, Gérard and Christian
Guillemot, who were interactive entertainment enthusiasts,
set up Ubi Soft, a publisher and distributor of educational
software and video games.
Ubi Soft's beginnings were marked by:
■
the successful sales distribution of games for PC, AMSTRAD,
AMIGA and ATARI.
■
the increasing share represented by the distribution of software from the largest US, British and German publishers, such
as Elite, Microprose, Electronic Arts, Sierra, LucasArts™,
Interplay, Software Toolworks and Novalogic®.
1989 /1990:
Beginning of internationalization
Ubi Soft set up marketing subsidiaries on the main international markets (UK, Germany and USA).
1991:
The launching of console products
Ubi Soft began distributing products for the rapidly-growing
market for Nintendo® and Sega® video game consoles.
1994 /1995:
Establishement of the first developpement
studios the launch of Rayman®
Ubi Soft opened its first in-house production studios in
Montreuil, and set up a large, integrated organization to
create and develop multimedia products. The first integrated
studio abroad was set up in Rumania.
In the fall of 1995, Ubi Soft launched the first game based
on the exploits of the “armless and legless” character Rayman®.
28
1996:
Ubi Soft S.A. becomes Ubi Soft
Entertainment S.A. and is floated
on the Stock Exchange.
In July 1996, Ubi Soft Entertainment S.A. was floated on
the Paris Bourse second securities market (SICOVAM
5447). The initial public offering was subscribed more than
75 times over.
In December, the Guillemot family increased the company's
floating stock from 20% to 36%.
In January 2000, Ubi Soft Entertainment S.A. shares were
transferred to the Paris Bourse Monthly Settlement listed
securities market (“Premier Marché”). There was also a 5-for-1
stock split, which reduced the share face value to FF 2.
Since August 2000, Ubi Soft Entertainment S.A. shares
have been eligible for the French deferred settlement system
(“SRD”) and are part of the SBF 120 index.
1999 /2000:
The Group restructured,
into its current organization
The sale and distribution of products was divided between
two geographic centers, EMEA (Europe, Middle East, Asia)
and the USA.
A corporate structure based in Montreuil, France, was set
up to manage the distribution subsidiaries, the studios and
the product quality.
FINANCIAL REPORT
History of the Group
2000 /2001:
Selective acquisitions
Ubi Soft Entertainment consolidated its international organization and its portfolio of global brands by acquiring:
■
the production studios Sinister Games (United States) and
Grolier Interactive Ltd. (Great Britain);
■
Red Storm Entertainment, a US video game publisher with
hits such as the Tom Clancy's Rainbow Six series, a product
range with total sales of over five million copies;
■
■
Blue Byte Software, a German company that combines
production, publishing and distribution activities for video
games mainly intended for PC. Blue Byte created series
such as: The Settlers Series® and The Battle Isle Series™,
with worldwide sales of 2.7 million units and 650,000 units
respectively up to February 2001;
the Entertainment Division of The Learning Company. This
acquisition gave the Group exclusive publishing rights to more
than 80 titles, including: Prince of Persia®, Pool of Radiance™,
Chessmaster®, and Myst®, the leading PC adventure game,
with sales of over 10 million copies worldwide.
In-house creative resources
■
First in-house production studios set up in 1994 in Montreuil,
then Rumania.
■
New production units in China (Shanghai) in 1996
and 1997, followed by Quebec (Montreal) and Morocco
(Casablanca).
■
New design and production facilities in Barcelona, and Milan
in 1999/2000.
■
Production capacity increased by the acquisitions made
in 2000/2001.
Catalogue enhanced by publishing
and prestigious licensing agreements.
■
1991: The company negotiated its first licensing agreements
with prestigious firms (Electronic Arts, Sierra, LucasArts
etc.) and well-known personalities (Kick Off with Jean-Pierre
Papin, Eric Cantona Football Challenge).
■
1997/1998: Agreement signed with Playmobil® for the
exclusive development of virtual adventures of the firm's
well-known characters.
■
Ubi Soft adopted a product range-based philosophy,
releasing such products as the best-selling F1 Racing
Simulation, the first in a line of Formula 1 racing games.
■
1999/2000: Numerous licenses signed with organizations
such as Disney, Warner Brothers and Sony Pictures.
■
2000/2001: licensing and publishing agreements with
Crave Entertainment, Sony Online Entertainment/Verant,
Sony Pictures, In Utero™, Codemasters and Capcom.
MAJOR DEVELOPMENTS:
Internationalization
In 1989/1990, Ubi Soft opened its first marketing subsidiaries
in Europe (United Kingdom and Germany) and the United
States.
■
Internationalization continued rapidly, with the setting up
of marketing subsidiaries and the opening of distribution
offices in Japan and Spain in 1994, Italy in 1995, Australia
in 1996, Hong Kong and Denmark in 1997/1998, and Brazil
in 1999.
■
Ubi Soft further strengthened its distribution network with
the purchase in Austria of Gamebusters (March 2000) and
in Italy of 3D Planet SpA (July 2000). The group has also
taken over the distribution of software from the Guillemot
Corporation in Germany (May 2000), France (January
2001), Holland (March 2001), Belgium and Canada (April
2001).
29
2
FINANCIAL YEAR 2001/2002
2.1 Highlights of the financial year
2001/2002
April 2001
June 2001
■
Announcement of the new Rayman® M series, a new type
of multiplayer shooting and racing game. It will be available
for PC and PlayStation® 2, Xbox™ and GameCube™.
■
■
Opening of a new distribution subsidiary in Canada. Ubi Soft
acquired the Guillemot Corporation's interactive software
distribution division for Canada. The main business of the
new organization, which will employ about ten staff, will be
the sale, distribution and promotion of products throughout Canada.
Myst®III: Exile topped the sales charts in the United
States according to PC Data and Amazon.com ratings.
According to Australia's Inform Official National Chart, the
game was also at the top of the country's charts in the
week of May 13th.
■
Release of Rayman®Advance in the United States and
Europe simultaneously with the launch of Nintendo's handheld console.
■
Agreement signed with Capcom®, for seven Game
Boy®Advance games.
These games include: Super Street Fighter II Turbo
Revival, Street Fighter Alpha 3 (working title), Mega
Man Battle Network, Breath of Fire and Final Fight One.
Ubi Soft will publish these games in Europe, Australia,
New Zealand and Eastern Europe.
May 2001
■
Agreement signed with Sony Online Entertainment for the
publication of PlanetSide™, the first massively multiplayer
online shooting game. This exclusive agreement covers
Europe, Australia and Japan. It is scheduled for release in
the second quarter of 2002.
■
Agreement signed with Crave Entertainment for the publication of Battle Realms™ for PC.
■
■
■
30
Worldwide agreement signed with Sony Pictures for the
development of Crouching Tiger, Hidden Dragon™, a
game inspired by the well-known movie that won four
Oscars. The game is scheduled for release in spring 2003,
and will be developed for PlayStation®2, PC, GameCubeTM,
Game Boy®Advance and XboxTM.
Licensing agreement signed with Codemaster for three
games for Game Boy®Advance: Colin McRae RallyTM 2.0,
Mike Tyson Boxing and TOCA World Touring Cars.
Ubi Soft won several IGN awards at the E3 (Electronic
Entertainment Expo) in Los Angeles:
• Rayman®Advance, award for the best performance and
graphics on handheld consoles;
• IL 2 SturmovikTM, award for the best PC simulation
game;
• Battle Realms™, award for the best PC strategy game;
• Pool of Radiance™ II, award for the best role-playing
game (RPG).
July 2001
■
Ubi Soft and Ludigames announced the release of 15
games for PDAs (Personal Digital Assistants) for
Christmas 2001.
■
Worldwide publishing agreement signed with Team 17 for
the next Worms brand game for PlayStation®2, PC,
Game Boy®Advance and GameCubeTM.
August 2001
■
Ubi Soft announced Shadowbane, a massively multiplayer
online (MMO) game in North America, developed by Wolfpack
Studios (Texas). The game is scheduled for release in the
first semester of 2002. At the same time, Ubi Soft set
up a new division, ubisoft.com, to manage new games portals and MMO “pay-per-play” games.
■
Exclusive licensing agreement signed with Mattel to develop
and publish its new interactive Scrabble® game.
This five-year agreement covers all existing games platforms
and all territories with the exception of North America.
FINANCIAL REPORT
Financial Year 2001/2002
■
Ubi Soft concluded a medium-term syndicated line of credit for 130 million Euros with a group of leading French and
international banks. This revolving line of credit has a
maturity of three years, which can be extended to five
years, and will build up the Group's resources so that it
can fund its growth and develop its business.
■
Issuing of a bond with the option of conversion into and/or
exchange for new or existing shares (OCEANE bond) to a
value of 150 million Euros, with redemption scheduled for
2006. The annual rate of interest was set at 2.5%, payable
when installments are due on November 30 each year. The
gross redemption yield will be 4.5%.
■
Agreement concluded between Sony Pictures Consumer
Products and Ubi Soft covering the license for Charlie's
Angels. Ubi Soft acquired the exclusive right to develop
and publish “Charlie's Angels” video games worldwide for
Nintendo GameCube™, Game Boy® Advance, Microsoft Xbox™,
PlayStation®2 and PC.
September 2001
■
Worldwide agreement concluded between Ubi Soft
Entertainment, Fox Interactive and Visiware covering the
creation of video games based on the film Planet of the ApesTM
for PC, Game Boy®Advance and GameTM Boy Color.
■
Signing of an agreement covering the marketing of one of
the first role-playing games designed for the GameCubeTM,
Evolution Worlds. Ubi Soft acquired the publishing rights for
this game from Entertainment Software Publishing, Inc. The
game will be published worldwide, with the exception of Japan,
China, Korea and Taiwan, in the first half of 2002.
■
Exclusive publishing agreement concluded with Eidos
Interactive for the marketing of the Game Boy® Advance
version of Salt Lake 2002TM, the official game of the Winter
Olympics, under license from the IOC.
December 2001
■
Ubi Soft signed a distribution agreement with Destination
Software for 11 Game Boy®Advance games. These games
include: Formula One, Tiger Woods, PGA Tour 2002,
Medal of Honor Underground, Johnny Bravo, etc. For the
majority of these titles, the agreement is valid for all
countries that have adopted the PAL standard, with the
exception of the United Kingdom.
■
On the occasion of the European release of Rayman®M™
for PC, Ubi Soft announced that 10.5 million copies of the
Rayman® product range had been sold worldwide since the
first game was launched in 1995.
■
Ubi Soft strengthened its presence in Europe by opening
a new distribution organization in Lausanne, Switzerland.
The new subsidiary will employ seven staff, who will be
responsible for selling, distributing and promoting Ubi Soft
products all over Switzerland.
October 2001
■
International licensing agreement concluded for the development of a video game based on well-known television
series Bear in the Big Blue House, created by The Jim
Henson Company. This series, which is broadcast every day
on Playhouse Disney, has just started its fourth season in
the United States, and has been distributed to several
European countries. Ubi Soft Entertainment will develop the
video game for the PlayStation®, Game Boy®Advance and
GameCubeTM consoles.
January 2002
■
November 2001
■
Ubi Soft Entertainment launched ubi.com, a leading portal
for all game fans. This new game portal will revolutionize
the way gamers use the Internet. Ubi.com will allow them to
participate in online communities and play their favorite
games, all on the same website.
■
Ubi Soft joined up with 20th Century Fox to adapt Ice Age™
for the Game Boy®Advance. This game, which has been
adapted from the animated feature film, is intended for
the international market.
Exclusive European publishing contract concluded with
Bethesda Softworks® Inc. This agreement covers nine
games, including The Elder Scrolls III: Morrowind™ for
PC and Xbox™, and Sea Dogs™, which has won several
awards.
31
■
■
Ubi Soft launched its amazing chess game, Chessmaster®,
for Game Boy®Advance. This game is aimed at both beginners and experts, and will be marketed worldwide in the
first half of 2002.
A new agreement was signed with Disney Interactive.
Ubi Soft will distribute three video games for Game
Boy®Advance in Europe: Disney's Peter Pan™ - Return to
Never Land, Disney's Lilo & Stitch™ and Disney's Treasure
Planet.
■
Ubi Soft signed an exclusive licensing agreement with
Archie Comic Publications Inc., Viacom Consumer Products
and Paramount Television's Licensing Division. Ubi Soft is
to develop and distribute a game based on the television
series Sabrina, the Teenage Witch. This game for Game
Boy®Advance will be available worldwide and will be marketed at the end of 2002.
■
32
Ubi Soft and the International Tennis Federation signed a
licensing agreement for the development and publishing of
games based on the Davis Cup. This license covers the
whole world, and is exclusively for PC and gaming consoles.
■
■
■
Ubi Soft announced the development and publication of the
latest episode of the Tom Clancy's Rainbow Six® series,
Tom Clancy's Rainbow Six®: Raven Shield. The game will be
released for PC and progressively for other platforms. This
will be the third episode in the Rainbow Six product range,
more than 6.7 million copies of which have been sold
worldwide.
■
It was announced that Rayman® 3 Hoodlum Havoc would
be released in the United States and Europe during the
2002/2003 financial year. This game will be available for all
new-generation consoles and for PC.
■
Ubi Soft increased its presence in Europe by opening a
subsidiary in Finland. Ubi Soft is now present in 20 countries worldwide. The opening of this new subsidiary forms
part of a strategy of enhancing the Group's presence
locally so that it can continually improve its response to
the specific characteristics of each market and maintain
close relationships with its customers.
■
Ubi Soft signed an agreement to distribute a PC game
adapted from and inspired by Alfred Hitchcock, the master of suspense. The adventure game Alfred Hitchcock the Final Cut, based on the film-maker's best films, will be
distributed in Canada and the United States.
■
Ubi Soft announced that the game XIII would be available
for PC, GameCubeTM, XboxTM and PlayStation®2 in the first
quarter of 2003.
■
Ubi Soft launched the E.T.TM the Extra-Terrestrial range of
video games. This game will be available for consoles and PC.
■
Ubi Soft announced a worldwide agreement with 20th Century
Fox to develop the game for the Aliens VS Predator license,
to which Ubi Soft has acquired the rights until 2003, for
Game Boy®Advance.
Ubi Soft announced that its game Tom Clancy's Ghost
Recon™ had been named PC game of the year by IGN.com
and the well-known American magazine PC Gamer.
February 2002
■
March 2002
Worldwide licensing agreement signed with Universal
Studios to develop a game derived from the television
series The Mummy. This game will be produced for Game
Boy®Advance.
Ubi Soft signed an exclusive licensing agreement with CBS
Consumer Products® to design games derived from the
television series CSI: Crime Scene InvestigationTM for PC
and consoles. The version for PC will be the first to be
marketed worldwide in the second half of 2003.
FINANCIAL REPORT
2.2 The Group’s organizational structure
The group is organized around :
■
29 production sites around the world : France, Germany,
Canada, United States, China, Marocco…
■
Production is organised into “business units” and act as
service providers for the Group’s design and marketing
teams.
24 marketing subsidiaries located in 21 countries on the
main markets for this sector : the United States, Japan,
Europe (France, Germany, the United Kingdom, etc).
▼
GameLoft. S.A.
France
Ubi Soft Holdings Inc.
(USA)
12,16%
Administration
100,00 %
Ubi Books & Records SARL
(France)
99,00%
Ubi Administration SARL
(France)
99,99%
99,94%
Production
Marketing
Ludimedia S.A.
(France)
99,76%
Ubi Soft France S.A.
(France)
Ludi Factory SARL
(France)
99,80%
Ubi Soft Entertainment Ltd.
(Unted Kingdom) 100,00%
Ubi Game Design SARL
(France)
99,00%
Ubi Soft Entertainment GmbH
(Germany)
Ubi Studios S.A.
(France)
99,60%
Ubi Soft S.A.
(Spain)
100,00%
99,95%
(Italy)
99,99%
Ubi Research & Development SARL
(France)
99,80%
Ubi Soft SpA
Ubi Simulations SARL
(France)
99,80%
Ubi Soft Inc.
(USA)
Ubi Soft KK
(Japon)
100,00%
100,00%
Ubi Soft Entertainment Inc. NY
(USA)
Ubi Pictures SARL
(France)
99,00%
Ubi Soft PTY Ltd.
(Australia)
Ubi Animation SARL
(France)
99,80%
Ubi World S.A.
(France)
99,88%
Ubi Graphics SARL
(France)
99,80%
Ubi Marketing & Communication S.A. (France)
99,94%
Ubi Sound Studio SARL
(France)
99,00%
Ubi Soft Entertainment Nordic A.S
(Danemark)
99,50%
Ubi Soft Divertissements Inc.
(Canada)
100,00%
Ubi Soft Entertainment SprL
(Belgium)
99,33%
100,00%
(China)
99,50%
Ubi Soft Entertainment B.V.
(Netherland)
99,98%
Ubi Soft Entertainment Sweden A.B
(Sweden)
98,00%
Gamebusters GesmbH
(Austria)
100,00%
Ubi Soft Entertainment Ltda
((Brazil)
Ubi EMEA SARL
(France)
99,99%
Ubi Soft Canada Inc.
(Canada)
100,00%
Blue Byte Software Ltd.
Shanghai Ubi Computer Software Co Ltd.* (China)
100,00%
99,99%
Ubi Networks SARL
(France)
99,98%
Ubi Soft Entertainment SARL
((Marocco)
99,78%
Ubi Music Publishing Inc.
(Canada)
100,00%
Ubi Info Design SARL
(France)
99,80%
Ubi World Studios SARL
Ubi Productions France SARL
(France)
(France)
Ubi Computer Software Beijing Co Ltd. (China)
99,97%
99,80%
100,00%
Ubi Studios Srl
(Italy)
97,50%
Ubi Studios S.L
(Spain)
99,95%
Ubi Color SARL
(France)
99,80%
Ubi Soft S.R.L
(Romania)
99,35%
99,00%
Ubi soft Entertainment OY
(Finland)
100,00%
Ubi soft Entertainment Norway AS
(Norvay)
98 ,00%
Ubi Manufacturing SARL
(France)
99,86%
Ubi soft Entertainment S.A.
(Switzerland)
99,80%
UBI Music Inc.
(Canada)
Ubi Studios Ltd.
100,00%
Sinister Games Inc.
(USA)
100,00%
Ubi.com S.A.
(France)
99,98%
Red Storm Entertainment (1)
(USA)
100,00%
Ubi.com Inc.
(USA)
99,50%
Blue Byte Software Inc. (1)
(USA)
100,00%
Internet
(1) These companies are held indirectly by Ubi Soft
* production and distribution
33
The intra-Group relationships are as follows :
■
production companies bill their work according to how far
their projects have advanced,
Services rendered by the production and marketing companies
are billed according to market conditions.
■
marketing companies are billed by Ubi Soft Entertainment
S.A. on the basis of their sales volume.
Ubi Soft Entertainment does not own the premises it occupies
in any country.
2.3 Activity analysis
2.3.1 Annual and quarterly consolidated sales
Sales
in € million
2001/2002
2000/2001
Growth
Fisrt quarter
Second quarter
First half year
Third quarter
Fourth quarter
Second half year
60.3
53.1
113.4
165.1
90.5
255.6
23.0
42.9
65.9
114,4
79.5
193.9
162%
24%
72%
45%
14%
32%
Total
369.0
259.8
42%
Ubi Soft's sales rose by 42% in the 2001/2002 financial year.
On a like-for-like basis (i.e. excluding the acquisition of 3D
Planet (Italy), Sinister Games (United States), and Red Storm
(United States), which have been consolidated since October 1,
2000; Blue Byte (Germany), which has been consolidated
since February 6, 2001; and the Entertainment Division of TLC,
which was consolidated with effect from March 13, 2001),
sales rose by 18%.
This growth in the organization's sales confirms Ubi Soft's
ability to outperform the market (which grew 10% in the
United States and approximately 5% in Europe in 2001).
Publishing covers revenue from titles designed and produced
by third-party developers, for which Ubi Soft finances and
supervises production in exchange for acquiring the license.
Ubi Soft then handles localization and manufacturing, and of
course marketing and sales distribution. The company receives
revenue from product sales and pays royalties to the brand's
developers and/or owners.
Distribution sales correspond to revenue from sales of the
products of publishers with whom Ubi Soft has concluded
distribution agreements, and for whom it handles marketing
and sales. Such agreements may be local, covering a limited
geographic area, or may cover several regions.
2.3.2 Activity break-down
2001/2002
Ubi Soft sales are broken down into the Development, Publishing
and Distribution of video games.
Development covers revenue from titles developed, produced
and marketed by Ubi Soft's in-house studios. Development
also includes sales by third-party developers (Third Parties),
for whom Ubi Soft provides supervision and co-production,
and acts as guarantor of the quality of the final product.
34
2000/2001
Development
72%
66%
Publishing
23%
31%
5%
3%
Distribution
FINANCIAL REPORT
2.3.3 Production volumes evolution
2.3.5 Platform sales break-down
Number of titles produced in-house and in co-production
(third-party):
Number of titles*
*
2001/2002
2000/2001
58
61
title = 1 game on several platforms (i.e. Batman™ Vengeance PS®2,
GameCube™, Xbox™ and GameBoy®Advance, four formats for one title).
The company attaches strategic importance to its in-house
development business, as this ensures:
■
better game quality and rigorous control of timescales and
budgets;
■
improved profitability, thanks to development for several
formats, in particular for triple A titles;
■
the development and creation of tools and technology which
can be reused from one game to another.
PC
Play Station®
Play Station® Play Station 2
Dreamcast/Nintendo 64
GameBoy/GameBoy™Color
GameBoy®Advance
GameCube™
Xbox™
Others
2001/2002
2000/2001
42%
11%
15%
Ns
7%
19%
3%
1%
2%
27%
27%
9%
7%
23%
/
/
/
7%
Sales for the new platforms (Game Boy®Advance, PlayStation®2,
Nintendo GameCube™ and Xbox™) account for 38% of annual
sales (9% in the previous year). Sales for PC, which were
sustained in particular by the success of Myst®III: Exile,
Tom Clancy's Ghost ReconTM, account for 42% of annual sales.
The slightly lower number of development titles confirms
the Group's strategy of concentrating more on games with
considerable potential, such as Myst®III: Exile 1,120,000
units of which have been sold, Rayman®Advance (770,000
units), Batman™: Vengeance (over 670,000 units) and the
Tom Clancy's Ghost Recon™ series (over 760,000 units).
2.3.4 Geographical sales break-down
FY
2001/2002
Sales
France
Germany
UK
Rest of Europe
Total
USA/Canada
Asia/Pacific
Rest of the World
Total
2000/2001
% Sales
Sales
% Sales
67.97
18%
61.13
24%
43.89
41.46
59.01
212.33
136.51
18.03
2.09
368.96
12%
11%
16%
58%
37%
5%
1%
100%
34.89
34.05
45.89
175.95
64.41
11.64
7.81
259.82
13%
13%
18%
68%
27%
4%
3%
100%
Sales in the North America region were €137 million for the
year, and accounted for 37% of Group sales.
The Asia-Pacific region accounted for 5% of annual sales, an
increase of 55%.
The Europe region accounted for 58% of annual sales, at
€ 212 million (+21%), with Germany, Benelux and Scandinavia
achieving the highest growth.
35
2.3.6 Main subsidiaries sales
Subsidiary
in thousands €
Consolidate sales Profits
31.03.2002
31.03.2002
Ubi Soft Inc. (United States)
Consolidate sales Profits Consolidate sales Profits
31.03.2001
31.03.2001
31.03.2000
31.03.2000
135 441
8 721
62,385
(6,994)
41,610
2,981
(Germany)
43 891
1 419
28,655
2,038
15,333
7,47
(United Kingdom)
40 935
(425)
33,077
404
11,568
45
2.4 Heacounts
a) Personnel changes
e) Flexible working hours and legal working week in France:
On March 31, 2002, Ubi Soft had 1,901 employees, with an
average age of 29 years. In one year, personnel numbers
increased by 3.5%, a slight increase caused by the growth
of Ubi Soft's business and the setting up of new distribution
subsidiaries.
In Ubi Soft's French companies, introduction of the 35hour work week low, has taken the form of either shorter
working days or reduced hours by granting days off.
b) Turn over
There is no significant staff turnover.
On 03.31.02 On 03.31.01 On 03.31.00
Production
Sales/Marketing/
Administration
1,259
1,234
1,160
642
602
492
Total
1,901
1,836
1,652
c) Contracts
Ubi Soft mainly employs staff under permanent contracts.
However, situations may arise in which fixed-term and
temporary contracts have to be concluded for specific
assignments.
d) Company spirit
Ubi Soft hires experts in game creation, and its youngest
recruits have received the finest training available. They learn
and progress by working alongside the old-timers. Everybody
plays an active role in the company’s development, to his or
her own ability. All company personnel share values such as
curiosity, broadmindedness, a willingness to exchange ideas,
the ability to take initiative, and friendliness, with special
emphasis placed on the development and sharing of knowledge.
Ubi Soft’s multicultural diversity is proof of this. Thanks to
its overseas subsidiaries and the variety of activities it
conducts, Ubi Soft offers many opportunities for mobility and
career development. The company is open to initiative and
encourages each employee to carry out his or her professional
projects in a stimulating work environment.
Breakdown of Ubi Soft Entertainment staff around the
world as of March 31, 2002:
Country
Germany
Australia
Austria
Belgium
Brazil
Canada
China
Denmark
Spain
United States
France
Great Britain
Netherlands
Hong Kong
Italy
Japan
Morocco
Norway
Romania
Sweden
Switzerlands
Total
36
Personnel
86
14
9
8
3
369
219
16
64
211
603
52
7
2
81
13
73
1
63
3
4
1,901
FINANCIAL REPORT
2.5 Comments on earnings
for the 2001/2002 financial year
Significant Rise in Profitability
Steady Progress in Financial Ratios
During fiscal year 2001/2002, Ubi Soft’s sales, in line with its
forecasts, were up 42% from the previous year. Internal
growth was 18%, twice that of the world video game market.
The contribution of acquisitions in 2000/2001 was higher
than the Group’s target. It represented 108 million Euros. In
the United States, in particular, sales increased 112% and
now represent 37% of Ubi Soft’s business. Sales in Europe
were up 21%, and account for 57% of consolidated sales.
Ubi Soft’s financial ratios continued to improve. Thus, at
March 31, 2002, working capital requirement stood at 40%
of sales, a 5 point drop from the past year. Inventory decreased sharply to 3.8 months from the previous figure of 4.8.
Days of sales outstanding were 105 days, down on 112 days
last year. Finally, at 131.7 million Euros, net indebtedness
represents 42% of shareholders’ equity.
Gross margin has grown 50% in value terms. Expressed as a
percentage of sales, it has risen by 3 points over 2000/2001.
Operating income is up 292%, due to continued gains in productivity and good control of operating expenses. Thus, sales
per employee grew 38% to reach 194,000 Euros, after an
increase of 26% between 1999/2000 and 2000/2001. Control
of operating expenses is confirmed by their slower increase
(+34%) vs. sales growth (+42%).
Pro Forma Presentation
The reduction in financial income is attributable mainly to
greater indebtedness, following acquisitions made in 2000/2001,
and to provisions for depreciation of minority interests (2 million
Euros). The exceptional income is essentially due to a gain of
3.8 million Euros arising from litigation with the American
company Take 2, and to a 1.8 million Euro provision for bad
debts written to account for the bankruptcy of the American
distributor K Mart.
Main differences between standards:
Before amortization of goodwill and business assets, net income comes to 13.4 million Euros or +168% over fiscal year
2000/2001.
■
Along with its consolidated accounts pursuant to French
accounting standards, Ubi Soft will present US Gaap pro
forma accounts, in which internal development costs have
been immediately expensed, as some American video-game
publishers do.
■
French standards or “French Gaap”:
• Immobilization, then amortization of in-house research
and development expenses;
• Since April 2001, the new Conseil National de la Comptabilité (CNC) [French National Accountancy Council]
standard governing the amortization of goodwill and
business assets has been applied.
US Gaap pro forma standard
• In-house research and development costs entered in the
accounts as charges.
In accordance with the new accounting French standard set
up by the French national accounting board (Bulletin 123,
September 2001), Ubi Soft is now adding the amortization
of business assets (2.1 million Euros) to that of goodwill
(3.3 million Euros on a full year basis). The result is an
increase of this item to 5.4 million Euros, up from 1.4 million
Euro last year.
37
According to this pro forma presentation, the major impacts on the accounts are as follows:
In millions of €
2001/2002
2000/2001
8.7
(1.2)
(6.6)
(19.1)
(12.5)
(13.9)
(0.07)
(0.38)
(0.74)
(0.82)
Operating income (excluding amortization of goodwill and business assets)
Net income (excluding amortization of goodwill and business assets)
Net income (after amortization of goodwill and business assets)
In € per share
Net income per share (excluding amortization of goodwill and business assets)
Net income per share (after amortization of goodwill and business assets)
Unaudited pro forma presentation
Impact of US GAAP pro forma presentation on operating income over the last five financial years:
In millions of €
2001/2002
Published operating income
2000/2001
1999/2000
1998/1999
1997/1998
31
7.9
13.7
13.4
8.1
- Capitalized R&D expenses
(77)
(60.7)
(45.6)
(33.7)
(25.9)
+ Depreciation of intangible fixed assets
54.7
33.7
37.8
21.5
10.8
8.7
(19.1)
5.9
1.2
(7.0)
US GAAP pro forma operating income
Unaudited pro forma presentation
2.6 General information and risks
2.6.1 Protection of trademarks
Ubi Soft Entertainment S.A. has not filed any patents and
does not depend on any particular patent.
Ubi Soft Entertainment games are covered by intellectual
property rights both in Europe and internationally (for France:
Institut National de la Propriété Industrielle [French Patent
Office], Paris; for Europe: Office for Harmonization in the
Internal Market; internationally: the World Intellectual Property
Organization; and finally, for the North American market, the
Patent and Trademark Office in Washington D.C.).
Like all publishers of entertainment games, Ubi Soft
Entertainment S.A. has to face the problem of piracy. It is
a member of SELL (the French trade association of entertainment software publishers), and takes legal action in any
known cases of software counterfeiting in France and
abroad [by taking independent action where applicable, or
by any other means available under criminal or civil law]. At
the same time, in the case of Internet piracy the company
systematically takes action against hackers to force them
to withdraw games that are online illegally.
In addition, games designed by Ubi Soft Entertainment S.A.
are covered by international copyright laws.
38
FINANCIAL REPORT
2.6.2 Investment policy
Our research efforts focus on innovation and functionality,
while our technologies are geared towards generating a top-
Since its early days as distributor, Ubi Soft has transformed
quality product. Development efforts concentrate on the creative
itself into an integrated company capable of carrying out each
aspect of games, and aim to please gamers.
stage in the production of a game, from design to distribution.
The research and development costs are the costs of creating
Today, its strategy centers on the production of triple-A
tools, and are therefore immobilized and amortized over
quality video games and “time to market” games.
three years. No basic research is carried out.
The 2001/2002 financial year was marked by the consolidation
The company has not applied for ISO certification (ISO 9000-
of external growth activities, the most important of which
9001).
were: Red Storm Entertainment (September 2000) and the
Entertainment Division of The Learning Company (March
2001) in the United States, and Blue Byte Software in
2.6.4 Litigation
Germany (February 2001).
So far as the company is aware, there are no particular
Investment in internal production:
events or disputes that are likely to have or have recently
The figures are expressed in millions €
had any significant impact on the business, earnings, financial
situation, or assets of Ubi Soft Entertainment and its sub-
2001/2002
2000/2001
1999/2000
77
69
55
Estimated investment in production for the 2002/2003 financial year :
between € 73 and € 78 million
sidiaries.
2.6.5 Risks
Dependence on sub-contractors, suppliers and customers
Investment in sales distribution:
The company has no significant dependence on sub-contractors,
Control over distribution ensures that Ubi Soft retains local
suppliers or customers that could affect its development
control of its products in a highly competitive environment.
plan.
Ubi Soft Entertainment has two types of distribution network:
In 2001/2002, Ubi Soft incorporated distribution networks in
Finland by setting up Ubi Soft Entertainment OY, and in
■
the centralized Anglo-American model (USA, United Kingdom,
Japan): the chain’s buyer makes centralized purchases of
Switzerland by setting up a subsidiary in Lausanne.
the products, which the chain then distributes to its own
stores;
2.6.3 Research and development policy
■
the decentralized European model (Germany, France,
Switzerland, Benelux, Italy, Spain): the chain makes cen-
In its constant efforts to develop excellent video games, Ubi
tralized purchases of the items, but uses a distributor to
Soft has developed a policy of researching and developing
deliver them to each of its stores
tools for each project, incorporating the latest technological
developments. The selection of tools takes place at a very
Ubi Soft’s ten largest customers account for 33.5% of the
early stage in a project, because the decisions made then
Group’s pre-tax sales.
directly affect the investment required in terms of time,
Dependence on manufacturers : Ubi Soft, like all publishers
human resources and the overall funding of the game.
of games for consoles, buys games cartridges and miscellaneous accessories from console manufacturers. These sup-
Thanks to the integration of its team of engineers, who
plies are thus dependent on the manufacturer. There is no
have a solid grasp of the best technology currently available,
special dependency with regard to PC games.
Ubi Soft now has a highly pragmatic approach to its projects:
Depending on the problems involved in a game and the
Risks relating to the departure of key personnel
expected results, the tools selected will either be tools
The company is now structured in order to minimize departure
developed in-house specifically for the purpose, or commercial
risks or long unavailability of our personnel or key managers.
software, or a mixture of both.
A conversion program and the share of expertise is, by example in development in our company, for the retention and the
39
transmission of knowledge in the company. Moreover, human
resources policy, common to all the group, is positioned on its
ability to attract, train, retain and motivate staff with high
technical and managerial skill.
Risks relating to liquidity problems and exchange rate
volatility
Euronext market (Paris Bourse) has experienced, last
months, considerable fluctuations in prices and volume,
which have had a considerable impact on the share prices of
a large number of companies. Sometimes these fluctuations
were in no way linked to the operating performance of the
companies concerned. The attention of investors is drawn to
the fact that such major market fluctuations may adversely
affect Ubi Soft's share price.
Risks relating to future acquisitions and integration
of the companies acquired
Ubi Soft may proceed to an external growth transaction in
the medium and long term. The wholesome balance-sheet
structure of the company and the recent raising of funds (a
€ 150 million bond convertible and a € 130 million mediumterm syndicated line of credit) may minimize risks linked to
these transactions. However, these risks may be: dilution
of the company's current stock ownership, creation of longterm debt, possible losses, creation of provisions relating
to either the need to report goodwill or to other intangible
assets, or have a negative impact on the company's profitability.
Furthermore, any acquisition or merger involves a number of
risks, in particular the possible departure of key staff in the
company target. This loss may have a considerable negative
impact on its sales, earnings or/and financial situation:
neverthless, Ubi Soft has always demonstrated its ability to
integrate acquisitions.
40
2.6.6 Commitments
The Group’s management has made no firm commitments on
future investments.
2.6.7 Insurances
The company does not carry business interruption coverage.
Furthermore, the group benefits from no special insurance
coverage.
FINANCIAL REPORT
2.7 Recent developments
April 2002
■
■
Worldwide licensing agreement signed with Viacom
Consumer Products to publish games derived from the film
The Sum of All FearsTM, adapted from the well-known novel
by Tom Clancy.
May 2002
■
When the Nintendo Gamecube™ console was released in
Europe, Ubi Soft was present with four titles: Star Wars™
Rogue Leader™: Rogue Squadron™ II, Batman™: Vengeance,
Disney's Donald Quack Attack and Disney's TarzanTM Freeride.
■
Announcement of an exclusive agreement with Rage
Software covering the publication of games based on the
well-known Rocky film series. The game will be available
for all new-generation consoles, and will be launched in
North America this fall.
■
Exclusive licensing agreement signed with MGA Entertainment
to adapt the Bratz dolls for PC and consoles.
■
Exclusive agreement signed with Eidos Ltd. for the game
Lara Croft Tomb RaiderTM - The Prophecy, which will be
released for Game Boy®Advance at Christmas.
■
Exclusive worldwide contract signed with Cyan Worlds Inc.
to publish and manage Myst® On Line (working title), which
is to be launched in the second half of 2003.
■
Major publishing and technical support contract signed
with Sony On Line Entertainment for the game EverQuest®.
This agreement will allow localized versions of this game,
one of the most popular massively multiplayer online
games in the world, to be launched in Europe.
July 2002
■
Jacques Villeneuve, Ubi Soft and Weg Management gave
a preview of their new video game, Jacques Villeneuve
Racing Vision.
■
Opening of a new branch in Seoul, Korea in June 2002. The
Group's aim here is to establish a presence in a rapidly
expanding market. Ubi Soft is now present in 21 countries.
■
Ubi Soft and Shanghai Animation Film Studio are to develop a PC game based on the well-known animated television
series Music Up. The game will be released in China in the
Summer of 2002.
■
The Settlers®V, a new episode is currently being developed at Blue Byte, Ubi Soft's German studio.
Final stage in development of the new edition of Chessmaster®
9000, the internationally renowned chess game for PC.
Worldwide release is scheduled for fall.
August 2002
■
Announcement of first-quarter sales: 32 million Euros. In
the first quarter of the 2002-2003 financial year (April June), Ubi Soft's consolidated sales came to 32 million
Euros, down 46.8% compared to the same period in the
previous financial year. This significant change is the result
of an important base effect: sales in the first quarter of
2001/2002 were up 162% as a result of the launch of two
major titles, Rayman® Advance and Myst®III: Exile, which
represented 53% of sales for that period; 24 titles were
marketed, compared to 32 the previous year.
September 2002
■
Conclusion of a distribution agreement with Microsoft,
covering such major Microsoft titles as Age of Empires®
Gold Edition, Microsoft® Flight Simulator 98, Microsoft®
Combat Flight Simulator 1 and Microsoft® Pandora’s Box.
All of these games will be available in stores this fall. The
agreement covers Europe (with the exception of the
United Kingdom), Canada, Latin America, Australia and
the Asia-Pacific region (with the exception of Korea and
Japan).
■
As the creator of one of the most eagerly awaited games
of 2002, Ubi Soft is set to take the lead in the Action/
Infiltration genre, one of the biggest segments of the
video game market. Tom Clancy’s Splinter Cell™, just
released from the Ubi Soft Montreal development studios,
wins yet another award with its selection as Best Game at
ECTS 2002 – the leading European video game trade show.
June 2002
■
Ubi Soft won several awards in various categories at the E3
(Electronic Entertainment Expo) in Los Angeles:
• Tom Clancy's Splinter CellTM, awards for Best Action/
Adventure Game, Best Game for XboxTM and Best Graphics
• Tom Clancy's Rainbow Six®: Raven shield™, Best Tactical
Simulation
• Rayman® 3: Hoodlum Havoc - Nominated for the category Best Platform Game for GameCube™ and Game
Boy®Advance
• IL-2 SturmovikTM: the Forgotten BattlesTM - voted
Best E3 Simulation Game 2002 by Wargamer
41
2.8 Outlook and strategy
2.8.1 Sector and competitive
environment
■
With the launch of 128-bit gaming consoles, the market
entered a new cycle of growth. The three new consoles
dominated the market in a very short time. Since their
launch in Europe and North America, the PS®2 has sold over
12 million units, GameCubeTM 1,3 million and XboxTM 1.5 million*.
While the events of September 11, 2001 led to increased
uncertainty in the stock markets, particularly in the technology sector, the world market for video games is expected to grow by 20% to 25% in 2002.
Furthermore, the development of online gaming will be an
attractive growth factor. The arrival of internet connections in consoles, which will become operational in the
second semester of 2002, will also speed up growth in
the field of online games.
■
The video game sector has experienced significant concentration over the last ten years. Competition between game
manufacturers is global.
Following several mergers and acquisitions, the number of
leading video game publishers** with more than 10 years
of experience is limited: Activision, Electronic Arts,
Infogrames Sega, THQ, and Ubi Soft. In contrast, a number
of major companies have disappeared or been absorbed.
These include such publishers as Broderbund, Sierra,
Cendant, GT Interactive, TLC, Time-Warner Interactive,
and BMG Interactive. Several small-size production studios have also been bought up (such as Mindscape, Crystal
Dynamics, Westwood, and Wizzards).
Despite this, the market remains highly fragmented. In the
United States, the top 8 publishers control only 63% of
the market. The sector should, however, experience further
concentration over the coming years.
* Source : International Development Group, March 2002.
** Manufactures excluded.
*** Working titles.
42
2.8.2 The growth strategy
Ubi Soft's aim is to be one of the top five publishers in the
world (excluding manufacturers), with a target of $1.5 billion
in sales in 2005/2006. The Group's growth strategy is
based on building up a portfolio of strong in-house brands,
such as Rayman®, Rainbow Six™, The Settlers™, Myst® and
Prince of Persia™, on the utilization of well-known licenses,
and on a policy of targeted acquisitions.
2.8.3 Outlook on 2002/2003 fiscal year
Ubi Soft's studios around the world are currently developing
and planning 75 titles for all platforms.
Leading titles for the year include:
■
Tom Clancy's Splinter Cell™
■
Rayman® 3: Hoodlum Havoc
■
Tom Clancy's Rainbow Six®: Raven Shield™
■
Tom Clancy's Ghost Recon™
■
XIII
■
The Sum of All Fears™
In the 2002/2003 financial year, seasonal variations between
the first and second quarters will be more pronounced than
usual. In contrast with the 2001/2002 financial year, major
titles will be released in the second semester. The Group's
business, excluding external growth, and at a constant
exchange rate (up to June 2002), should grow by 17% to
22%, generating sales of 430-450 million Euros over the
financial year.
Ubi Soft is already well-positioned for the 2003/2004 financial
year: several major titles*** are scheduled or in preparation,
such as:
■
Project BG&E
■
Prince of Persia®
■
Tom Clancy's Ghost Recon™ 2
■
Crouching Tiger, Hidden Dragon™
■
Settlers® V
■
Myst®On Line
■
Far Cry™…
RAPPORT FINANCIER
Consolidated accounts
3
ACCOUNTS ON MARCH 31, 2002
3.1 Consolidated accounts on March 31, 2002
3.1.1 Consolidated balance sheet on March 31, 2002
ASSETS
In K€
Notes
03.31.02
Gross
03.31.02
Amort/
Depr
03.31.02
Net
03.31.01
Net
03.31.01
Net
Pro forma
03.31.00
Net
I
II
III
IV
119,094
276,325
34,284
23,459
7,124
113,022
20,931
2,963
111,970
163,303
13,353
20,496
110,342
125,551
12,465
11,415
55,089
188,903
12,465
11,415
606
68,820
9,990
7,077
Goodwill
Intangible assets
Tangible fixed assets
Financial assets
Fixed assets
Inventory and work-in-progress
Advances and installments paid
Trade receivables
Other receivables, prepayments
and deferred income*
Investment securities
Cash
Current assets
Total Assets
Liabilities
453,162
144,040
309,122
259,773
267,872
86,493
V
VI
VII
VIII
49,714
55,097
109,092
70,176
1,069
/
2,614
/
48,645
55,097
106,478
70,176
46,674
37,626
79,991
52,323
46,674
37,626
79,991
52,409
13,449
28,097
87,524
36,551
IX
X
40,365
30,548
/
/
40,365
30,548
51,195
34,986
51,195
34,986
103,754
43,238
354,992
808,154
3,683
147,723
351,309
660,431
302,795
562,568
302,881
570,753
312,613
399,106
03.31.02
03.31.01
03.31.01
03.31.00
In K€
Pro forma
Notes
Capital (1)
Premiums (1)
Consolidated reserves and earnings (2)
Other (3)
Share capital (Group share)
Minority interests
Provisions for risks and charges
Borrowings (4)
Current accounts of the partners
Advances and installments received
Trade creditors and other accounts payable
Sundry creditors and accrued expenses
Total debts and accounts payable
Total Liabilities
(1)
(2)
(3)
(4)
of the consolidated parent company
including net income for financial year
including investment grants
payable at less than one year:
payable at more than one year:
XI
XII
XIII
XIV
5,384
266,406
36,959
306
309,055
/
481
228,897
1,187
3,637
62,295
54,879
350,895
5,156
259,343
28,562
173
293,234
203
190
173,432
1,187
4,367
55,483
34,472
268,941
5,156
259,343
36,740
173
301,412
211
189
173,432
1,187
4,367
55,483
34,472
268,941
5,055
251,573
26,075
49
282,752
0
615
52,514
8,381
1,456
32,926
20,462
115,739
660,431
562,568
570,753
399,106
7,953
306
38,015
190,882
3,619
173
131,928
41,504
(3,327)
173
131,928
41,504
10,946
49
10,689
41,825
* including advances to related companies not consolidated by full or proportional integration at March 31, 2002: K € 114.
43
3.1.2 Consolidated income statement on March 31, 2002
In K €
03.31.02
03.31.01
Notes
Sales
Other operating income
Cost of sales
Wages and social security costs
Other operating expenses
Tax and duty
Depreciation and provisions
Earnings before interest and tax
Financial charges and income *
Pre-tax profit of consolidated companies
Exceptional income/expense
Corporate tax
Net profit of consolidated companies
Share of earnings of equity affiliates
Amortization of goodwill
Total net profit of consolidated company
Minority interests
I
II
III
IV
V
VI
VII
VIII
Net profit (Group share)
03.31.01
03.31.00
Pro forma
368,961
93,346
(151,941)
(93,012)
(116,200)
(3,477)
(66,715)
30,962
(10,560)
20,402
2,177
(9,16)
13,363
/
(5,410)
7,953
/
259,815
72,169
(115,528)
(72,950)
(91,425)
(3,181)
(40,968)
7,932
(3,140)
4,792
(64)
302
5,030
0
(1,379)
3,651
32
283,646
86,916
(122,831)
(81,119)
(117,508)
(3,325)
(43,806)
1,973
(3,489)
(1,516)
(91)
1,013
(594)
/
(2,698)
(3,292)
36
186,527
53,167
(66,907)
(50,859)
(69,398)
(2,213)
(36,598)
13,719
431
14,150
(573)
(2,592)
10,985
0
(39)
10,946
0
7,953
3,619
(3,328)
10,946
Earnings per share
0.46
0.21
0.66
Fully diluted earnings per share (calculated using OEC opinion 27)
0.48
0.22
0.65
* including financial income for related companies not consolidated by full or proportional integration at March 31, 2002:
K € 0.96.
N.B.: Pro forma accounts
The pro forma accounts for the 2000/2001 financial year
included earnings from subsidiaries acquired during the
financial year in the period from April 2000 to March 31,
2001, and were prepared in accordance with the Group's
accounting principles.
This applies to Red Storm Entertainment, Ubi Soft Edutainment
S.A., Ludimedia S.A, Ludi Factory SARL, 3D Planet SpA, Blue
Byte Software Inc., Blue Byte Software Ltd., and Blue Byte
Software GmbH&Co. KG.
44
As no third-party companies were acquired, during financial
year 2001/2002, no pro forma accounts have been prepared.
FINANCIAL REPORT
3.1.3 Consolidated cash flow statement on March 31, 2002
In K €
03.31.02
03.31.01
Flows arising from operating activities
Net income
7,953
3,619
62,241
39,003
Net amortization of goodwill write backs
5,401
1,379
Changes in provisions
3,168
(208)
Change in deferred taxation
6,347
(5,032)
Depreciation of tangible and intangible fixed assets
Grants
(49)
/
Flows arising from the disposal of fixed assets
325
129
85,386
(38,890)
(20,101)
(14,513)
1,685
(18,416)
4,517
(9,996)
(105,522)
(134,975)
(7,457)
(6,826)
(448)
(5,058)
(11,611)
(310)
Total cash flow arising from operating activities
Increase in operating fund requirements
Decrease in non-operational requirements
Total flows
Flows arising from investments
Acquisitions of intangible assets
Acquisitions of tangible assets
Acquisition of equity holding
Acquisition of other financial fixed assets
Charges to be spread over several years
Disposal of fixed assets
Proceeds from long-term loans and other financial assets
Change in consolidation structure (1)
Total des flux liés aux investissements
(4,400)
/
236
834
621
623
/
(64,752)
(128,581)
(210,464)
Flows arising from financial transactions
New long-and medium-term loans
166,550
39,288
Repayments of loans
(56 671)
(19,823)
Increase in capital
141
101
Increase in issue premium
2,087
464
Increase in conversion premium
3,771
6,840
2
7
Increase in share issue premium
Increase in issue premium on shares with warrants
Grants received
Reimbursement of shareholders’ current accounts
Other flows
Total flows arising from financial transactions
Impact of translation differential
Net cash flow
1,242
/
182
124
/
(7,196)
(601)
116,703
430
20,235
168
(95)
55,60
(161,430)
(17,637)
143,793
Net cash position at the end of the financial year
37,623
(17,637)
(1) including cash position of acquired companies
/
5,363
Net cash position at the beginning of the financial year
45
3.1.4 Explanatory notes
on the Consolidated Accounts
Highlights of the financial year
In the course of the financial year, Ubi Soft Entertainment
S.A. absorbed its Ubi Ventures subsidiary, of which it owned
100%, and transferred TLC's business assets to its subsidiary Red Storm Entertainment Inc.
It also acquired 40% of the company 3D Planet, and sold
its shares in Blue Byte GmbH to its subsidiary Ubi Soft
Entertainment GmbH.
Switzerland and Canada now handle distribution of their
products.
In light of the position adopted by the Compagnie Nationale
des Commissaires aux Comptes (CNCC) [French Institute of
Auditors] regarding the amortization of business assets
acquired since regulation no. 99-02 came into force, the
Group decided to amortize them over 20 years using
the straight-line method, with effect from the 2001/2002
financial year.
The impact on consolidated earnings is € 2,021,000.
3.1.4.1 Accounting principles
The consolidated accounts were drawn up in accordance
with Accounting Standards Committee Regulation 99-02 for
the financial year commencing April 1, 2000. The implementation of this new regulation had no significant impact on
the Group’s earnings compared with previous years.
The figures in the notes and tables which follow are shown
in thousands of Euros.
The preferred methods recommended by Accounting Standards Committee Regulation 99-02 were applied with the
exception of the evaluation of pension commitments and
similar services, due to their non significant caracter.
Differences in exchange rates relating to a significant monetary element are essentially an integral part of the net
investment of a subsidiary, they are entered as translation
differentials.
a) Consolidation methods
Full consolidation
Companies are fully consolidated when exclusively controlled
as the result of Ubi Soft Entertainment S.A., directly or indirectly holding 50% of their voting rights or at least 40%
if no other shareholder holds a larger percentage.
46
Equity affiliates
Companies on which Ubi Soft Entertainment S.A. exerts
considerable influence because it holds, directly or indirectly,
20 to 50% of the voting rights, are accounted for using the
equity method.
As of March 31, 2001, all the companies in the Group are
exclusively controlled by Ubi Soft Entertainment S.A., and are
therefore fully consolidated.
Intra-Group transactions are eliminated for all the companies in the Group according to the applicable consolidation
rules.
All significant transactions between consolidated companies, and all unrealized internal profits included in the fixed
assets and the stocks of consolidated companies have been
eliminated.
b) Goodwill, business assets, trademarks
In accordance with the regulations on consolidated accounts,
goodwill is the difference between the acquisition price and
the assessment of the total assets and liabilities identified
on the acquisition date. Goodwill is entered:
■
where appropriate, to the various balance sheet items of
the companies acquired,
■
as “goodwill” on the asset side of the balance sheet in the
case of the sum remaining.
The latter is amortized over a period of no more than 20
years using the straight-line method.
Goodwill is reviewed for each set of Annual Accounts in the
light of changes in the sales of the subsidiary and its contribution to the net income of the consolidated entity as a
whole. Such goodwill may therefore be subject to exceptional
amortization or write-down where appropriate.
As a precaution, negative goodwill is spread over the same
period as positive goodwill (20 years).
The business assets acquired include all the intangible elements
(customers, know-how) needed for the company to do business
and grow. The intangible elements are obtained from the
average of productivity, sales and a sector-based multiple.
In the event that business assets are valued at less than
their book value, a provision for depreciation will be applied.
According to CNCC bulletin no. 123 of September 2001,
business assets must be amortized according to the same
procedure as for goodwill. They are therefore amortized over
20 years using the straight-line method.
FINANCIAL REPORT
Any brands acquired are entered at their acquisition cost. In
the case of brands which are created, the cost of registering
them is immobilized.
Brands are reviewed for each set of Annual Accounts in the
light of changes in the potential sales they generate, and may
be subject to exceptional amortization or write-down.
c) Intangible assets
Intangible assets include the business assets, trademarks,
and office and commercial software.
Distribution trademarks are not amortized.
Office software is amortized using the straight-line method
over a twelve-month period.
Software production costs are determined in accordance
with the guidelines issued by the Conseil National de la
Comptabilité [French National Accountancy Council] in April
1987. These costs are entered in the accounts under
“intangible assets” (account no. 232) as software development in progress. From the date of their first commercial
release they are transferred to “Released softwares” or
“External developments” (account no. 208).
Parent software programs are amortized with effect from
their commercial release date on the basis of the expected
market life of the product concerned, as assessed at the
account closing date.
The amortization period is between 12 and a maximum of 36
months. Net sales of the various products until the end of
their market life are estimated at K€ 742,652 (they came
to K€ 643,526 on March 31, 2001).
This sum allows the corresponding parent software programs
to be amortized. The system of amortization used is the
straight-line method. However, if sales are less than estimated, a supplementary amortization will be carried out.
Software tools, which are a set of complex development programs that may be used for a number of products, are amortized over a maximum of 36 months using the straight-line
method.
d) Tangible fixed assets
e) Financial fixed assets
The gross value of equity holdings corresponds to the cost
of acquisition or the payment in cash for the shares of nonconsolidated companies.
The value of an equity holding is reviewed at the end of each
financial year on the basis of the net position of the subsidiary concerned on that date and its prospects for growth
over the medium term. A provision for depreciation is made
if necessary.
f) Fixed assets acquired through leasing arrangements
Significant capital assets which are financed by leasing
agreements are restated in the Consolidated Accounts as if
the Company had acquired the assets directly using loan
finance.
g) Inventory and work-in-progress
The inventories of all Group companies are valued, after
eliminating internal margins, on the basis of the cost prices
determined in normal trading.
Inventory is valued using the moving-average method. The
gross value of goods and supplies includes the purchase
price and related expenses. Financial costs are excluded
from inventory valuation in all cases.
A provision for depreciation is made where the probable
net realizable value is less than the book
h. Advances and installments received
Licenses cover distribution and reproduction rights acquired
from other publishers. The signing of licensing contracts
entails the payment of guaranteed amounts, recorded in
account no. 409.
At year end, the amonts remaning to be amortized are compared with sales projections. In case the sales are not sufficient a supplementary amortization will be undertaken.
i) Trade receivables
Fixed assets are shown in the Balance Sheet at their acquisition cost.
Depreciation, which is calculated using rates standardized
throughout the Group, is determined on the basis of the
methods and periods of use set out below:
Trade receivables are entered at their face value. Where
applicable, a provision for depreciation may be entered
according to the degree of certainty as to ultimate collection existing at the account closing date.
■
j) Investment securities
■
■
■
Equipment:
Fixtures and fittings:
Computer equipment:
Office furniture:
5 years (straight-line).
5 and 10 years (straight-line);
3 years (diminishing balance);
Investment securities consist of equity shares, investment
securities and short-term investments, which are booked at
their purchase price or, whenever it is lower, their market price.
47
k) Cash
Cash consists of cash and bank accounts.
l) Deferred taxation
Deferred taxes are entered in the income statement and
the balance sheet to reflect the difference between financial
years when certain expenditures and revenues are entered
into the consolidated accounts and the financial years when
they are used to calculate taxable revenue.
Deferred taxes are entered in the income statement and
the balance sheet to reflect deficits carried forward in the
year when it seems likely they will be recovered.
This being the case, the monetary items in its balance sheet
are converted at the closing rate, while the non-monetary
items are converted at the historical rate. The income statement is converted at the average annual rate.
n) Provisions for risks and charges
Provisions for risks and charges are made when risks and
charges which relate to a clearly determined object, but which
are not certain to arise, are made more likely by events
which have occurred or are in progress.
As of March 31, 2002, provisions for risks and charges
covered:
■
In accordance with the liability method of tax allocation, the
effect of any changes in tax rates on deferred taxes recorded earlier is entered into the income statement for the
financial year in which the changes in rates become known.
risks relating to a tax inspection,
risks relating to the closure of certain subsidiaries with
low levels of activity.
o) Fully diluted earnings per share
m) Conversion of items expressed in foreign currencies
This figure is obtained by dividing:
Conversion into Euros of transactions of French
companies carried out in foreign currencies
Charges and revenue for foreign currency transactions are
entered at their equivalent value on the transaction date.
Assets and liabilities are usually converted at the closing
rate, with any exchange variations resulting from this
conversion being recorded in the income statement.
■
net earnings before dilution, plus the amount after tax of
any savings in financial costs resulting from the conversion
of the diluting instruments
■
by the average weighted number of ordinary shares in circulation plus the number of shares which will be created
following the conversion of convertible instruments into
shares and the exercising of rights.
Conversion of the financial statements of foreign
subsidiaries into Euros
A distinction must be made according to whether the
foreign subsidiary is autonomous or non-autonomous:
A subsidiary is said to be autonomous:
■
if it is economically and financially autonomous with respect
to the consolidating company or the other consolidated
companies,
■
and if the monetary items in its balance sheet and most
of its income statement relate to a currency other than
the Euro.
In such cases the closing rate method is used. This involves
converting the assets and liabilities of foreign subsidiaries
at the exchange rate in force at the closure of the financial
year, while the income statement is converted at the average
annual rate. Share capital is kept at the historical rate.
A subsidiary is considered to be non-autonomous if it constitutes an extension of the overseas activities of the consolidating subsidiary. This means that most of its commercial
or financial activities are conducted with the consolidating
company. In this case, the historical rate method is used.
48
■
FINANCIAL REPORT
3.1.4.2 Consolidation structure
a) Companies included in the Group consolidated accounts of Ubi Soft Entertainment dated 31 March 2002
country
COMPANIES
Consolidated
companies
Controlling
percentage
Method
Activity
Founded
Ubi Soft Entertainment S.A.
France
Yes
United Kingdom
Yes
100%
Full consolidation
Marketing
1989
Ubi Soft Inc.
Parent company Full consolidation
1986
USA
Yes
100%
Full consolidation
Marketing
1991
Germany
Yes
100%
Full consolidation
Marketing
1991
Ubi Soft SRL
Romania
No
100%
Not consolidated
France
Yes
100%
Full consolidation
Ubi Studios S.A.
Engineering and marketing 1993
Engineering
1994
Ubi Soft S.A.
Spain
Yes
100%
Full consolidation
Marketing
1994
Ubi Soft KK
Japan
Yes
100%
Full consolidation
Marketing
1994
Ubi Pictures SARL
France
Yes
100%
Full consolidation
Graphics and
computer graphics
1995
Italy
Yes
100%
Full consolidation
Marketing
1995
France
Yes
100%
Full consolidation
Development,
1995
interactivity and ergonomics
France
Yes
100%
Full consolidation
Voice, music, sound effects 1995
Ubi Books and Records SARL
France
Yes
100%
Full consolidation
Management
and administration
1995
Ubi Research and Development SARL France
Yes
100%
Full consolidation
Engineering
1996
Ubi Animation SARL
France
Yes
100%
Full consolidation
Animation
and special effects studio
1996
France
Yes
100%
Full consolidation
Engineering
1996
Australia
Yes
100%
Full consolidation
Marketing
1996
France
Yes
100%
Full consolidation
Graphics and modeling
1996
Ubi Soft SpA
Ubi Soft PTY Ltd.
Ubi Graphics SARL
Shanghai Ubi Computer Software Ltd.
China
Yes
100%
Full consolidation
Ubi Soft Marketing
& communication S.A.
France
Yes
100%
Full consolidation
Ubi Soft Divertissements Inc.
Canada
Yes
100%
Ubi Networks SARL
France
Yes
100%
France
Yes
Morocco
Yes
Ubi World S.A.
Ubi Soft Entertainment SARL
Ubi Voices Inc.
Marketing and Engineering 1996
Marketing
1997
Full consolidation
Engineering
1997
Full consolidation
Internet services
1998
100%
Full consolidation
Global marketing
1998
100%
Full consolidation
Engineering
1998
USA
Yes
100%
Full consolidation
Copyright management
1998
Denmark
Yes
100%
Full consolidation
Marketing
1998
France
Yes
100%
Full consolidation
Interactive
script development
1998
Ubi Music Publishing Inc.
Canada
Yes
100%
Full consolidation
Creation of music
1998
Ubi Soft Entertainment Nordic AS
Ubi Soft Entertainment BV
Ubi Soft Entertainment Sprl
Ubi Studios SL
Ubi Studios SrL
Ubi Soft Entertainment Inc.
Hong Kong
Yes
100%
Full consolidation
Marketing
1998
Netherlands
Yes
100%
Full consolidation
Marketing
1998
Belgium
Yes
100%
Full consolidation
Marketing
1998
Spain
Yes
100%
Full consolidation
Engineering
1998
Italy
Yes
100%
Full consolidation
Engineering
1998
France
Yes
100%
Full consolidation
Publishing and marketing
1998
USA
Yes
100%
Full consolidation
Engineering
1998
49
country
COMPANIES
Consolidated
companies
Controlling
percentage
Method
Founded
Ubi Soft Entertainment Ltda
Brazil
Yes
100%
Full consolidation
Marketing
1999
France
Yes
100%
Full consolidation
Engineering
1999
France
Yes
100%
Full consolidation
Studio management
1999
Ubi Computer Software
Beijing Company Ltd.
China
Yes
100%
Full consolidation
Engineering
1999
Ubi Soft Publishing OEM Inc.
Canada
Yes
100%
Full consolidation
Software distribution
1999
Japan
Yes
100%
Full consolidation
Engineering
1999
Ubi Soft Entertainment Sweden AB
Sweden
Yes
100%
Full consolidation
Marketing
1999
Ubi Color SARL
France
Yes
100%
Full consolidation
Graphic design
1999
Ubi Marketing Research SARL
France
Yes
100%
Full consolidation
Market research
1999
Ubi Digital Movies Inc.
Canada
No
100%
Not consolidated
Creation of digital images
1999
Ubi Studios KK
Ubi Music Inc.
Canada
Yes
100%
Full consolidation
Creation of music
1999
United Kingdom
Yes
100%
Full consolidation
Engineering
2000
GameBusters GmbH
Austria
Yes
100%
Full consolidation
Marketing
2000
Ubi Soft Edutainment S.A.
France
Yes
100%
Full consolidation
Creation
2000
Ubi Studios Ltd.
Ludimedia S.A.
France
Yes
100%
Full consolidation
Design and scenarios
2000
Ludi Factory SARL
France
Yes
100%
Full consolidation
Graphics
and localization studio
2000
Sinister Games Inc.
USA
Yes
100%
Full consolidation
Creation and animation
2000
France
Yes
100%
Full consolidation
Marketing
2000
USA
Yes
100%
Full consolidation
Management
and administration
2000
Red Storm Entertainment
USA
Yes
100%
Full consolidation
2000
France
Yes
100%
Full consolidation
Management
and administration
2000
Canada
Yes
100%
Full consolidated
Marketing
2000
Ubi Emea SARL
Blue Byte Software Inc.
USA
Yes
100%
Full consolidation
2001
United Kingdom
Yes
100%
Full consolidation
Marketing
2001
Ubi SOFT Entertainment Norway AS
Norway
Yes
100%
Full consolidation
Marketing
2001
Ubi COM S.A.
France
Yes
100%
Full consolidation
Internet
2001
France
Yes
100%
Full consolidation
Manufacturing follow-up
2001
USA
Yes
100%
Full consolidation
Internet
2002
UBI.COM Inc.
Ubi Soft Entertainment Finland OY
Switzerland
No
100%
Not consolidated
Marketing
20002
Finland
No
100%
Not consolidated
Marketing
2002
The financial year of all consolidated companies ends on March 31st.
In the case of companies in which a majority of shares are held, the materiality thresholds are set at:
■ € 76,000 of the "total balance sheet" in the case of production companies;
■ € 305,000 of sales in the case of distribution companies.
50
Activity
FINANCIAL REPORT
b) Change in consolidation structure
■
New companies added to the consolidation structure on March 31, 2002:
UBI SOFT CANADA Inc.
UBI.COM S.A.
UBI SOFT ENTERTAINMENT NORWAY AS
UBI.COM Inc.
UBI MANUFACTURING SARL
■
consolidation structure date : april 2001
acquisition date: june 2001
acquisition date: july 2001
acquisition date: august 2001
acquisition date: september 2001
Mergers realised during the fiscal year 2001/2002 :
UBI SOFT SPA (Italy) take over 3D Planet SPA on April 1st, 2001
UBI SOFT ENTERTAINMENT S.A. take over UBI VENTURES S.A. on April 1st, 2001
UBI SOFT ENTERTAINMENT GmbH take over BLUE BYTE SOFTWARE GmbH & Co.KG on October 1st, 2001
3.1.4.3 Notes on the balance sheet
I. GOODWILL, BUSINESS ASSETS, TRADEMARKS
a) Goodwill
Goodwill breaks down as follows as of March 31, 2002:
Acquisition
date
On 03.31.01
Gross
Increase
Decrease
UBI Studios S.A.
02.02.96
16
/
/
/
UBI Pictures S.A.
02.02.96
77
/
/
/
77
Ubi Soft Inc.
02.02.96
302
/
/
/
302
12.31.94
236
/
/
/
236
08.01.95
153
/
/
/
153
09.28.00
/
Sinister Games Inc.
03.31.00
4,855
1,618
3D Planet SPA
09.30.00
2,357
1,522
02.06.01
1,082
Blue Byte Software GmbH CO.KG
02.06.01
Acquired company
Acquisition On 03.31.02
costs
Gross
16
95
95
/
(30)
6,443
/
(27)
3,852
/
/
1,082
7,229
/
(74)
7,155
02.06.01
13,174
/
/
13,174 Red
Storm Entertainment
28.09.00
34,768
/
(116)
34,652
10.02.00
/
266
64,249
3,406
Total
/
/
266
(152)
67,503
Goodwill is reviewed for each set of Annual Accounts in the light of changes in the net sales of a subsidiary and its contribution
to the net income of the consolidated entity as a whole. Such goodwill may therefore be subject to exceptional amortization
or write-down, where applicable.
51
On 03.31.01
Acquired company
On 03.31.02
Depreciation
Appropriation
Adjustment difference
Depreciation
4
20
1
4
/
/
5
24
79
71
43
/
243
59
9
60
110
872
/
15
12
7
5
322
193
54
358
658
1,740
20
/
/
/
3
/
/
/
/
/
(3)
/
94
83
50
8
565
252
63
418
768
2,609
20
1,570
3,389
/
4,959
UBI Studios S.A.
UBI Pictures S.A.
Ubi Soft Inc.
Sinister Games Inc.
3D Planet SPA
Blue Byte Software GmbH CO.KG
Red Storm Entertainment
Total
Goodwill is amortized over 20 years.
b) Business assets
Business assets breaks down as follows as of March 31, 2002
On 03.31.01
Gross
On 03.31.02
Increase
Decrease
Adjustment difference
Gross
France
11,342
/
/
/
11,342
USA
26,301
8
/
(10,000)
16,309
Germany
6,810
/
/
/
6,810
Belgium
1,556
/
/
/
1,556
Netherlands
1,144
/
/
/
1,144
509
/
/
/
509
/
1,524
/
/
1,524
/
47,662
2,028
3,560
/
/
/
(10,000)
2,028
41,222
Austria
Switzerland
Canada
Total
On 03.31.01
On 03.31.02
Depreciation
Increase
Decrease
Gross
France
/
594
/
594
USA
/
788
/
788
Germany
/
340
/
340
Belgium
/
78
/
78
Netherlands
/
57
/
57
Austria
/
25
/
25
Switzerland
/
38
/
38
Canada
/
/
101
2,021
/
/
101
2,021
Total
In the course of the 2001/2002 financial year, Ubi Soft strengthened its distribution network by taking over the distribution of
software from the Guillemot Corporation in Switzerland and Canada.
Business assets are amortized over 20 years using the straight-line method.
52
FINANCIAL REPORT
c) Trademarks
Trademarks breaks down as follows:
On 03.31.01
On 03.31.02
Gross
Tradedmarks
Increase
104
104
Total
Decrease
Gross
3
3
10.369
10.369
10,268*
10,268
* including €10,004,000 for reclassification of accounts to the accounts and mergers
On 03.31.01
On 03.31.02
Depreciation
Trademarks
Increase
/
/
Total
Decrease
Gross
/
/
144
144
144*
144
* reclassification of accounts to the accounts and mergers
II. INTANGIBLE FIXED ASSETS
Intangible assets breaks down as follows as of March 31,2002:
On 03.31.01
Intangible fixed assets
On 03.31.02
Gross
Increase
Decrease
Change in
consolidation
structure
Gross
111,766
(1) 63,939*
17,456
158,249
111,766
5,098
(2) 15,758
6,263
14,594
5,098
Software in progress
65,493
80,440*
65,493
80,440
65,493
Software tools
19,153
(3) 3,181
7,537
14,797
19,153
Other licenses
894
519
3
1,409
894
3,337
(4) 1,333
252
4,418
3,337
Released parent software programs
External developments
Office software
Miscellaneous
107
/
107
/
107
Other
312
(5) 2,134
28
2,418
Total
206,160
167,304
97,139
276,325
312
206,160
(1) including € 58,943,000 for account to account reclassification
(4) including € 40,000 for mergers and account to account reclassification
(5) including € 28,000 for account to account reclassification
This gives a net increase in mergers and account to account reclassification of € 98,292,000.
* Software that has been released or is in production also include M€ 9 in external developments.
■
released software programs: software developed in-house and marketed
■
external developments: software developed in collaboration with third parties and marketed
■
software programs in progress: in-house and external developments not yet released on the market.
The increase represents software which was in progress as of March 31, 2002.
■
software tools: these consist of a set of complex development programs that are used for a number of products.
53
On 03.31.01
Depreciation
On 03.31.02
Cumulative
Increase
Decrease
Cumulative
63,824
50,178
17,317
96,685
2,313
1,945
690
3,568
Software tools
11,561
4,741
7,537
8,765
Other licenses
858
172
/
1,030
Released software programs
1,962
975
200
2,737
Other
Office software
195
72
30
Total
80,713
(1) 58,083
25,774
237
113,022
(1) including K€ 96 for reclassification of accounts to the accounts
All software currently being marketed is amortized over a maximum of 3 years as of March 31, 2002.
III. TANGIBLE FIXED ASSETS
Tangible fixed assets break down as follows:
On 03.31.01
Plant & machinery
Computer equipment and furniture
Transport equipment
Leased computer hardware
Fixed assets in progress
Total
On 03.31.02
Gross
Increase
Decrease
Change in
consolidation
structure
Gross
4,873
(1) 2,158
1,122
(12)
5,897
20,807
(2) 5,120
3,606
(23)
22,298
131
(3) 67
57
(1)
140
5,342
1,792
1,204
/
5,930
/
31,153
57
9,194
38
6,027
/
(36)
19
34,284
(1) including K€ 749 for reclassification of accounts to the accounts and mergers
(2) including K€ 974 for reclassification of accounts to the accounts and mergers
(3) including K€ 14 for mergers
On 03.31.01
Depreciation
Plant & machinery
Transport equipment
Leased computer hardware
Total
Gross
On 03.31.02
Increase
Change in
consolidation
structure
Gross
1,913
909
808
/
2,014
12,173
5,199
2,795
20
14,596
70
57
43
/
84
4,532
852
1,148
/
4,237
18,688
(1) 7,017
4,794
20
20,931
(1) including K€ 1,262 for reclassification of accounts to the accounts and mergers
54
Decrease
FINANCIAL REPORT
IV. FINANCIAL ASSETS
On 03.31.01
Gross
Increase
Decrease
Change differential
Gross
10,799
448
23
/
11,224
4
/
/
/
4
/
10,991
/
/
10,991
1,239
12,042
620
12,059
598
621
(21)
(21)
1,240
23,459
Non-consolidated companies
Other fixed investments
Loans
Deposits and guarantees
Total
On 03.31.02
Au 31.03.01
Provisions
Cumulative
Loans
On 03.31.02
Increase
Decrease
Ubi Ventures
Cumulative
/
453
/
/
453
Equity investments
627
2,031
205
57
2,510
Total
627
2 484
205
57
2,963
Percentage holdings in non-consolidated companies:
Company
Value of share
acquisition (K€)
Percentage of
holdings
799
99.35%
Ubi Soft SRL (Rumania)
Ubi Digital Movies Inc.
GameLoft S.A.
Yaccom
1
100%
4,947
8.31%
646
12%
Ludopia Interactive S.A.
1,257
18.45%
S.A. Teamchman
3,049
20%
Cybersearch
GameLoft.com Ltda (Brazil)
Students-life.com
Ubi Soft Entertainment S.A. (Switzerland)
Ubi Soft Entertainment Finland OY
Total
149
Ns
1
1%
343
17.88%
24
99.80%
8
100%
11,224
Companies on which the Group does not exert any significant influence are not included in the consolidation structure.
The companies concerned are Gameloft S.A., Yaccom, Ludopia, Chman, Cybersearch, Gameloft.com Ltda and Students-Life.com.
Other companies were excluded from the consolidation structure for the following reasons:
■
their timescales for drawing up accounts were incompatible with the deadlines for submitting the consolidated accounts to
the Statutory Auditors (Ubi Soft SRL),
■
they were in the process of being wound up (Ubi Digital Movies Inc.),
■
they were in the process of being created (Ubi Soft Entertainment S.A., Ubi Soft Entertainment Finland OY).
55
General information on the main non-consolidated companies (in Euros)
Listed companies
Gameloft S.A.
Cyberseach
Book value on 03.31.02
4,946,836
65,520
Number of shares
5,225,323
24,000
Value of securities per share on 03.28.02
0.9285
2.04
Depreciation over the financial year
95,124
16,560
Accounts dated
Share
capital
Ubi Rumania
03.31.02
436,046
197,427
(128,491) (write-backs)
S.A. Teamchman
10.31.01 2,388,125
(357,125)
1,928,690 (appropriations)
Unlisted companies
Earnings for
the financial year
Depreciation over
the financial year
With effect from April 1, 2002, Ubi Soft Entertainment
to the Guillemot Brothers holding company on the basis of
has sold its minority holdings in Financière Yaccom, Ludopia
their original purchase price, in exchange for shares in
Interactive and Students-Life.com. These holdings were sold
Gameloft.com S.A.
V. INVENTORY AND WORK-IN-PROGRESS
Inventory and work-in-progress break down as follows:
Goods
Total
On 03.31.02
On 03.31.01
Gross
Provision
Net
Net
49,714
49,714
1,069
1,069
48,645
48,645
46,674
46,674
The slight increase in inventory on March 31, 2002 is linked to
The low level of provisions for inventory is due to the fall in prices
greater control of rotation timescales and to the staggering of
for old-generation consoles, which is not likely to make our
product launches over the whole year.
games obsolete, and to a reduction in the Nintendo 64 and
Inventory is depreciated according to the age of the platform.
Dreamcast games in our inventory.
Old-generation console products are provisioned in the amount
of 50% for the Nintendo 64 and for Dreamcast.
VI. ADVANCES AND INSTALLMENTS PAID
These are essentially guaranteed advances paid on licensing
These advances are taken to earnings in proportion to sales
contracts totaling K€ 53,431.
made of the licensed products.
VII. TRADE RECEIVABLES
Trade and other receivables break down as follows:
On 03.31.02
Trade receivables
Total
56
On 03.31.01
Gross
Provisions
Net
Net
109,092
109,092
2,614
2,614
106,478
106,478
79,991
79,991
FINANCIAL REPORT
VIII. OTHER RECEIVABLES, PREPAYMENTS AND DEFERRED INCOME
Other receivables, prepayments and deferred income break down as follows:
Deferred tax on assets (ARD)
03.31.02
03.31.01
14,185
8,159
Deferred tax on assets, consolidation adjustments (1)
1,129
1,990
Current account advances
3,918
15,403
VAT
Other tax and social security liabilities
7,659
5,399
14,141
16,043
Credits receivable from suppliers
1,732
514
Suppliers – debit balances
4,376
1,447
Other
136
298
Prepaid expenses
3,424
2,400
Charges to be spread over several financial years
4,173
470
Translation differentials
Redemption premium (2)
Total
9
15
(*) 15,294
(**) 185
70,176
52,323
All receivables have a maturity of less than one year.
(1) Leasing
88
Margin on inventory
1,041
(2) (*) The original amount of the redemption premium of the convertible exchangeable bonds (OCEANES) taken to assets is
K€ 16,380. This premium is amortized over the term of the loan, i.e. K€ 1.086 as of March 31, 2002.
(**) As a consequence of the conversion of 40,075 bonds and the accelerated redemption of 636 bonds during
the financial year, the redemption premium was amortized to a value of €185,000 over the 2001/2002
financial year.
IX. INVESTMENT SECURITIES
Investment securities break down as follows:
Nature
Gross value
Net value
Equity shares
18,539
18,539
Investment funds
21,826
21,826
TOTAL
40,365
40,365
Number
Av. price
€
Gross value
K€
Provision
K€
Net value
K€
Percentage
of capital
568,141
32,63
18,539
/
18,539
3.27%
Nature
Equity shares
X. CASH
The “Cash” account showed a balance of cash and bank accounts in the amount of K€ 30,548 on March 31, 2002, compared
with on K€ 34,986 31, March 2001.
57
XI. SHARE CAPITAL.
Capital
On March 31, 2002, Ubi Soft Entertainment S.A.'s capital consisted of 17,368,732 shares with a face value of € 0.31 each, i.e.
€ 5,384,307.
Maximum number of shares that may be created: 5,646,664
■
by bond conversion: 3,905,470
■
by exercise of stock options: 827,594
■
by exercise of warrants: 913,600
Change in share capital
Other
Nature
Situation at March 31, 2000
Change in capital of the consolidating
company
Consolidated income
(Group share)
Change in translation differentials
Grants received
Capital
5,055
101
Consolidated
Premiums
reserves
252,138
7,205
Conversion of capital into Euros
Total share
capital
49
282,751
7,306
3,619
3,619
(579)
124
124
173
293,234
13
5,156
259,343
87
24,943
3,619
141
13
3,619
(87)
Allocation of Consolidated Earnings N-1
Change in capital of the consolidating
company
25,509
Grants
received
(579)
Other movements
Situation on March 31, 2001
Income
/
(3,619)
/
7,063
7,204
Consolidated income
(Group share)
7,953
Change in translation differentials
531
Grants received
Situation on March 31, 2002
5,384
266,406
Number of Ubi Soft Entertainment shares
On 04.01.2001
Exercised options
Bond conversion
Share subscription warrants exercised
Stock ownership plan
On 03.31.02
58
7,953
531
16,909,122
207,068
205,470
65
47,007
17,368,732
29,006
7,953
133
133
306
309,055
FINANCIAL REPORT
Share subscription warrants
■
November 3, 1999 share warrants
November 3, 1999 share warrants
Initial number of warrants
372,058, 2 warrants needed to subscribe a share of face value € 1.52
As a consequence of the 5-for-1 stock split, two bonds allow five shares to be subscribed with a face value of € 0.31
Issue price:
€ 136 (FF 892.10).
Strike period:
from November 3, 1999 to November 2, 2002
Strike price:
€ 170 (FF 1,115.13).
26 warrants suscribed during the fiscal year.
As of March 31, 2002, 340,516 warrants had still not been exercised.
■
March 12, 2001 share warrants
Number and face value:
53,266, 1 warrant needed to subscribe a share of face value € 0.31 (FF 2)
Issue price:
€ 0.01 (FF 0.07)
Strike period:
from December 28, 2001 to March 11, 2006
Strike price:
€ 40.288 (FF 264.27).
As of March 31, 2002, no warrants had been exercised.
■
March 19, 2001 share warrants
9,044, 1 warrant needed to subscribe a share of face value € 0.31 (FF 2)
Issue price:
€ 0.01 (FF 0.07)
Strike period:
from March 19, 2002 to March 18, 2006
Strike price:
€ 32.072 (FF 210.38).
Stock options
The capital increases and issue premiums during the past financial year were partly driven by the exercising of stock options.
For the record, the exercise conditions of the stock option plans are as follows:
Initial number of shares:
Face value
Subscription price:
Date of validity
Options not exercised as of March 31, 2002
2nd Plan
3rd Plan
4th Plan
5 th Plan
6th Plan
250,000
250,000
40,471
400,000
44,605
€ 0.31
€ 0.31
€ 0.31
€ 0.31
€ 0.31
€ 12.10
€ 20.40
€ 38
€ 34.51
€ 34.51
04.22.97
10.23.98
12.08.00
04.09.01
04.25.01
On 04.22.02
On 10.23.03
On12.08.05
On 04.09.06
On 04.24.06
97,793
244,725
40,471
400,000
44,605
New equity issue reserved for employees
The extraordinary portion of the Combined Ordinary and
Extraordinary General Meeting of September 13, 2000, authorized
the Board of Directors to carry out a new UBI SOFT ENTERTAINMENT equity issue reserved for employees of the company
and its French subsidiaries, to a maximum of 2.5% of the total
At its meeting on April 10, 2001, the Board of Directors used
the authorization granted by the Combined Ordinary and
Extraordinary General Meeting of September 13, 2000, setting
the subscription price of the shares to be issued at 26.72
euros each, and specified that these shares would be subscribed
by the Ubi Actions Company Investment Fund
shares comprising the company's share capital at the time the
The employees subscribed 47,007 shares via the Ubi Actions
authorization was used, in particular by means of a Company
FCPE. The Board of Directors took note of this equity issue on
Investment Fund.
July 13, 2001.
59
XII. PROVISIONS FOR RISKS AND CHARGES
Provisions for risks and charges break down as follows:
On 03.31.01
Increase
Appropriation
Write-downs
15
/
71
15
71
/
/
244
/
244
175
190
/
/
/
315
9
24
166
481
Provisions for currency losses
Provisions for taxes
Negative goodwill
Total
The negative goodwill was connected with the acquisition of
Ubi Studios Ltd. on February 1, 2000.
As a precaution, it was decided to spread this difference
over the same duration as the amortization of positive
goodwill, i.e. 20 years.
On 03.31.02
break covered:
■ risks relating to a tax inspection,
■ risks relating to the closure of certain subsidiaries with
XIII. FINANCIAL DEBTS
Financial debts break down as follows:
Bond debentures
Borrowings from credit institutions
Accrued interest
Advances in foreign currencies
SPOT line of credit
Medium-term syndicated line of credit
Bank overdrafts
Borrowings resulting from restatement of leases
Advances by the State
03.31.01
190,882
29,275
152
37,109
2,118
1,104
18,799
7,529
/
25,307
/
37,498
14,492
34,310
2,416
1,262
38
Borrowings
228,897
38
173,432
Maturities outstanding on 03/31/02
< 1 year
38,015
> 1 year and < 5 years
190,882
The Group's fixed rate and floating debts amounted to
K€ 214,405 and K€ 14,492 respectively.
The leasing agreements primarily cover IT hardware, and are
for a period of no more than 3 years.
Bank overdrafts are used to finance temporary cash requirements generated by changes in working capital requirements.
At closure of the 2001/2002 financial year, net borrowings
were K€ 157,946.
60
03.31.02
> 5 years
/
03.31.02
03.31.01
Financial debts State advances
228,859
173,394
Cash
(30,548)
(34,986)
In vestment securities
(40,365)
(51,195)
157,946
87,213
Net Financial debts
FINANCIAL REPORT
The breakdown of financial debts by currency is as follows:
03.31.02
03.31.01
/
107,001
French francs
Euros
US dollars
202,877
6,250
24,296
55,044
/
3,510
Deutsche Mark
Canadian Dollars
1,569
/
Italian lira
/
945
Austrian schilling
/
319
Spanish peseta
/
318
153
45
Pound sterling
RMB
/
/
2
/
228,897
173,432
Others
Borrowings
■
Chief characteristics of the first convertible bond issue:
167,000 bonds with a face value of € 91.47 (FF 600)
Issue price:
€ 91.47 (FF 600) per bond
Due date and settlement day:
October 10, 1997
Term of bond:
5 years and 173 days
Annual yield:
2% per year, or € 1.83 (FF 12) per bond, payable on April 1 of each year starting April 1 1998
Gross redemption yield:
4.26% on October 10 1997
Normal redemption:
redeemed in full by April 1 2003 by redemption at a price of FF 681.58, or 113.6%
of the issue price
On March 31, 2002 the convertible bond is closed.
166,364 bonds were converted, 40,075 during this year.
Accelerated redemption of 636 bonds took place from May 21st to August 20, 2001.
■
Chief characteristics of the second convertible bond issue:
314,815 bonds with a face value of € 164.64 (FF 1,080)
As a consequence of the 5-for-1 stock split, one bond allows five shares to be subscribed with a face value of € 0.31
Issue price:
€ 164.64 (FF 1,080) per bond
July 16, 1998
Term of bond:
7 years
Annual yield:
3.80% per year, or € 6.26 (FF 41.04) per bond, payable on July 16 of each year
3.80% on July 16, 1998
Normal redemption:
redeemed in full by July 16, 2005 by redemption at a price of € 164.64 (FF 1,080),
or 100% of the issue price
151,094 bonds remain to be exercised.
61
■
Chief characteristics of the third convertible bond issue, OCEANE
(bond convertible/exchangeable into new and/or existing shares):
At its meeting on October 13, 2001, with the authorization granted by the Extraordinary General Meeting of October 19, 2001
the Board of Directors agreed to issue bonds with the option of conversion into and/or exchange for new or existing shares in
the company to a total maximum value of about 172.1 million Euros.
3,150,000 bonds with a face value of € 47.50
Each bond entitles the bearer to one share
Issue price:
€ 47.50 per bond
November 30, 2001
Term of bond:
5 years from date of settlement
Annual yield:
2.5% per year, payable on November 30, of each year.
4.5% on date of settlement (if there is no conversion and/or exchange of shares,
and if there is no accelerated amortization)
Normal redemption:
the bonds would be redeemed in full on October 30, 2006 by redemption at a price
of € 52.70, or roughly 110.94% of their face value.
On March 31, 2002 no convertible bond had been exercised.
XIV. SUNDRY CREDITORS AND ACCRUIED EXPENSES
Sundry creditors and acrrued expenses break down as follows :
03.31.02
Social security liabilities
03.31.01
9,293
8,106
Tax liabilities
20,818
13,622
Other debts*
19,539
8,198
5,229
4,546
54,879
34,472
Deferred income
Total
* Credits to be issued and credit balances for accounts receivable
62
FINANCIAL REPORT
Geographic breakdown of assets :
Assets
in K€
France
Germany
Great
Britain
Rest of
Europe
United-States
Canada
ROW
03.31.02
Total
(net values)
Goodwill/Business assets/Trademarks
25,347
11,816
3,053
69,629
2,125
111,970
150,906
138
214
10,953
1,092
163,303
Tangible assets
5,361
198
252
816
1,428
5,298
13,353
Financial assets
19,788
42
120
125
41
380
20,496
201,402
12,194
372
4,208
82,051
8,896
309,122
Intangible,assets
Fixed assets
Inventory,and work-in-progress
15,112
4,974
7,635
8,264
10,255
2,405
48,645
53,548
1,056
324
1
102
66
55,097
Trade receivables
28,882
16,440
19,095
16,731
23,440
1,890
106,478
Other receivables, prepayments and deferred income
41,310
1,356
1,661
1,872
15,154
8,823
70,176
40,365
5,215
2,461
2,520
8,310
5,914
30,548
Cash
6,128
Current assets
Total assets
40,365
185,345
29,041
31,176
29,389
57,260
19,098
351,309
386,747
41,234
31,548
33,597
139,311
27,994
351,309
3.1.4.4 Notes on the income statement
I. SALES
Breakdown of sales by geographical area:
03.31.02
03.31.01
K€
%
K€
%
Germany
43,892
12%
34,887
13%
GB
41,458
11%
34,048
13%
Scandinavia
13,230
4%
14,638
6%
Italy
16,030
4%
13,130
5%
France
67,975
19%
61,127
24%
Other European Countries
29,775
8%
18,246
7%
137,955
37%
69,406
27%
18,646
368,961
5%
100%
14,333
259,815
5%
100%
USA
Rest of the world
Total
Breakdown of sales by activity:
03.31.02
K€
Distribution
Development
Publishing
Total
03.31.01
%
K€
%
18,448
5%
8,470
3%
265,652
72%
170,828
66%
84,861
368,961
23%
100%
80,517
259,815
31%
100%
63
II. OTHER OPERATING INCOME
V. FINANCIAL INCOME
Other operating income breaks down as follows:
Net financial income breaks down as follows:
03.31.02
03.31.01
Capitalized production costs
77,001
60,723
Production subsidies
6,633
7,094
Write-back of provisions
2,186
3,063
Transfer of expenses
875
824
6,651
465
93,346
72,169
Other income
Total
III. OTHER OPERATING EXPENSES
Other operating expenses break down as follows:
Other external expenses
03.31.02
03.31.01
114,707
90,880
1,493
545
116,200
91,425
Other expenses
Total
Other external expenses consisted mainly of advertising expenses,
royalties, and the rental of property and movables.
Conversion differentials
03.31.02
03.31.01
1,283
1,662
Interest and revenue from sales
of assets
(9,609)
(3,918)
Net depreciation
(2,234)
(884)
(10,560)
(3,140)
Total financial income
The conversion differential caused by using the historic cost
method is not significant.
The total conversion differential taken to share capital amounts
to. K€ 531.
This total essentially reflects the fall in dollar values between
the historic value and the closing rate on March 31, 2002.
Currency risk:
In order to hold down the Group’s foreign exchange risks, Ubi Soft
Entertainment covers currency risks in several ways :
■
when the parent company loans foreign currency to its subsidiaries,
it also takes out a loan in the same currency. Thus if the exchange
rate rises or falls, any gain or loss on the loan is offset by a gain
or loss on the parent company’s loan in the opposite direction.
■
in the case of risks on currency sales associated with commercial
transactions, these are either automatically offset for the year by
other transactions in the opposite direction (purchases of goods
in a foreign currency offset by royalty payments by subsidiaries in
the same currency) or covered by forward sales contracts.
IV. DEPRECIATION AND PROVISIONS
Depreciation and provisions break down as follows:
03.31.02
Depreciation of intangible
fixed assets
57,987
Depreciation of tangible
fixed assets
5,755
Provisions for charges to be spread
over several financial years
401
Provisions for current assets
2,572
Total
64
66,715
03.31.01
32,885
6,045
66
1,972
40,968
FINANCIAL REPORT
VI. EXCEPTIONAL INCOME/EXPENSE
Exceptional income breaks down as follows:
03.31.02
03.31.01
Exceptional income from
management transactions
2,728
71
Exceptional income from capital
transactions
(276)
(128)
(275)
(7)
2,177
(64)
Total net exceptional income
On March 31, 2002, exceptional income includes the accumulated
income from companies that were formerly controlled, and were
then integrated into the consolidation structure during the financial
year, together with the bonus on the purchase of equity shares, the
compensation paid by Take2 and bankruptcy of the customer Kmart.
VII. CORPORATE TAXE
Breakdown of deferred taxes by main category:
Corporate tax breaks down as follows:
03.31.02
03.31.02
03.31.01
Leasing
Current tax
2,869
4.730
Deferred tax
6,347
(5,032)
Realizable and liquid assets
9,216
(302)
Margin on inventory
Total
70
3
(7,695)
(5,602)
47
(1,021)
Elimination of intercompany transactions
Tax payable by French companies was calculated at the rate in force
on March 31, 2002, i.e. 33.33% plus 3%.
Deferred tax assets
Deferred tax liabilities
03.31.01
14,185
8,159
5,162
2,128
(24)
(368)
(165)
(13,425)*
1,500
Elimination of securities
Total
03.31.02
790
Elimination of internal results
Standardization
03.31.01
78
277
6,347
(5 032)
* including 8.6 for the transfer of TLC business assets to Red Storm and 3.9 for the
restatement of intangible assets
Reconciliation of taxation rates:
03.31.02
Pre-tax earnings, excluding goodwill
Theoretical tax (34.33%)
Réintégrations
Ubi Soft Entertainment : 1,825*34.33%
Impact of tax rate difference for subsidiaries :
Ubi Soft Inc.: 13,325* [41.76% - 34.33%]
Red Storm: (3,571)* [38.95% - 34.44%]
Other subsidiaries
Total
22,579
7,752
627
990
(165)
12
9,216
65
Deferred tax credits recorded /not recorded:
In K €
Ubi Soft Inc.
DTC recorded
DTC not recorded
Total
862
/
862
10,835
/
10,835
Ludimedia S.A.
406
377
783
Ubi Studios Ltd.
693
3,769
4,462
Ubi.com S.A.
540
/
540
Ubi.com Inc.
374
/
374
Gamebusters GesmbH
277
/
277
Blue Byte Inc.
3,362
/
3,362
Red Storm
1,134
/
1,134
Canada Inc.
492
/
492
327
/
327
Other
80
/
Total
19,382
4,146
80
23,528
Total deferred tax credits not booked as of March 31, 2002:
■
Ubi Studios Ltd.: K€ 3,769.
As a precaution, and given the size of the deferred tax credits, it was decided to use the tax credits to K€ 693.
■
Ludimedia S.A.: K€ 377.
VIII MISCELLANEOUS INFORMATION
1. Geographic breakdown of earnings
En K €
France
Germany
Great
Britain
Rest of
Europe
USA
Canada
ROW
03.31.02
Total
Sales
67,975
43,892
41,458
59,035
137,955
18,647
368,962
Other operating income
74,383
624
175
820
16,715
629
93,346
Purchases consumed and other operating expenses
95,997
18,295
16,609
21,926
106,841
8,473
268,141
Wages and social security cost
35,058
4,311
3,122
7,590
34,012
8,919
93,012
1,743
537
116
220
383
478
3,477
60,042
752
147
957
3,635
1,182
66,715
(50,482)
20,621
21,639
29,162
9,799
223
30,962
Tax and duty
Earning before interest and tax
2. Off-balance sheet commitments
Guarantees given:
Collateral for loans:
Guarantees received:
66
K€ 18,897
none
none
FINANCIAL REPORT
Leasing
Initial
value
Depreciation
5,928
5,099
Net value
Payments
made
828
934
The leasing agreements primarily cover IT hardware, and are
for a period of no more than 3 years.
Discounted bills not due: K€ 1.568
Retirement gratuities: because of the average age of the staff,
retirement commitments are insignificant.
Payments remaining
to be made
< 1 year
>1 year
643
499
Residual
value
32
Various products are marketed under licensing agreements
signed by Ubi Soft Entertainment S.A. As of March 31, 2002,
the commitments accepted by the company provided for the
payment of guaranteed minimum royalties.
At the closure of the financial year, commitments by virtue of
this guaranteed minimum amounted to M€ 68,8.
3. Director’s remuneration
Total gross remuneration paid out during the financial year by the company and its subsidiaries to directors
(L233-16 article) came to K€ 377. No attendance fees were paid.
Director identity
Amount / Total remuneration
Amount / Benefit in kind
€ 89.336
€ 79.275
€ 79.275
€ 64.034
€ 64.034
€ 914
None
None
None
None
GUILLEMOT Gérard
GUILLEMOT Yves
GUILLEMOT Michel
GUILLEMOT Claude
GUILLEMOT Christian
4. Events after closure of accounts
5. Personnel
■
As of March 31, 2002, employee numbers break down as follows:
■
■
On August 30, 2002 GUILLEMOT BROTHERS S.A. gave to
GUILLEMOT CORPORATION S.A. one million of shares for an
amount of M€ 15. At this date GUILLEMOT CORPORATION
S.A. hold 6.4% of capital and 6.6% of voting rights.
On September 6, 2002, Ubi Soft, in accordance with Article
L 233-8 of the French Commercial Code, announced that,
owing to the loss by GUILLEMOT BROTHERS S.A. (formerly
UBI PARTICIPATIONS SA) of part of its double voting rights
on 30 August 2002, the total number of voting rights linked
to the 17,368,732 shares making up Ubi Soft’s capital
stock is now 16,839,671.
Europe
934
Asia
234
Canada
369
USA
211
Morocco
73
Romania
63
Australia
14
Brazil
Total
3
1 901
Ubi Soft® Entertainment announced on September 9, 2002
that it has redeemed 752,000 2.5% convertible bonds, for
approximately 61% of their balance sheet value. The operation, which took place in August, represents a substantial
financial gain as well as a 14.2 million euro reduction in the
company’s net debt.
67
3.2 Corporate accounts on March 31, 2002
3.2.1 Balance sheet on March 31, 2002
Assets
in K€
Intangible assets
Goodwill
Financial assets
Fixed assets
Inventory and work-in-progress
Trade receivables
Other receivables
Cash
Current assets
Redemption premium
Accrued expenses
Total Assets
Liabilities
03.31.02
Amort/
dep
03.31.02
Net
03.31.01
Net
03.31.00
Net
258,055
12,867
6,586
124,396
401,904
15,904
53,548
100,213
48,318
40,365
4,866
263,214
15,294
6,622
105,927
/
3,097
4,385
113,409
792
/
405
2,445
/
/
3,642
/
/
152,128
12,867
3,489
120,011
288,495
15,112
53,548
99,808
45,873
40,365
4,866
259,572
15,294
6,622
124,343
37,042
2,423
162,653
326,461
18,465
36,391
69,418
80,518
9,476
13,107
227,375
185
2,608
68,870
/
1,977
111,455
182,302
10,078
24,467
68,677
52,553
13,706
23,371
192,852
200
1,538
687,034
117,051
569,983
556,629
376,892
03.31.02
03.31.01
03.31.00
5,384
266,406
3,999
(24,390)
306
5,156
259,343
12,496
(8,409)
173
5,055
251,573
9,960
3,102
49
251,705
268,759
269,739
522
498
422
190,882
29,261
3,261
52,262
1,026
27,048
13,217
316,957
29,275
137,811
49,606
37,154
545
23,800
8,020
286,211
36,424
11,559
8,419
26,128
588
18,033
3,643
104,794
799
569,983
1,161
556,629
1,937
376,892
17,013
12,248
126,099
11,712
6,757
4,802
26,988
3,261
32,696
49,568
1,024
8,419
1n K€
Capital
Premiums
Reserves
Earnings
Net investment grants
Equity capital
Bond debentures
Debts (1) (2)
Miscellaneous financial debts (3)
Tax and social security liabilities
Debts on fixed assets
Other debts
Total debts
Accrued expenses
Total Liabilities
(1) payable at less than one year
payable at more than one year
(2) current bank credit facilities and credit
balances
(3) including current accounts
68
03.31.02
Gross
FINANCIAL REPORT
Corporate accounts
3.2.2 Income statement on March 31, 2002
en K€
03.31.02
03.31.01
03.31.00
Production in financial year
Other operating income and costs transferred
Total operating income
226,134
8,887
235,021
161,470
6,458
167,928
126,250
4,429
130,679
Costs of sales
Changes in inventory
Other purchases and external charges
Tax and duty
Wages and social security costs
Other costs
Total operating expenses
107,703
3,127
86,499
744
393
380
59,053
257,899
97,117
(8,640)
51,221
632
87
147
33,326
173,890
61,458
(4,395)
36,562
561
326
46
31,721
126,279
Earnings before interest and tax
(22,878)
37
3,266
3,188
7,846
322
/
14,659
(5,962)
0
23
2,951
837
18,693
78
22,582
4,400
0
77
1,184
469
7,234
73
9,037
7 ,075
8,091
4,630
407
20,203
2,943
6,454
15,593
/
24,990
1,352
3,666
4,927
/
9,945
(5,544)
(28,422)
4,032
(24,390)
/
(2,408)
(8,370)
(39)
(8,409)
/
(908)
3,492
(390)
3,102
/
(24,390)
3,105
25
(8,409)
2,534
615
3,102
1,024
/
Financial income from equity holdings
Income from other securities and claims on fixed assets
Other interest and related income (1)
Unrealited exchange gains
Net proceeds from sales of transferable securities
Total financial proceeds
Appropriations to provisions
Other interest and related expenses (2)
Unrealized exchange losses
Net interest disposal on war betable security
Total financial expenses
Net financial income/expense
Operating income less net financial income/expense
Income before tax
Corporate tax
Net income for financial year
(1) including revenue from affiliated companies
(2) including expenses from affiliated companies
69
3.2.3 Consolidated funds flow statement on March 31, 2002
in K€
03.31.02
03.31.01
Flows arising from operating activities
Net profit
Depreciation of tangible fixed assets
Changes in provisions
Grants
(24,390)
(8,409)
57,516
32,533
5,002
2,488
(49)
/
10
39
38,089
26,651
Increase in operating fund requirements
7,714
(35,715)
Decrease in non-operational requirements
4,258
5,921
11,972
29,794
(90,994)
(123,581)
Flows arising from the disposal of fixed assets
Total cash flow arising from operating activities
Total flow
Flows arising from investments
Acquisitions of intangible assets
Acquisitions tangible assets
(2,388)
(1,861)
Acquisition of equity holding
(55,215)
(53,439)
Acquisition of other financial fixed assets
(11,160)
(60)
Charges to be spread over several years
(4,388)
(543)
Disposal of fixed assets
39,331
7
10
431
Proceeds from long-term loans and other financial assets
Cancel of equity investment after merger
100,000
/
Total flows arising from investments
(24,804)
(179,046)
164,300
17,575
Flows arising from financial transactions
New long-and medium-term loans
Repayment of loans
Increase capital
/
141
101
Increase in issue premium
2,087
464
Increase in conversion premium
3,771
6,841
Increase in issue premium on shares with warrants
2
7
Increase in issue premium on group savings scheme
1,242
/
(46,307)
41,187
Repayment of current account
Grants received
Total flows arising from financial transactions
Net cash flow
Net cash position at the beginning of the financial year
Net cash position at the end of the financial year
70
52,149)
182
124
73,269
66,299
98,526
(115,890)
(80,257)
35,633
18,269
(80,257)
FINANCIAL REPORT
Corporate accounts
3.2.4 Explanatory notes
on the Corporate Accounts
The following notes and tables, in which figures are shown in
thousands of Euros, are an integral part of the annual
accounts for the year ending March 31, 2002, and form an
annex to the balance sheet (before distribution of earnings),
which totaled € 569.98 million, and to the income statement,
which showed a loss of € 24.39 million.
■
The financial year covered a period of 12 months from April
1, 2001 to March 31, 2002.
These assets are amortized over the following periods:
■ commercial software programs: 3 years maximum;
■ software tools: 3 years.
Highlights of the financial year
In the course of the financial year, Ubi Soft Entertainment
S.A. absorbed over its Ubi Ventures subsidiary, of which it
owned 100%, and transferred TLC's business assets to its
subsidiary Red Storm Entertainment Inc.
It also acquired 40% of the company 3D Planet, and sold
its shares in Blue Byte GmbH to its subsidiary Ubi Soft
Entertainment GmbH.
3.2.4.1 Accounting principles
General accounting conventions were applied in compliance
with the principle of conservatism and the following fundamental criteria:
■
■
■
■
continuity;
consistency of accounting methods from one financial
year to the next;
time-period concept;
and compliance with the general rules governing the drawing
up and the presentation of annual financial statements.
The historical cost principle was applied as the basic method
for the valuation of items shown in the accounts.
3.2.4.2 Accounting rules and methods
Business assets
The business assets acquired include all the intangible elements
(customer base, know-how) needed for the company to do
business and grow. The intangible elements are obtained
from the average of productivity, sales and a sector-based
multiple.
Intangible assets
These mainly consist of software design expenses, i.e.:
■
commercial software programs which are in production or
being marketed;
software tools.
Software production costs are determined in accordance
with the guidelines issued by the Conseil National de la
Comptabilité [French National Accountancy Council] in April
1987. These costs are entered in the accounts under
“intangible assets” (account no. 232) as software development progresses. From the date of their first commercial
release they are transferred to the “Released software
programs” or “External developments” (account no. 208).
Parent software programs are amortized with effect from
their commercial release date on the basis of the expected
market life of the product concerned, as assessed at the
account closing date.
The amortization period is between 12 and a maximum of
36 months. Net pre-tax sales of the various products until
the end of their market life are estimated at K€ 742.652
(they came to K€ 643.526 on 31 March 2001). This sum
allows the corresponding parent software programs to be
amortized. The system of amortization used is the straight-line
method. However, if sales are less than estimated, a supplementary amortization will be carried out. Software tools,
which are a set of complex development programs that
may be used for a number of products, are amortized over
a maximum of 36 months using the straight-line method.
These are shown at historical cost. The depreciation rates
applied are as follows:
■
■
■
■
Equipment:
Fixtures and fittings:
Computer equipment:
Office furniture:
5 and 10 years (straight-line);
3 years (diminishing balance);
If the business assets were to be valued at less than their
book value, a provision for amortization would be applied.
71
Financial fixed assets
Equity holdings are valued at their historical cost, excluding
acquisition fees. If the book value is lower than the gross
value at the end of the year, a provision for depreciation is
made to cover the difference.
The value of an equity holding is reviewed at the end of each
financial year on the basis of the net position of the subsidiary
concerned on that date and its prospects for growth over
the medium term.
Inventory
Inventories are valued on the basis of cost prices based on
normal trading, using the weighted average cost method.
The gross value of goods and supplies includes purchase
price and related expenses. Financial costs are excluded
from inventory valuation in all cases.
A provision for depreciation is made where the probable net
realizable value is less than the book value.
Conversion of accounts payable and receivable expressed
in foreign currencies
These were converted at the rates applicable on March 31,
2002. Any resulting unrealized exchange gains or losses
are shown in the Balance Sheet under a specific heading. A
provision for exchange risk is made in the accounts if
conversion reveals the existence of underlying losses.
Provisions for risks and charges are made when risks and
charges which relate to a clearly determined object, but
which are not certain to arise, are made more likely by
events which have occurred or are in progress.
covered :
■
■
■
Trade receivables
These are valued at their face value. Where applicable,
receivables may be depreciated by way of a provision when
their inventory value is less than their book value.
the exchange risks relating to discounting of claims and
debts denominated in foreign currencies.
risks relating to a tax inspection,
risks relating to the closure of certain subsidiaries with
3.2.4.3 Explanatory notes
on the Balance Sheet
I. INTANGIBLE ASSETS
Intangible assets break down as follows:
Intangible fixed assets
On 03.31.01
Gross
Increase
Decrease
Gross
108,542
(1) 60,697
16,448
152,791
4,846
(2) 8,923
6,121
7,648
Software programs in progress
65,494
80,383
65,494
80,383
Software tools
19,153
(3) 3,182
7,538
14,797
Other licenses
642
86
/
728
/
1,636
/
1,636
15
198,692
57
154,964
/
95,601
72
258,055
Released software programs
Others intangible assets in progress
Other
Total
(1) including K€ 58 943 for reclassification of accounts to the accounts
72
On 03.31.02
FINANCIAL REPORT
Corporate accounts
Depreciation
On 03.31.01
On 03.31.02
Cumulative
Increase
Decrease
Cumulative
60,197
49,267
16,309
93,155
2,061
1,946
549
3,458
Software tools
11,561
4,742
7,538
8,765
Other licenses
530
19
/
74,349
55,974
24,396
549
105,927
Released parent software programs
Total
Business assets
Nature
On 03.31.01
Cumulative
On 03.31.02
Increase
Decrease
Cumulative
11,342
Distribution in France
11,342
/
/
TLC
25,700
/
25,700
/
/
1,525
/
1,525
37,042
1,525
25,700
12,867
LOGICO
Total
II. TANGIBLE FIXED ASSETS
On 03.31.01
On 03.31.02
Gross
Increase
Decrease
Gross
1,695
741
118
2,318
8
/
/
8
3,795
1,636
1,183
4,248
Tangible fied assets in progress
/
5,498
11
2,388
/
1,301
11
6,585
Cumulative
Increase
Decrease
Cumulative
630
169
118
681
8
-
-
8
2,437
1,154
1,183
2,408
Total
3,075
1,323
1,301
3,097
Fittings
Transport equipment
Total
Depreciation
On 03.31.01
Fittings
Transport equipment
On 03.31.02
73
III. FINANCIAL ASSETS
Financial assets break down as follows:
On 03.31.01
Equity holdings
Other fixed investments
Loans
Deposits and guarantees
Total
The increase in equity holdings is primarily the result of the
equity issues by Ubi Soft Inc. (San Francisco) and Ubi Holding
Inc., totaling M€ 14,3 and M€ 21,8 respectively.
On 03.31.02
Gross
Increase
Decrease
Gross
164,893
55,215
107,100
113,008
4
/
/
4
/
10,991
/
10,991
235
165,132
169
66,375
11
107,111
393
124,396
The reduction equity holdings is due to the merger between
Ubi Soft Entertainment S.A. and Ubi Ventures S.A, together
with the transfer of Blue Byte GmbH shares to Ubi Soft GmbH.
Provisions
On 03.31.01
On 03.31.02
Cumulative
Increase
Decrease
Cumulative
Equity holdings
2,478
113
2,933*
1,592
Loans
/
/
453
Total
2,478
113
3,386
/
1,592
* Provisions essentially relate to Teamchman Inc. shares for M€ 1,9.
IV. INVENTORY AND WORK-IN-PROGRESS
Inventory and work-in-progress break down as follows:
On 03.31.02
Goods
Total
On 03.31.01
Gross
Provisions
Net
Net
15,904
15,904
792
792
15,112
15,112
18,465
18,465
The increase in inventory is linked to the growth in business and the releasing of products during the last month of the
financial year.
V. ADVANCES AND INSTALLMENTS PAID
These are primarily guaranteed advances paid on licensing
contracts totaling K€ 53,431.
74
These advances are taken to earnings in proportion to sales
made of the licensed products.
FINANCIAL REPORT
Corporate accounts
VI. TRADE RECEIVABLES
Trade and other receivables break down as follows:
On 03.31.02
Trade receivables
Total
On 03.31.01
Gross
Provisions
Net
Net
100,213
100,213
405
405
99,808
99,808
69,418
69,418
Gross amount
< 1 year
> 1 year
10,991
10,991
The growth of this item is justified by the activity increase.
VII. STATEMENT OF CLAIMS AND DEBTS
STATEMENT OF CLAIMS
Claims on fixed assets
Loans
Other financial assets
Claims on current assets
Doubtful debts
Trade receivables
State (VAT credit, other)
Group and partners
Advances and installments
Other debtors
Prepaid expenses
Total
STATEMENT OF DEBTS
Convertible bond debentures
394
394
485
485
99,728
99,728
6,758
6,758
33,284
33,284
53,548
53,548
8,276
8,276
2,025
215,489
2,025
215,095
394
Gross amount
< 1 year
> 1 year
190,882
190,882
Borrowings from credit institutions
29,261
17,013
Trade payables
52,262
52,262
1,026
1,026
Other debts
13,217
13,217
27,048
27,048
3,261
3,261
113,827
Group and partners
Total
Bond debentures subscribed during the financial year
316,957
12,248
203,130
166,005
(including 16,380 in redemption premiums)
Borrowings taken out during the year
Bond debentures converted during the financial year
14,675
4,397
(including 455 by charging to redemption premiums)
Borrowings repaid during the year
Debt taken out from individuals
48,206
1,186
75
VIII. INCOME RECEIVABLE
Credits receivable from suppliers
Products not yet billed
Interest receivable
2,513
5,048
53
Total
7,614
IX. INVESTMENT SECURITIES
Investment securities are booked at acquisition cost.
At the closure any capital losses are provisioned.
Number
Ave. price
€
Gross value
K€
Provision
K€
Net value
K€
Percentage
of capital
568,141
32,6317
18,539
/
18,539
3.27%
8,039
2,714.96
21,826
/
21,826
/
Nature
Equity shares
UCITS
Total
40 ,365
40,365
X. CHARGES TO BE SPREAD OVER SEVERAL YEARS
The “Charges to be spread over several years” item consists of the costs of convertible bond debentures, amortized over
the term of the bond, plus the costs of acquiring fixed assets, amortized over three years.
Nature
On 03.31.01
On 03.31.02
Cumulative
Increase
Decrease
Cumulative
Costs of issuing of debt securities and OCEANE bond
357
Costs of acquiring business assets
491
4,388
638
4,107
/
182
Total
848
4,388
820
309
4,416
XI. SHARE CAPITAL
en K€
Balance on
03.31.01
Capital
5,156
premium
259,343
Legal reserves
505
Regulated reserves
238
Other reserves
11,753
Carrying forward debitor
/
Earnings
(8,409)
Investment grants
173
Total
268,759
76
Appropriation
of FY 00/01
Earnings
Capital
increase
in cash
and by bond
conversion
Earnings
01/02
228
7,063
(88)
(8,409)
8,409
0
(24,390)
133
7,336
(24,390)
Balance
on
03.31.02
5,384
266,406
505
238
11,665
(8,409)
(24,390)
306
251,705
Proposed
appropriation
of FY01/02
earnings
(24,390)
24,390
0
Balance
on 03.31.02
after
appropriation
of FY01/02
earnings
5,384
266,406
505
238
11,665
(32,799)
/
306
251,705
FINANCIAL REPORT
Corporate accounts
NEW SHARES
■ November 3, 1999 share warrants
372,058, 2 warrants needed to subscribe a share of face value € 1.52 (FF 10)
Initial number of warrants
€ 136 (FF 892.10).
Issue price:
Strike period:
from 3 November 1999 to November 2, 2002
Strike price:
€ 170 (FF 1,115.13).
26 warrants had been exercised during the fiscal year.
As of March 31, 2002, 340,542 warrants had still not been exercised.
■ March 12, 2001 share warrants
53,266, 1 warrant needed to subscribe a share of face value € 0.31
Issue price:
€ 0.01 (FF 0.07)
Strike period:
from 28 December 2001 to March 11, 2006
Strike price:
€ 40.288 (FF 264.27).
■ March 19, 2001 share warrants
9,044, 1 warrant needed to subscribe a share of face value € 0.31
Issue price:
€ 0.01 (FF 0.07)
Strike period:
from March 19, 2002 to March 18, 2006
Strike price:
€ 32.072 (FF 210.38).
Company Savings Scheme
Number of Ubi Soft Entertainment shares
The extraordinary portion of the Combined Ordinary and Extraordinary General Meeting of September 13, 2000, authorized
On 04.01.01
16,909,122
the Board of Directors to carry out a new UBI SOFT ENTER-
Exercised options
207,068
TAINMENT equity issue reserved for employees of the company
Bond conversion
205,470
and its French subsidiaries, to a maximum of 2.5% of the total
Share subscription warrants exercised
65
shares comprising the company's share capital at the time the
Subscription Company Savings Scheme
47,007
authorization was used, in particular by means of a Company
On 03.31.02
17,368,732
Investment Fund.
At its meeting on 10 April 2001, the Board of Directors used
On March 31, 2002, the share capital consisted of 17,368,732
the authorization granted by the Combined Ordinary and Extra-
shares with a face value of € 0.31, i.e. € 5,384,307.
ordinary General Meeting of 13 September 2000, setting the
subscription price of the shares to be issued at 26.72 Euros
each, and specified that these shares would be subscribed by
the UBI ACTIONS Company Investment Fund.
The employees subscribed 47,007 shares via the Ubi Actions
FCPE. The Board of Directors took note of this equity issue on
July 13, 2001.
Number of shares created
Face value
Subscription value
Subscription period
47,007
€ 0.31
€ 26.72
06.05.01 to 06.25.01
77
The capital increases and issue premiums during the past financial year were partly driven by the exercise of stock options.
For the record, the exercise conditions of the stock option plans are as follows:
Initial number of shares
Face value
Subscription price
Date of validity
Options still not exercised as of March 31, 2002
2th Plan
3rd Plan
4th Plan
5th Plan
6th Plan
250,000
250,000
40,471
400,000
44,605
€ 0.31
€ 0.31
€ 0.31
€ 0.31
€ 0.31
€ 12.10
€ 20.40
€ 38
34.51 F
€ 34.51
04.22.97
to
04.22.02
10.23.98
to
10.23.03
12.08.00
to
12.08.05
04.09.01
to
04.09.06
04.25.02
to
04.24.06
97,793
244,725
40,471
400,000
44,605
XII. PAYABLES
XIII. ITEMS RELATING TO AFFILIATED COMPANIES
Interest on borrowings from credit institutions
1,956
Bank charges payable
152
Total borrowings & financial debts
Trade payables, invoices not yet received
Credits to be issued
Total
Equity investments
101,785
2,108
Trade receivables
80,032
18,609
Other receivables
30,281
6,312
Current assets
Accounts Payable
631
Miscellaneous borrowings & financial debts
2,067
27,660
20,360
17,443
Other debts
1,406
Financial income
2,544
Financial charges
32
XIV. PROVISIONS ON THE BALANCE SHEET
Provisions for risks
For currency risks
Other provisions for risks and charges
Total
Provisions for depreciation
Of equity investments
Of other long term investment
Of inventory
Of trade receivables
Of other receivables
Of investment securities
Total
Total
78
On 04.01.01
Ubi Ventures
Year provisions
Year reversals
On 03.31.02
498
/
181
498
181
/
/
341
/
341
498
/
522
498
522
2,478
113
2,933
1,592
3,932
/
/
453
/
453
566
/
791
565
792
524
/
182
302
404
121
/
2,324
/
2,445
190
636
/ 826
/
3,879
749
6,683
3,285
8,026
4,377
749
7,205
3,783
8,548
FINANCIAL REPORT
Corporate accounts
XV. Financial Debts
Financial Debts break down as follows:
Bond debentures (1)
03.31.02
03.31.01
190,882
29,275
152
33,683
Borrowings from credit institutions (1)
Accrued interest
Advances in foreign currencies
Bank overdrafts
2,108
1,099
18,674
70,334
8,289
32,696
Advances by the State
Financial Debts
38
38
220,143
167,125
< 1 year
17,013
> 1 year and < 5 years
203,130
(1) fixed rate
Maturities still payable on 03/31/02
> 5 years
/
The breakdown of financial debts by currency is as follows:
French francs
Euros
US dollars
Pound sterling
Financial debts
03.31.02
03.31.01
-
105,884
195,705
6,250
24,285
54,989
153
2
220,143
167,125
79
The company has made three convertible bond issues with the following characteristics:
■ Chief characteristics of the first convertible bond issue:
Issue price:
€ 91.47 (FF 600) per bond
October 10, 1997
Term of bond:
Annual yield:
2% per year, or € 1.83 (FF 12) per bond, payable on April 1 of each year starting
April 1, 1998
4.26% on October 10, 1997
Normal redemption:
redeemed in full by April 1, 2003 by redemption at a price of FF 681.58,
or 113.6% of the issue price
On March 31,2002 the convertible bond is closed.
636 bonds have been repaid early, from May 21 to August 20, 2001.
■ Chief characteristics of the second convertible bond issue:
Issue price:
€ 164.64 (FF 1,080) per bond
July 16, 1998
Term of bond:
7 years
Annual yield:
3.80% on July 16, 1998
Normal redemption:
amortized in full by July 16, 2005 by redemption at a price of € 164.64 (FF 1,080),
or 100% of the issue price
163,721 bonds were converted, 1,019 during this year. 151,094 remain to be exercised.
■ Chief characteristics of the third convertible bond issue O.C.E.A.N.E.
(bond convertible / exchangeable into new and/or existing shares):
3,150,000 bonds with a face value of € 47.50.
Each bond give you the right to obtain a share
Issue price:
€ 47.50 per bond
November 30, 2001
Term of bond:
5 years
Annual yield:
2.50% per year, or € 1.1875 per bond, payable on November 30 of each year
4.50% on November 30, 2001
Normal redemption:
amortized in full by November 30, 2006 by redemption at a price of € 52.70,
or 110.94% of the issue price
None bond had been exercised during this year.
80
FINANCIAL REPORT
Corporate accounts
3.2.4.4 Notes on the Income Statement
I. SALES
II. DEPRECIATION AND PROVISIONS
The breakdown of sales in percentage terms, as of March 31,
2002, is as follows :
Depreciation and provisions break down as follows:
03.31.02
03.31.02
6%
11%
Depreciation of tangible assets
Development
59%
52%
Costs to be carried forward
Publishing
35%
37%
Provisions
100 %
100 %
Distribution
Total
Depreciation of intangible assets
Total
03.31.02
03.31.01
55,974
31,065
1,324
1,416
523
53
1,232
792
59,053
33,326
The breakdown of sales by geographic area, as of March 31,
2002, is as follows :
K€
%
Germany
33,976
15
UK
30,943
14
Scandinavia
8,259
4
Italy
9,901
4
France
50,952
23
Rest of Europe
25,426
11
USA
56,139
24
Reste of the world
10,538
5
226,134
100%
Total
III. NET FINANCIAL INCOME/EXPENSE
Net financial income breaks down as follows:
03.31.02
Financial income:
Income from other securities and claims on fixed assets
Other interest and related income
Unrealized exchange gains
Net proceeds from sales of investment securities
Financial charges:
Appropriations to provisions
Other interest and related expenses
Unrealized exchange losses
Net charges from sales of investment securities
Net financial income/expense
03.31.01
37
23
3,266
2,951
3,188
837
7,846
18,693
322
78
14,659
22,582
7,075
2,943
8,091
6,454
4,630
15,593
407
/
20,203
24,990
(5,544)
(2,408)
81
Foreign exchange risk
In order to limit the Group's foreign exchange risks, Ubi Soft
Entertainment has several ways of covering the risk of exchange
rate fluctuations:
■
when it makes a loan in a foreign currency to its subsidiaries, the parent company also takes out a loan in the
same currency. Thus if the exchange rate rises or falls,
any gain or loss on the loan is offset by a gain or loss on
the parent company's loan in the opposite direction.
■
in the case of risks on currency sales associated with
commercial transactions, these are either automatically
offset during the year by other transactions in the
opposite direction (purchases of goods in a foreign
currency offset by royalty payments by subsidiaries in
the same currency), or covered by forward sales
contracts.
IV. EXCEPTIONAL INCOME/EXPENSE
Exceptional income breaks down as follows :
03.31.02
03.31.01
Exceptional income:
Exceptional income from management transactions
Exceptional income from capital transactions
Exceptional charges:
Exceptional charges from management transactions
Exceptional charges from capital transactions
Total exceptional income/expense
4,242
/
39,380
7
43,622
7
4
1
39,341
45
245
/
39,590
46
4,032
(39)
On March 31, 2002, the exceptional income essentially consists of the bonus for the merger with Ubi Ventures (M€ 1.2)
and profit made on share buyback (M€ 2.8).
V. CORPORATE TAX
Current income before tax
82
03.31.02
03.31.02
(28,422)
(8,370)
4,032
(39)
Income before tax
(24,390)
(8,409)
Tax basis
(23 527)
(7 809)
FINANCIAL REPORT
Corporate accounts
3.2.4.5 Other Information
I. PERSONNEL
As of March 31, 2002, the work force consisted
of 5 executives.
II. FINANCIAL COMMITMENTS AND OTHER
INFORMATION
Guarantees given:
Collateral for loans:
Guaranteed received:
K€ 18 897
none
none
Leasing (K€):
Initial value
5,899
Depreciation
5,087
Net value
Payments made
812
924
Payments remaining to be made
< 1 year
>1 year
641
489
Residual value
18
Leased assets consist primarily of IT hardware.
Discounted bills not due: K€ 1,568.
III. DIRECTORS’ REMUNERATION
Retirement gratuities: because of the average age of the
staff, retirement commitments are insignificant.
Directors’ remuneration during the 2001/2002 financial
year came to K€ 275.
Various products are marketed under licensing agreements
signed by Ubi Soft Entertainment S.A. As of March 31,
2002, the commitments accepted by the company provided
for the payment of guaranteed minimum royalties.
At the closure of the financial year, commitments by virtue
of this guaranteed minimum amounted to M€ 68,8.
IV. SUBSIDIARIES AND AFFILIATED COMPANIES
ON MARCH 31, 2002
No events likely to have an impact on the financial statements
have occurred to date.
Next year, the reductions (increases: none) in future tax
liability will be as follows:
■
■
organic
98
exchange rate fluctuations
799
K€ 897
Ubi Soft Entertainment S.A. undertakes to provide financial
support to its subsidiaries to meet their cash requirements.
83
V. SUBSIDIARIES AND AFFILIATED COMPANIES ON MARCH 31, 2002
Country
Currency Capital
Reserves
and
amounts
carried
forward
before
allocation
(currency
1000)
(currency
1000)
Share of
equity
capital
held
Book
Loans and
value of
advances
securities granted by
held the company
and not yet
repaid
Total
collateral
and
guarantees
provided
by the
company
Net
Net Dividends
sales
income collected
(excl.
for last
tax) complete
year
(€ 1000)
Gross
Net
(currency
1000)
(currency
1000)
(currency
1000)
SUBSIDIARIES AT LEAST
50% OF CAPITAL HELD
UBI SOFT
ENTERTAINMENT GmBH
Germany
Euro
8,820
2,600
100%
9,057
9,057
3,124
10,226
47,666
1 419
/
UBI SOFT HOLDINGS Inc.
USA
Dollar
47,137
/
100%
54,725
54,725
5
/
/
(2)
/
SINISTER GAMES Inc.
USA
Dollar
86
796
100%
7,171
7,171
/
/
1,927
50
/
UBI SOFT SPA
Italy
Euro
241
969
100%
4,555
4,555
1,327
/
23,632
(419)
/
USA
Dollar
14,000
(1,771)
100%
15,489
15,489
9,040
1,790
121,643
7,708
/
Canada Canadian
Dollar
2,501
(1,020)
100%
1,743
1,743
2,500
/
16,575
(239)
/
92,740
92,740
UBI SOFT Inc.
UBI SOFT Canada Inc.
Subtotal
Other subsidiaries
French subsidiaries
Euro
2,186
1,548
821
Foreign subsidiaries
Euro
7,690
6,523
11,745
9,876
8,071
Euro
5,295
3,366
419
French interests
Euro
5,096
4,900
3,385
Foreign interests
Euro
1
Subtotal
CAPITAL HOLDINGS
OF BETWEEN
10 AND 50%
French subsidiaries
CAPITAL HOLDINGS
LESS THAN 10%
Subtotal
GENERAL TOTAL
84
5,097
4,900
113,008 109,077
FINANCIAL REPORT
Corporate accounts
3.2.5 Financial table (Article 135 of the Decree of March 23, 1967)
Financial year
97/98
98/99
Share capital
3,390,989
3,423,781
5,054,712
5,155,558
5,384,307
Ordinary shares outstanding
2,224,343
2,245,853
(1) 16,578,368
16,909,122
17,368,732
Preferred shares outstanding
99/00
00/01
01/02
/
/
/
/
/
Maximum number of shares
that may be created
264,957
608,262
(1) 2,698,235
2,870,262
5,646,664
• by bond conversion
167,000
464,503
1,215,750
964,120
3,905,470
97,957
143,759
630,940
992,477
827,594
/
/
851,545
913,665
913,600
Sales (K€)
81,241
102,895
126,250
161,470
226,134
Pre-tax income, profit sharing,
appropriation (K€)
16,035
30,482
35,812
26,651
33,101
1,978
3,158
/
/
/
/
/
/
/
/
2,383
4,223
3,102
(8,409)
(24,390)
• by exercise of stock options
• by exercise of warrants
Corporate tax (K€)
Employee profit-sharing
Income after tax, profit-sharing,
appropriations (K€)
Distributed earnings
/
/
/
/
/
Net earnings per share before
appropriations (K€)
6.32
12.17
2.16
1.58
1.91
Net earnings per share
after tax and appropriations (K€)
1.07
1.88
0.19
(0.50)
(1.40)
/
/
/
/
/
Dividend per share
Average workforce
Payroll (K€)
Social security contributions
and welfare benefits (K€)
44
25
5
5
5
1,825
1,124
240
66
275
748
411
86
21
119
(1) 5-for-1 stock split.
85
4
REPORT
BY THE STATUTORY AUDITORS
4.1 Report on consolidated accounts –
financial year ending March 31, 2002
Pursuant to the assignment allocated to us by your General Meetings, we have audited the consolidated
accounts of UBI SOFT ENTERTAINMENT S.A. for the financial year to March 31, 2002, as appended
to this report.
The annual accounts have been prepared by the Board of Directors. It is our task to express an opinion
on these accounts in the light of our audit.
We conducted our audit in accordance with accepted professional standards applied in France. These
standards require due diligence in order to ascertain with reasonable certainty that the annual
accounts contain no material anomalies. An audit consists of the examination, on a sampling basis, of
evidence relevant to the amounts and to the disclosures made in the financial statements. It also involves
an assessment of the accounting principles applied, of the significant estimates made in the preparation
of the financial statements and of their overall presentation. It is our view that the audit we have
carried out forms a true and fair basis for the opinion expressed below.
We hereby certify that, from the point of view of French accounting rules and principles, the consolidated
accounts are honest and in order, and present an accurate picture of the assets, financial situation
and income of the consolidated corporate entity and its constituent companies.
Without wishing to cast doubt upon the opinion expressed above, we would draw your attention to the
following point, which is explained in the paragraph devoted to the major events of the financial year in
the introduction to the appendix containing the consolidated accounts. Your company decided, with
effect from the financial year ending March 31, 2002, to amortize business assets acquired since CRC
regulation no. 99-02 on consolidated accounts came into force over a period of 20 years. This being
the case, the company entered an appropriation of K€ 2,021 in the accounts for this financial year.
We have also checked the information provided in the report on the Group’s management. With the
exception of the consequences of the actions described above, we have no further comments to make
concerning the accuracy of this information or its consistency with the consolidated accounts.
Rennes and Paris, August 26, 2002
86
CABINET ANDRE METAYER
COMPAGNIE CONSULAIRE
D’EXPERTISE COMPTABLE JEAN DELQUIE
André METAYER
Benoît FLECHON
FINANCIAL REPORT
Report by the Statutory Auditors
4.2 General report on the financial year
ending March 31, 2002
Dear Sir or Madam:
Pursuant to the assignment vested in us by your General Meetings, we hereby present our
report on the financial year ended March 31, 2002 concerning:
the examination of the UBI Soft Entertainment S.A. annual accounts, as appended to this report,
including the specific checks and information required by law.
The annual accounts have been prepared by the Board of Directors. It is our task to express
an opinion on these accounts in the light of our audit.
I – OPINION ON THE ANNUAL ACCOUNTS
We conducted our audit in accordance with accepted professional standards applied in France. These
standards require due diligence in order to ascertain with reasonable certainty that the annual
accounts contain no material anomalies. An audit consists of the examination, on a sampling basis,
of evidence relevant to the amounts and to the disclosures made in the financial statements. It also
involves an assessment of the accounting principles applied, of the significant estimates made in the
preparation of the financial statements and of their overall presentation. It is our view that the audit
we have carried out forms a true and fair basis for the opinion expressed below.
We hereby certify that the financial statements, which have been drawn up in accordance with the
current accounting rules and principles in France, give a true and fair view of the results obtained for
the period in question and of the financial situation and assets of the Company at the end of this
accounting period.
II – SPECIFIC CHECKS AND INFORMATION
In accordance with accepted professional standards, we have also carried out the specific
checks required by law.
We have no comments to make concerning the accuracy of the information given in the Board
of Directors' report, or in the documents sent to shareholders concerning the financial situation
and annual accounts, or their consistency with the annual accounts.
In accordance with the law, we have satisfied ourselves that the various notices relating to
acquisition of equity holdings and control and to the identity of the holders of share capital were
given to you in the management report.
André METAYER
Benoît FLECHON
87
4.3 Special statutory auditor’s report on
regulated agreements
FINANCIAL YEAR ENDING MARCH 31, 2002
Dear Sir or Madam:
In our capacity as the Statutory Auditors of your company, we hereby present our report on regulated
agreements.
Pursuant to Article L.225-40 of the Commercial Code, we have been advised of the agreements for
which prior authorization was given by your Board of Directors.
It is not our responsibility to look for other agreements that may exist, but to inform you, on the basis
of the information given to us, of the essential features and details of the agreements of which we
have been advised, but without passing judgment on their usefulness and validity.
According to the provisions of Article 92 of the decree of March 23, 1967, it is your responsibility
to assess whether it is in your interests to enter into these agreements before approving them.
We have carried out our work in accordance with accepted professional standards. These standards
require due diligence in order to ascertain that the information provided to us agrees with the basic
documents from which it was derived.
1- AGREEMENTS MADE DURING THE YEAR FOR WHICH PRIOR
AUTHORIZATION WAS GIVEN
1-1 WITH UBI PARTICIPATIONS
■
Agreement authorized by the Board of Directors on January 31, 2002.
Acquisition of 89,950 shares in UBI SOFT EDUTAINMENT S.A., for a total of 137,127.89 Euros.
1-2 WITH GAMELOFT FRANCE S.A.
■
Agreement authorized by the Board of Directors on August 20, 2001.
Acquisition of all shares comprising the share capital of GAMELOFT S.A. (Lausanne), a company
under Swiss law, for the sum of 24,000 Euros.
1-3 WITH LUDIMEDIA
■
Agreement authorized by the Board of Directors on December 31, 2001.
Acquisition of 499 shares of LUDI FACTORY Ldt. for a total of 381,123 Euros.
1-4 WITH UBI SOFT ENTERTAINMENT G.M.B.H.
■
Agreement authorized by the Board of Directors on February 22, 2002.
Sale of all the shares of BLUE BYTE SOFTWARE GMBH & CO. KG for a total of 7,089,880 Euros.
1-5 WITH UBI SOFT DIVERTISSEMENT Inc.
■
Agreement authorized by the Board of Directors on January 14, 2002.
Loan granted to the subsidiary on January 18,2002 in the amount of CAD 2,000,000 and repaid
at the LIBOR CAD rate plus 1.75% annually. Interest for the exercise amount to 4,964.13 Euros.
The directors involved in the above agreements were: Yves GUILLEMOT, Michel GUILLEMOT, Claude
GUILLEMOT, Gérard GUILLEMOT and Christian GUILLEMOT.
88
FINANCIAL REPORT
Report by the Statutory Auditors
1-6 WITH MRS. YVETTE GUILLEMOT AND MESSRS YVES, MICHEL, CLAUDE, GÉRARD
AND CHRISTIAN GUILLEMOT
■
Agreement authorized by the Board of Directors on July 9, 2001.
Acquisition of six shares in UBI VENTURES for a total of 6 Euros, in order to gain ownership of the
entire share capital of the said company with a view to its merger with/takeover by your company.
1-7 WITH RED STORM ENTERTAINMENT, Inc.
■
Agreement authorized by the Board of Directors on March 7, 2002.
Sale of “TLC” shares for a total of twenty-four million dollars (24,000,000 USD).
Director involved: Mr. Yves Guillemot.
2- AGREEMENTS REACHED DURING THE PREVIOUS FINANCIAL YEAR
WHICH REMAINED IN FORCE DURING THIS FINANCIAL YEAR.
Moreover, pursuant to the decree of March 23, 1967, we have been informed that the following
agreement, which was approved during a previous financial year, remained in force during the past
financial year:
WITH LUDIMEDIA
Directors concerned: Messieurs Michel GUILLEMOT, Claude GUILLEMOT, Gérard GUILLEMOT, and
Christian GUILLEMOT.
Agreement authorized by the Board of Directors on December 1, 1998.
Under a license agreement for educational and cultural software, your company paid a total of
791,518.35 Euros (excluding tax) during the financial year ended March 31, 2002.
André METAYER
Benoît FLECHON
89
4.4 Report
on remuneration
Article L.225-115-4° of the code de commerce.
On the basis of our audit report on accounts closed on the 03/31/2002, we certify that the total
of all remuneration, to the highest-paid employees of the company, amounted to € 275.331.
This amount correspond to the amount registered in the accounts.
The Board of Directors
90
André METAYER
Benoît FLECHON
RAPPORT FINANCIER
Resolutions
5
PROPOSED RESOLUTIONS SUBMITTED
FOR APPROVAL TO THE COMBINED
ORDINARY AND EXTRAORDINARY GENERAL
MEETING ON SEPTEMBER 12, 2002
5.1 Agenda for the ordinary general
meeting
FIRST RESOLUTION
FOURTH RESOLUTION
(Approval of the Company's financial statements for the
financial year ended March 31, 2002)
(Allocation of net earnings for the financial year ended March
31, 2002)
The General Meeting, having heard the Annual Report of the
Board of Directors and the general report of the Statutory
Auditors, hereby approves the Company's financial statements
to March 31, 2002 as submitted to the meeting, in addition
to the transactions reflected in the statements or described
in the reports.
The General Meeting hereby resolves that the loss for the
period to March 31, 2002, in the amount of € 24,389,657.33,
should be carried forward.
SECOND RESOLUTION
(Approval of the consolidated financial statements for the
year ended March 31, 2002)
The General Meeting, having heard the Annual Report of the
Board of Directors and the general report of the Statutory
Auditors, hereby approves the consolidated financial statements to March 31, 2002 as submitted to the meeting, in
addition to the transactions reflected in the statements or
described in the reports.
THIRD RESOLUTION
(Approval of contractual agreements of the types specified
in Articles L 225-38 and L 225-42 of the Code du Commerce)
The General Meeting, having heard the special report of the
Statutory Auditors, hereby approves the contractual
agreements of the types specified in Articles L 225-38 and
L 225-42 of the Code du Commerce, and approves the
conclusions reached.
The General Meeting also notes that no dividends have
been paid out during the preceding three financial years.
FIFTH RESOLUTION
(Full and final discharge to be given to the Directors)
The General Meeting hereby gives its full and final discharge
to the Directors for their management during the financial
year ended March 31, 2002.
SIXTH RESOLUTION
(Appointment of a new alternate Statutory Auditor to replace
Mr. Jean Delquie)
The General Meeting hereby resolves to appoint Mr. Le
Dorze of 90 Rue de Chateaugiron, 35000 Rennes, France,
as alternate Statutory Auditor to replace Mr. Jean Delquie,
now standing down, for the duration remaining to run on the
term of office of the latter, that is to say until the Annual
General Meeting called to approve the financial statements
for the period to March 31, 2007.
SEVENTH RESOLUTION
(Authorization for the Company's purchase and sale of its
own shares)
The General Meeting, proceeding in accordance with the
conditions of quorum and majority laid down for Ordinary
General Meetings, and having taken note of the report of the
91
Board of Directors and the prospectus approved by the
Commission des Opérations de Bourse, hereby authorizes
the Board of Directors, in accordance with the provisions of
Article L 225-209 of the Code du Commerce, to trade in its
own shares on the stock market.
This authorization shall remain valid for a maximum period of
18 months from the date of the present General Meeting.
It cancels and supersedes the authorization previously granted
to the Board of Directors by the Ordinary General Meeting
of September 29, 2001.
The purchase, sale or transfer of such shares may be effected
by any means on the stock market or by private transaction,
and may notably involve blocks of shares (without limit as to
volume), on one or more occasions and, where applicable, in
the event of a public takeover bid.
In order to ensure proper implementation of the present
resolution, all necessary powers are vested in the Board of
Directors for that purpose:
■
for the drawing up of all and any prospectuses, the making
of all and any declarations and the performance of all and
any formalities with respect to the Commission des
Opérations de Bourse and the Conseil des Marchés
Financiers;
■
to give all and any stock market orders and to enter into
all and any agreements to that effect;
■
to carry out all and any other formalities, and generally to
do all things necessary.
The maximum purchase price per share is hereby set at € 50.00
and the minimum sale price per share at € 8.00.
The General Meeting hereby authorizes the Board of Directors
to redeem shares in the Company up to a maximum of 10%
of the registered share capital, this being equal at the date
hereof to a maximum of 1,736,873 shares, with a maximum
nominal stock value of € 86,843,650, as based on the maximum purchase price of € 50.00 authorized above.
The objectives of such trading would be, in order of priority,
and depending on the opportunities arising, as follows:
■
stabilization of the market price for the Company's stock
by systematic intervention against the dominant market
trend for that stock; purchase and sale of shares to
reflect the changing market situation;
■
delivery of shares on exercise of rights attaching to securities conferring such entitlement on the holder, by repayment, conversion, exchange, presentation of a voucher or
any other manner;
■
delivery of shares as payment or exchange of value in
connection with operations for growth by acquisition;
■
allocation to employees or officers of the Company and
affiliated entities, enabling them to benefit from the
Company's growth, of an option plan for the purchase or
subscription of shares, or a corporate savings plan;
■
in order to facilitate the unblocking of cross equity holdings;
■
cancellation of shares.
Shares acquired in this way may be retained, sold, transferred
or cancelled in accordance with the terms of authorization
granted by the eleventh resolution on the agenda for the
extraordinary business of the General Meeting.
92
EIGHTH RESOLUTION
(Ratification of the relocation of the principal place of business
of the Company in accordance with Article L 225-36 of the
Code du Commerce)
The General Meeting hereby ratifies, in accordance with
Article L225-36 of the Code du Commerce, the relocation,
as from January 2, 2002, of the Company's principal place
of business from 61 Rue Saint Hélier, Rennes (35000),
France to 107 Avenue Henri Fréville BP 10704, 35207 Rennes
cedex 2, France, as determined by the Board of Directors at
its meeting of January 2, 2002.
NINTH RESOLUTION
(Vesting of powers for legal formalities)
The General Meeting hereby vests all necessary powers in
the bearer of a copy or extract of the minutes of the present
General Meeting for the purpose of carrying out all and any
filings or other formalities required by law.
FINANCIAL REPORT
Resolutions
5.2 Agenda for the extraordinary general
FIRST RESOLUTION
SECOND RESOLUTION
(Partial transfer of assets to UBI EMEA SARL)
(Partial transfer of assets to UBI EMEA SARL)
The General Meeting, having taken note of the agreement
for the partial transfer of assets, the report of the Board
of Directors, and the report of the official auditor appointed
for the corporate split, proceeding under the conditions of
quorum and majority laid down for Extraordinary General
Meetings, hereby declares that it approves all the provisions
contained in the aforementioned agreement signed with UBI
EMEA, along with all its annexes, determining the transfer
to the latter,
The General Meeting hereby places on record that the
transfer of that part of the assets of the Company forming
its business divisions relating to the production of video
games and their distribution in Europe, Asia and the Middle
East to UBI EMEA, shall be deemed effective only on completion
of the Extraordinary General Meeting of shareholders in UBI
EMEA approving such transfer and effecting the associated
increase in that company's share capital. As a consequence,
the General Meeting hereby makes the continuing validity of
the first resolution above dependent after adoption on the
satisfaction of this condition before March 31, 2003.
firstly, of the complete, independent division of the business
relating to video game production, for which the assets thus
transferred are valued at € 1,689,141.27, with associated
liabilities also transferred estimated at € 1,476,998.49 and,
secondly, the complete, independent division of the business
relating to video game sales distribution in Europe, Asia and
the Middle East, for which the assets thus transferred are
valued at € 68,366,629.17, with associated liabilities also
transferred estimated at € 13,427,872.21, provided however
that it has been expressly agreed that UBI SOFT ENTERTAINMENT offers no joint and several guarantee for the
liabilities associated with the two aforementioned divisions,
such liabilities having been entirely taken over by UBI EMEA,
and
that all transactions completed since April 1st, 2002 in connection with the transferred divisions shall be deemed to have
been conducted, whether the result is in debit or credit, for
the account and on behalf of UBI EMEA.
The General Meeting hereby notes that the above partial
transfer of assets shall be remunerated by means of the
issuance by UBI EMEA of 11,952,104 new shares each with
a nominal value of 1 euro, all entirely paid up and all allocated to
UBI SOFT ENTERTAINMENT with an effective date retroactive
to April 1st, 2002.
The General Meeting hereby specifically approves the level of
the premium on the above transfer of assets, in the amount
of € 43,198,795.74.
the bearer of a copy or extract hereof for the purpose of
carrying out all and any formalities required by law.
THIRD RESOLUTION
(Partial transfer of assets to UBI SOFT FRANCE SA)
The General Meeting, having taken note of the agreement
for the partial transfer of assets, the report of the Board
of Directors, and the report of the official auditor appointed
for the corporate split, proceeding under the conditions of
Meetings, hereby declares that it approves all the provisions
contained in the aforementioned agreement signed with UBI
SOFT FRANCE, along with all its annexes, determining the
transfer to the latter of the complete, independent division
of the business relating to video game sales distribution in
France, for which the assets thus transferred are valued at
€ 24,807,861.94, with associated liabilities also transferred
estimated at € 2,088,288.88, provided however that it has
been expressly agreed that UBI SOFT ENTERTAINMENT
offers no joint and several guarantee for the associated
liabilities, these having been entirely taken over by UBI SOFT
FRANCE, and
that all transactions completed since April 1st, 2002 in
connection with the transferred division shall be deemed to
have been conducted, whether the result is in debit or credit,
for the account and on behalf of UBI SOFT FRANCE.
The General Meeting hereby notes that the above partial
transfer of assets shall be remunerated by means of the
issuance by UBI SOFT FRANCE of 1,342,335 new shares
each with a nominal value of € 15.25, all entirely paid up, and
all allocated to UBI SOFT ENTERTAINMENT with an effective
date retroactive to April 1st, 2002.
93
The General Meeting hereby specifically approves the level of
the premium on the above transfer of assets, in the amount
of € 2,248,964.31.
the bearer of a copy or extract hereof for the purpose of
carrying out all and any formalities required by law.
FOURTH RESOLUTION
(Partial transfer of assets to UBI SOFT FRANCE S.A.)
The General Meeting hereby stipulates that the partial transfer
to UBI SOFT FRANCE of the assets of the Company forming
its complete and independent business division relating to
video game sales distribution in France shall be deemed effective
only on completion of the Extraordinary General Meeting of
shareholders in UBI SOFT FRANCE approving such transfer
and effecting the associated increase in that company's share
capital. As a consequence, the General Meeting hereby makes
the continuing validity of the third resolution above dependent
after adoption on the satisfaction of this condition before
March 31, 2003.
FIFTH RESOLUTION
(Ratification of the stock option plan of October 25, 2001)
The General Meeting, having taken note of the report of
the Board of Directors, proceeding under the conditions of
Meetings, hereby approves all provisions of the option plan
for the subscription of stock as instituted, under the authorization by the Extraordinary General Meeting of October 19,
2001, by the Board of Directors at its meeting of October
25, 2001, in order that said plan may meet the conditions
laid down by the Security Exchange Commission for qualification
as an Incentive Stock Option by the American authorities and
thus be eligible to benefit from the favorable treatment
extended to this type of plan.
The General Meeting hereby notes that the Company has
granted under the aforementioned plan 44,605 share
subscription options to officers and employees of the USregistered companies SINISTER GAMES Inc. and UBI SOFT
ENTERTAINMENT Inc., at a subscription price of € 34.51,
available for exercise, in a number of brackets, from April 25,
2002 to April 24, 2006 inclusive.
94
SIXTH RESOLUTION
(Empowerment of the Board of Directors to make increases
in the share capital, with accompanying maintenance of
preferential share subscription rights, up to a maximum
nominal amount of € 8,000,000)
The General Meeting, proceeding under the conditions of
Meetings, having taken note of the report of the Board of
Directors drawn up in accordance with the provisions of
Article L 225-129 III of the Code du Commerce:
1- Hereby empowers the Board of Directors to effect, on
one or more occasions, in the proportions and on the
dates it shall judge to be appropriate, the issuance, with
accompanying maintenance of the preferential subscription
rights of the shareholders, both in France and abroad, of
the following:
(a) shares to which may nor may not be attached
warrants for the purchase of stock in the Company,
(b) securities giving a right, by subscription, conversion,
exchange, redemption, presentation of a warrant, a
combination of these means or in any other way, to the
allocation, at any time or on a fixed date, of securities
representing a share in the company's capital and
issued or to be issued for this purpose. Such securities
may be issued in any form compatible with the legislation
in force, and notably those forms designated in Articles
L 225-150 to L 225-176 of the Code du Commerce and
Article L 228-91 of that same Code;
(c) warrants granting their holders the right to subscribe securities representing a share in the company's
capital, and authorizes the Board of Directors to
increase the share capital to permit said warrants to
be exercised. The issuance of such warrants may be
effected by means of a subscription offer subject to
the conditions stipulated above, or by allocation free of
charge to the holders of existing stock, pursuant to
Article L 228-95 of the Code du Commerce.
2- Hereby resolves that the maximum total nominal value
of such increases in share capital which may be effected
immediately and/or at a future date by virtue of the powers
delegated above, shall not be greater than € 8,000,000,
not including adjustments which may be made pursuant
to legal requirements. The securities to which reference
is made in paragraphs (a), (b) and (c) above, as issued
under the present resolution, may be issued in foreign
currencies, Euros or any monetary unit defined by reference
to several currencies.
FINANCIAL REPORT
Resolutions
3- Hereby decides that the amount of the immediate or
deferred authorized capital increases carried out by virtue
of the powers delegated by the General Meeting to the
Board of Directors pursuant to this resolution shall be
charged to the total nominal amount of € 8,000,000
provided for in this resolution.
4- Hereby decides that the shareholders may exercise
their pre-emptive right as shareholders of record in accordance with the law. In addition, the Board of Directors is
hereby empowered to confer upon shareholders the right
to enter applications for the subscription of an adjustable number of shares above their basic fixed entitlement,
in proportion to the latter, and, in any event, up to the
limit of the application made.
If adjustable subscription applications, and, if applicable,
applications for basic fixed entitlement do not take up
the total number of shares or other securities as defined
above, the Board may exercise one and/or other of the powers
described below, in the order it deems appropriate:
■
limitation of the issue to the amount subscribed, subject
to the condition that such amount must be equal to at
least three-quarters of the planned issue;
■
the freely determined allocation of all or part of the shares
and/or other securities not subscribed;
■
the public offering of all or part of the shares and/or
other securities not subscribed.
5- Hereby stipulates that where applicable the above delegation of powers shall automatically entail, for the benefit
of holders of securities which may be issued with accompanying deferred entitlement to stock in the Company,
the express relinquishment by the shareholders to their
preferential rights of subscription to which such securities entitle them.
6- Hereby resolves that the maximum amount of debt
securities issues shall not exceed € 300,000,000, or a
value equivalent to this in the event of issuance in a foreign
currency or an accounting unit defined with reference to
several foreign currencies, at the date of the decision to
proceed with the issue; provided however that such maximum amount shall include all debt securities for the issuance
of which powers have been delegated to the Board of
Directors by the present General Meeting.
7- Hereby resolves that the present powers are conferred upon the Board of Directors, in compliance with the
provisions of L 225-129 of the Code du Commerce, for a
period of twenty-six months.
The Board of Directors shall enjoy all powers, including
that of delegating same to its Chairman, subject to the
conditions laid down in law, for the implementation of the
present authority, most notably for the purpose of determining the dates and terms governing issues, the form
and characteristics of the securities involved, the governing
prices and conditions, the amounts to be issued, the
subscription and effective dates, even where retroactive,
for the securities, the manner in which the issued shares
or other securities are to be paid up, and, where applicable,
to define the terms on which they may be redeemed on
the stock market, and generally to take all relevant steps
and to enter into any and all agreements in furtherance
of the due completion of the planned issues, to place on
record the increases in share capital resulting from
issues effected pursuant to the powers conferred hereunder, and to make the corresponding amendments to the
Bylaws of the Company. In addition, the Board of Directors
or its Chairman is empowered, where applicable, to charge
to the issue premium(s) all and any costs, and notably
expenses, dues and fees arising from the completion of
the issues.
In the event of the issuance of debt securities, the Board of
Directors shall enjoy all powers, including that of delegating
same to its Chairman, notably to determine whether such
instruments are to be subordinated or not, to set their rate
of interest, their term, the repayment price, whether fixed
or variable, with or without premium, the manner of their
amortization in accordance with market conditions, and the
terms on which such securities may grant entitlement to
stock in the Company.
8- Hereby resolves that the present empowerment shall
cancel any and all prior authority given for the issuance,
whether immediate and/or deferred, of stock in the Company
with accompanying maintenance of preferential stock subscription rights.
SEVENTH RESOLUTION
(Empowerment of the Board of Directors to make increases
in the share capital of the Company with accompanying
cancellation of preferential stock subscription rights, up to
a total nominal amount of € 8,000,000).
Directors and the special report of the Statutory Auditors,
drawn up in accordance with the provisions of Article L 225129 III of the Code du Commerce:
95
1- Hereby empowers the Board of Directors to effect, on
scription of all or part of the issue during a period and on
one or more occasions, in the proportions and on the
the terms it shall determine. Such priority right of sub-
dates it shall judge to be appropriate, the issuance, with
scription shall not entail the creation of negotiable rights,
accompanying cancellation of the preferential subscription
but may, if the Board of Directors considers it appro-
rights of the shareholders, both in France and abroad, of
priate, be exercised on the basis of applications for both
the following:
basic fixed entitlement and additional adjustable amounts
(a) shares to which may nor may not be attached
warrants for the subscription of stock in the Company;
(b) securities giving a right - by subscription, conversion,
exchange, redemption, presentation of a warrant, a
combination of these means or in any other way - to
the allocation, at any time or on a fixed date, of
securities representing a share in the company's
of stock.
5- Hereby resolves that if subscription applications from
existing shareholders and the general public do not take
up the total quantity of shares or other securities to be
issued under the terms set forth above, the Board may
exercise one and/or other of the powers described below,
in the order it deems appropriate:
capital and issued or to be issued for this purpose.
Such securities may be issued in any form compatible
■
with legislation in force, and notably those forms
subscribed, subject to the condition that such amount
designated in Articles L 225-150 to L 225-176 of
must be equal to at least three-quarters of the planned
the Code du Commerce and Article L 228-91 of that
issue;
same Code;
■
securities representing a share in the company's capital,
and, in order to permit said warrants to be exercised,
hereby authorizes the Board of Directors to increase the
Company's share capital. The issuance of such warrants
may be effected either on the basis of a subscription
offer subject to the conditions set forth here in above, or
by allocation free of charge to the holders of existing
stock, pursuant to Article L 228-95 of the Code du
Commerce.
2- Hereby resolves that the maximum total nominal value
of such increases in share capital which may be effected
immediately and/or at a future date by virtue of the
powers conferred as described above, shall not be greater
than € 8,000,000, not including adjustments which may
be made pursuant to legal requirements. The securities
to which reference is made in paragraphs (a), (b) and (c)
above, as issued under the present resolution, may be
issued in Euros, foreign currencies or any monetary unit
defined by reference to several currencies.
3- Hereby decides that the amount of the immediate or
deferred authorized capital increases carried out by virtue
of the powers delegated by the General Meeting to the
Board of Directors pursuant to this resolution shall be
charged to the total nominal amount of € 8,000,000
provided for in this resolution.
the freely determined allocation of all or some of the
shares and/or other securities not subscribed;
(c) warrants granting their holders the right to subscribe
96
limitation, where applicable, of the issue to the amount
■
the public offering of all or some of the shares and/or
other securities not subscribed.
6- Hereby stipulates that, where applicable, the above
empowerment shall automatically entail, for the benefit of
holders of securities which may be issued with accompanying deferred entitlement to stock in the Company,
the express relinquishment by the shareholders of their
preferential rights of subscription to which such securities
entitle them.
7- Hereby resolves that the maximum principal amount of
debt securities issued cannot exceed € 300,000,000, or
a value equivalent to this in the event of issuance in a foreign
currency or an accounting unit defined with reference to
several foreign currencies, at the date of the decision to
proceed with the issue, provided however that such maximum amount shall include all debt instruments for the
issuance of which the Board of Directors has been empowered by the present General Meeting.
8- Hereby resolves that the present empowerment of the
Board of Directors shall, in compliance with the provisions
of L 225-129 of the Code du Commerce, remain in force
for a period of twenty-six months.
The Board of Directors shall enjoy all powers, including that
of delegating same to its Chairman, subject to the condi-
4- Hereby resolves to cancel the preferential subscription
tions laid down in law, for the implementation of the present
rights for shareholders with respect to the securities to
authority, most notably for the purpose of determining the
be issued, it being understood that the Board of Directors
dates and terms governing issues, the form and characte-
may grant shareholders an entitlement to priority sub-
ristics of the securities involved, the governing prices and
FINANCIAL REPORT
Resolutions
conditions, the amounts to be issued, the subscription and
This maintenance of the powers conferred on Board of Directors
effective dates, even where retroactive, for the securities,
in the event of a public takeover bid involving the acquisition
the manner in which the issued shares or other securities
or exchange of Company stock, shall be valid as from the
are to be paid up, and where applicable to define the terms
date hereof and remain valid until the next Annual General
on which they may be redeemed on the stock market, and
Meeting of shareholders of the Company called to approve
generally to take all relevant steps and to enter into all and
the financial statements of the current financial year.
any agreements in furtherance of the due completion of the
planned issues, to place on record the increases in share
capital resulting from issues effected pursuant to the
NINTH RESOLUTION
powers conferred hereunder, and to make the correspon-
(Empowerment of the Board of Directors to issue stock in
ding amendments to the Bylaws of the Company. In addition,
connection with the Ubi Soft corporate savings plan)
the Board of Directors or its Chairman is empowered, where
applicable, to charge to the issue premium(s) all and any
costs, notably expenses, dues and fees, entailed by the due
completion of the issues concerned.
The General Meeting, having taken note of the report of the
Board of Directors and the special report of the Statutory
Auditors, hereby authorizes the Board of Directors, subject
to Article L 225-138 of the Code du Commerce, to increase
In the event of the issuance of debt securities, the Board of
the total amount of share capital on one or more occasions,
Directors shall enjoy all powers, including that of delegating
by issuance of shares payable in cash, the subscription of
same to its Chairman, notably to determine whether such
which shall be reserved for members of the salaried staff of
instruments are to be subordinated or not, to set their rate
the Company and affiliated companies under the conditions
of interest, their term, the repayment price, whether fixed
laid down in Article L 225-180 of the Code du Commerce,
or variable, with or without premium, the manner of their
where such employees are members of a corporate group
amortization in accordance with market conditions and the
savings plan.
terms on which such securities may grant entitlement to
The total number of shares which may be subscribed pursuant
to the present resolution on the date of the decision taken
9- Hereby resolves that the present empowerment shall
by the Board of Directors shall not exceed 2.5% of the total
cancel all and any prior authority given for the issuance,
amount of stock comprising the share capital of the Company.
whether immediate and/or deferred, of stock in the Company
The present resolution automatically entails shareholders'
with accompanying cancellation of preferential stock
relinquishment of preferential subscription rights to the
subscription rights and the power to grant periods for
subscription of the shares to be issued pursuant to the
priority subscription entitlement.
above authorization.
This authorization shall be valid for two (2) years from the
EIGHTH RESOLUTION
present General Meeting.
(Maintenance of authorizations for the issuance of securities
All necessary powers are hereby vested in the Board of
granting entitlement to stock in the Company in the event
Directors, including that of delegating same to its Chairman,
of a public takeover bid involving the acquisition or exchange
subject to the conditions laid down in law, for the following
of Company stock)
purposes:
■
directly by the employees in the savings plan, or sub-
scribed through a mutual investment fund;
Directors, and in accordance with the provisions of Article L
225-129 IV, hereby expressly resolves that the empowerment
to determine, in connection with each such increase in
share capital, whether the stock is to be subscribed
■
to determine all the terms and conditions governing the
of the Board under the sixth and seventh resolutions above
operations to be conducted, and notably the subscription
for the purpose of increasing the share capital of the
price for the new shares in accordance with Article
L. 443-5 of the Code du Travail;
Company shall remain in force in the event of the making of
a public takeover bid involving the acquisition or exchange of
■
to perform all and any procedures and formalities required
for the placing on public record of the increase(s) in
share capital effected under the present authorization,
to amend the Bylaws accordingly and more generally to
do all things relevant and necessary.
97
TENTH RESOLUTION
■
with regard to options for the purchase of stock: - the
(Empowerment of the Board of Directors to grant options for
price shall not be less than 80% of the average purchase
the subscription and/or purchase of stock)
price for shares held by Company under Articles L. 225208 and L. 225-209 of the Code du Commerce.
The price set for the subscription or purchase of stock may
Auditors, proceeding under the conditions of quorum and
not be modified during the term of the option, other than to
majority laid down for Extraordinary General Meetings, hereby
effect the adjustments which must be performed by the
authorizes the Board of Directors, pursuant to Articles
Board of Directors in the various cases specified in Article
L 225-177 et seq. of the Code du Commerce to grant, on
L. 225-181 of the Code du Commerce.
one or more occasions, to the employees and executives of
Such options cannot be granted by the Board of Directors:
the Company and affiliated companies, subject to the conditions
■
laid down in Article L. 225-180 of the Code du Commerce,
during the period defined by the ten trading sessions
preceding and following the date on which the consoli-
options granting entitlement to the subscription of stock in
dated financial statements, or failing these the annual
the Company (stock subscription options) and the purchase
company financial statements, are published;
of stock in the Company (stock purchase options):
■
■
to make use of the present authorization within a maximum
period of thirty-eight months from the date of the present
General Meeting;
■
during the period between the date on which the management of the Company becomes aware of information
which, if it were in the public domain, could have a significant impact on the market price for stock in the
to stipulate that the present authorization automatically
Company, and a date ten trading sessions after that on
entails, for the benefit of those granted subscription
which such information is effectively made public.
options, the express relinquishment by shareholders of
their preferential rights to the subscription of the shares
issued as and when the subscription options are exercised.
The General Meeting hereby grants all necessary powers to
the Board of Directors to set the maximum period for the
exercise of options, which shall not exceed ten (10) years
It is made clear however that the Board of Directors may
from the date of allocation, and the period from the date of
not grant options to the officers or employees of the
exercise of the option during which the stock must be retained
Company or affiliated companies subject to the conditions
by the beneficiaries, which shall not exceed three (3) years
laid down in Article L. 225-180 of the Code du Commerce,
from the date of exercise.
where they hold more than 10% of the total share capital,
in accordance with the provisions of Article L 225-182 of
In accordance with Article L 225-184 of the Code du Commerce,
the Code du Commerce.
the Board of Directors shall inform the shareholders each
year, in a report to the Annual General Meeting, of all opera-
The total number of new shares which may be subscribed or
tions conducted under the terms of the present resolution.
purchased by the beneficiaries of the options granted by the
Board of Directors shall not exceed 2.5% of the total
In the event that the options for the subscription and/or the
amount of stock comprising the share capital of the Company
purchase of stock are allocated to individuals domiciled or
at the date of allocation of such options by the Board and
resident abroad, or to individuals domiciled or resident in
prior to the inclusion of the shares possibly issued following
France but subject to foreign tax regimes, the Board may
the exercise of the stock subscription options granted,
amend the terms applicable to such subscription and/or
taking into account any adjustments which may be made.
purchase options in order to ensure that they comply with
the provisions of governing foreign law and ensure the most
The subscription or purchase price to be paid by beneficiaries
favorable tax treatment possible. To this end the Board
of the options shall be set by the Board of Directors on the
may, at its sole discretion, adopt one or more sub-plans for
date on which it grants such options, subject to the following:
each category of employees which are subject to foreign
■
98
with regard to options for the subscription of stock: -
law. Some of these options may, most notably, be intended
the price of subscription options shall not be less than
as Incentive Stock Options in the meaning of the United State
80% of the average opening price during the twenty trading
Internal Revenue Code and may be made subject to further
sessions preceding the day of the Board meeting at which
conditions compliant with the spirit of this type of plan in
such options are granted;
order to meet the requirements of this specific regime.
FINANCIAL REPORT
Resolutions
The increase in the share capital of the Company resulting
from the exercise of subscription options shall be deemed to
have been duly effected on the sole basis of the declaration
of exercise of the option, accompanied by the subscription
form and payment of the applicable amount either in cash or
by offset against debts due.
All necessary powers are hereby granted to the Board of
Directors for the performance of the required formalities
and to make the corresponding amendments to the Article
in the Bylaws specifying the amount of the Company's share
capital.
TWELFTH RESOLUTION
(Ratification of the amendment made to Article 2 of the
Bylaws regarding the principal place of business, following
its relocation as determined by the Board of Directors at its
meeting on January 2, 2002)
The General Meeting hereby ratifies the amendment made
to Article 2 of the Bylaws regarding the principal place of
business, following its relocation as determined by the Board
of Directors at its meeting on January 2, 2002.
THIRTEENTH RESOLUTION
(Vesting of powers for legal formalities)
ELEVENTH RESOLUTION
(Empowerment of the Board of Directors to reduce the
share capital of the Company by the cancellation of stock)
the bearer of a copy or extract of the minutes of the present
General Meeting for the purpose of carrying out all and any
filings or other formalities required by law.
Auditors, hereby authorizes the Board of Directors:
■
to cancel shares acquired under the authorization given
to it under the sixth resolution on the agenda for the
ordinary business of the Meeting, up to a limit equal to
10% of the total share capital in any period of twentyfour months, and to make corresponding reductions in
the share capital by charging to available premiums and
reserve funds the difference between the redemption
value of the cancelled stock and its nominal value;
■
to make such reductions, to place on record reductions
in share capital entailed by cancellations of stock authorized by the present resolution, to make corresponding
amendments to the Bylaws and, more generally, to
carry out all and any necessary formalities.
The present authorization is hereby given for a maximum
period of eighteen months.
99
6
GENERAL INFORMATION
6.1 General information on Ubi Soft
Entertainment S.A.
6.1.1 Company name and registered
office
■
the distribution of all kinds of multimedia and audiovisual
products, especially through new communication technologies such as networks and on-line services;
The Extraordinary General Meeting held on March 20, 1996
■
replaced the previous company name, Ubi Soft S.A., with Ubi
the purchase, sale and trading in general, in all its forms,
both import and export, through rental or otherwise, of any
Soft Entertainment S.A.
computer and word-processing hardware with their acces-
The Extraordinary General Meeting of February 15, 1999
sories, as well as any hardware or products for reproducing
transferred the registered office to 61, rue St Hélier in Rennes
sound and pictures;
(35000).
The business address of the company is 28, rue Armand Carrel
■
the marketing and management of all data processing and
word processing computer programs;
93100 Montreuil, France.
■
support, assistance and training relating to the abovementioned fields;
6.1.2 Legal status
■
A limited liability company governed by the Commercial Code.
the investment of the company in any operation which may
relate to its objects by creating new companies, subscribing
to or purchasing shares or corporate rights, by mergers
or by other means,
6.1.3 Jurisdiction
Company subject to French law.
■
and in general any operation related directly or indirectly
to the above objects or similar or related purposes likely to
promote the growth of the company.
6.1.4 Company founding
and expiration dates
6.1.6 Trade and Companies Register
The company was founded on March 28, 1986 for a term of
The company is registered in the Trade and Companies Register
99 years, expiring on April 9, 2085, unless it is extended or
under the number RENNES: B 335 186 094
wound up earlier.
APE code: 921 G
6.1.5 Objects of the company
(Article 3 of the Articles
of Association)
6.1.7 Location of legal documents
regarding the company
Ubi Soft Entertainment S.A. has the following objects in France
and minutes of General Meetings may be consulted at the
and abroad, directly and indirectly:
abovementioned registered business office.
■
The Articles of Association, financial statements and reports,
the creation, publishing and distribution of all kinds of
multimedia, audiovisual and computer products, especially
6.1.8 Accounting period
video games, educational and cultural software, cartoons
100
and literary, cinematographic and televisual works on any
The company’s accounting period starts on April 1 and ends
media, current or future;
on March 31 each year.
FINANCIAL REPORT
General Information
6.1.9 Statutory distribution
of profits (Article 17 of
the Articles of Association)
The income from the financial year, once operating expenses,
depreciation and provisions have been deducted, constitutes
the earnings. The following items are deducted from the profits
for the financial year after deducting losses carried forward
from pre-vious years where appropriate:
■
■
the sums to be allocated to reserves in accordance with
the law or the Articles of Association and, in particular,
at least 5% to make up the statutory reserve fund. This
allocation is no longer obligatory when the said fund reaches
an amount equal to one-tenth of the share capital. It is
resumed if for any reason the statutory reserve falls
below this fraction;
any amounts which the General Meeting, in response to a
proposal by the Board of Directors, deems necessary to
allocate to extraordinary or special reserves or to carry
forward.
The balance shall be distributed to the shareholders.
However, unless there is a reduction in capital, no distribution
may be made to shareholders where the equity capital is, or
would be if such distribution were to take place, less than
the amount of the capital plus the reserves, which by law or
under the terms of the Articles of Association, may not be
distributed.
The General Meeting may, in accordance with the provisions
of Article 351 of the Commercial Code (formerly Article 361
of Law no. 66-537 of July 24, 1966), grant each shareholder
the option of receiving all or part of the dividends to be
distributed or the interim dividends in cash or in the form of
shares.
6.1.10 General Meetings
(Article 14 of the Articles
of Association)
The General Meetings shall be held at the registered office
or at any other place specified in the calling notice.
They shall be chaired by the Chairman of the Board of Directors
or, failing this, by a director appointed for the purpose by the
General Meeting.
Every shareholder has the right, upon proof of his or her
identity, to take part in General Meetings by attending in
person, by returning a postal voting form, or by appointing a
proxy, subject to the following conditions:
■
holders of registered shares or voting rights certificates
must be registered by name in the company register;
■
holders of bearer shares must deposit, in the places specified
in the calling notice, a certificate issued by an authorized
intermediary to the effect that their shares held on the
accounts will be unavailable until the date of the Meeting.
These formalities shall be completed at least five days before
the Meeting.
Only individuals owning at least ten shares may attend
Ordinary General Meetings. Several shareholders may pool
their shares to meet this minimum requirement and be
represented by one of their number.
In all General Meetings, voting rights attached to shares
which include the right of usufruct shall be exercised by the
usufructuary.
Passing of threshold (Article 6 of the Articles of Association)
Any shareholder, acting alone or in concert, subject to the
thresholds covered by Article -7-1 paragraph 1 of the Commercial Code, who holds directly or indirectly at least 1% of
the company’s share capital or voting rights, or a multiple
of this percentage which shall be less than or equal to 4%,
shall be required to notify the company thereof in a letter
sent by recorded delivery within the period laid down in Article
L.233-7 (formerly Article 356-1 of the Law of July 24, 1966).
General Meetings shall consist of all the shareholders, with
the exception of the company itself, Ubi Soft Entertainment
S.A. They shall represent the totality of shareholders.
The notification required under the previous paragraph for
any passing of the threshold of a multiple of 1% of the capital
or voting rights is also required whenever such a share in
the capital or voting rights drops below the above-mentioned
threshold.
General Meetings shall be called and held in accordance with
the conditions set by the Commercial Code and by the
Companies Act of March 23, 1967.
Failure to report any such passing of both legal and statutory thresholds shall result in the withdrawal of voting
rights under the conditions laid down in Article L.233-14 of
101
the Commercial Code (formerly Article 356-4 of the Law of
July 24, 1966) if requested by one or more shareholders
who together hold at least 5% of the capital or voting rights
of the company.
Buyback program
A share buyback program was authorized by the combined
Ordinary and Extraordinary General Meeting of September
29, 2001. In accordance with Articles L 225-209 et seq.
of the Commercial Code the objectives of this program are,
in order of priority, to:
■
■
grant stock options to the employees and/or officers of
the company and/or its Group.
As part of this share buyback program, by August 1st, 2002
the company had acquired 858,141 of its own shares,
representing 4.941% of the share capital.
Consent clause
The Articles of Association of Ubi Soft Entertainment S.A.
do not contain any consent clause.
stabilize the company's stock price;
■
hold and dispose of the shares purchased;
■
deliver shares in payment or exchange for the purposes of
external growth;
6.2 General information on the capital
6.2.1 Share capital
As of March 31, 2002 the total share capital was € 5,384,306.92
representing a total of 17,368,732 shares of the same category,
each with a face value of € 0.31.
6.2.2 Conditions for amending
the capital and the respective
rights of the various categories
of shares (Articles 7 and 8
of the Articles of Association)
Each share shall give rights to ownership of a share of the
corporate assets and any liquidating dividends equal to the
proportion of the share capital which it represents.
Whenever it is necessary to own several shares in order
to exercise a right of any kind, especially in the event of the
exchanging, consolidation or allocation of shares, or following
an increase or reduction in share capital, whatever the procedures adopted, or a merger or any other transaction, holders
of shares which are fewer in number than that required may
only exercise their rights on condition that they arrange for
themselves to be part of a group, or for the purchase or
sale of the number of shares or rights which constitute the
necessary odd lots.
102
Voting rights which are double those conferred on other
shares based on the proportion of the corporate assets
which they represent shall be attributed to all fully paid-up
shares which are proved to have been registered for at least
two years in the name of the same shareholder.
In the event that the company assets are increased by the
incorporation of reserves, profits or issue premiums, this
right is also conferred, upon issue, on registered shares
awarded free of charge to a shareholder on the basis of old
shares by virtue of which he/she enjoys this right.
FINANCIAL REPORT
General information on the capital
6.2.3 Authorized unissued capital
a) At a meeting on September 29, 1997, the Board of Directors used the authorization granted by the combined Ordinary and
Extraordinary General Meeting of September 2, 1997 in order to issue convertible bonds without subscription right to a value of
M€ 15.275 (FF 100.2 million).
■ Chief characteristics of the first bond issue:
Issue price:
€ 91.47 (FF 600) per bond
October 10, 1997
Term of bond:
Annual yield:
2% per year, or € 1.83 (FF 12) per bond, payable on April 1 of each year starting
April 1, 1998
4.26% on October 10, 1997
Normal redemption:
redeemed in full by April 1, 2003 by redemption at a price of € 103.91
(FF 681.58), or 113.6% of the issue price
On March 31, 2002 the first bond is closed.
166,364 bonds were converted in the 2001-2002 financial year, with 40,075 bonds remaining to be converted.
636 bonds have been repaid early, from May 21 to August 20 2001.
b) The meeting of the Board of Directors of June 30, 1998 made use of the authorization from the Extraordinary General
Meeting of the same date to issue convertible bonds without subscription right to a value of M€ 51.83 (FF 340 million).
■ Chief characteristics of the second convertible bonds issue:
Issue price:
€ 164.64 (FF 1,080) per bond
As a consequence of the 5-for-
1 stock split, two bonds allow five shares to be subscribed with a face value of € 0.31
July 16, 1998
Term of bond:
7 years
Annual yield:
starting July 16, 1999
3.80% on July 16, 1998
Normal redemption:
redeemed in full by July 16, 2005 by redemption at a price of € 164.64
(FF 1,080) per bond, or 100% of the issue price
163,721 bonds were converted, 1,019 in the 2001-2002 financial year.
151,094 bonds remaining to be converted.
103
c) At its meeting on November 13, 2001, with the authorization granted by the Extraordinary General Meeting of
October 19, 2001 the Board of Directors agreed to issue bonds with the option of conversion into and/or exchange for
new or existing shares in the company to a total maximum value of about 172.5 million Euros.
■ Chief characteristics of the 1999 equity warrants:
Number and face value :
3,150,000 bonds with a face value of € 47.50
Issue price:
€ 47.50
Due date and settlement day :
November 30, 2001
Term of bond :
5 years
Annual yield:
2.50% per year, payable on November 30 of each year.
4.50% on November 30, 2001 (if there is no conversion and/or exchange of shares,
and if there is no accelerated amortization).
redeemed in full by November 30, 2006 by redemption at a price
of € 52.70 (FF 1,080) per bond, or 110.94% of the issue price.
€ Normal redemption:
€ As of March 31, 2002, no bond had been exercised.
d) During its meeting on October 19, 1999, the Board of Directors used the authorization granted by the combined
Ordinary and Extraordinary General Meeting held on 30 June 1998 to issue 372,058 shares with equity warrants to a value
of M€ 50.61 (FF 332 million).
■ Chief characteristics of the 1999 equity warrants:
Initial number of warrants:
372,058
Issue price:
€ 136 (FF 892.10)
Strike price:
€ 170 (FF 1115.13)
Strike period:
November 3, 1999 to November 2, 2002
Warrants not exercised by the end of this period will lose all value and be cancelled.
As of 03/31/02, 340,516 warrants remained to be exercised.
e) During its meeting on March 12, 2001, the Board of Directors used the authorization granted by the Extraordinary
General Meeting held on March 9, 2001 to issue 53,266 equity warrants with a face value of € 16,240.70 (FF 106,532).
■ Chief characteristics of the March 12, 2001 equity warrants:
53,266
Issue price:
€ 0.01
Strike price:
€ 40.29
Strike period:
from December 28, 2001 to March 11, 2006
As of March 31, 2002, no equity warrant had been exercised.
104
FINANCIAL REPORT
f) During its meeting on March 19, 2001, the Board of Directors used the authorization granted by the Extraordinary
General Meeting held on March 9, 2001 to issue 9,044 equity warrants with a face value of € 2803.64 (FF 18,088).
■ Chief characteristics of the March 19, 2001 equity warrants:
9,044
Issue price:
€ 0.01
Strike price:
€ 32.072
Strike period:
March 19, 2002 through March 18, 2006
As of March 31, 2002, no equity warrant had been exercised.
6.2.4 Securities which do not
represent the capital
■
grant employee stock options for 250,000 shares on
October 23rd, 1998,
Not applicable
■
December 8th, 2000,
■
April 9th, 2001,
■
grant Incentive Stock Options for 44,605 shares to the
employees of the American subsidiaries on October 25,
2001.
6.2.5 Identification of holders
of securities
Article 5 of the Articles of Association authorizes the company
to set up a procedure for identifying holders of its securities.
6.2.6 Potential capital
The Extraordinary General Meeting of June 15, 1996 and
the combined Ordinary and Extraordinary General Meeting of
September 2, 1997 authorized the Board of Directors to
grant stock options to employees of the Ubi Soft Group,
entitling them to subscribe for a total of no more than
1,000,000 shares with a face value of FF 2, giving a maximum
total increase in capital of FF 2 million in face value.
The Extraordinary General Meeting of September 13, 2000
authorized the Board of Directors to grant stock options to
employees of the Group, entitling them to subscribe for a
total number of shares not exceeding 2.5% of the total shares
comprising the company's share capital at the time the
authorization was used by the Board of Directors.
Using the authorizations granted by the Extraordinary
General Meeting of June 15, 1996, by the Extraordinary
portion of the Combined Ordinary and Extraordinary General
Meeting of September 2, 1997, and by the Extraordinary
portion of the Combined Ordinary and Extraordinary General
Meeting of September 13, 2000, the company's Board of
Directors resolved to:
■
June 15th, 1996,
■
April 22nd, 1997,
On March 31, 2002, 827,594 options entitling the grantees
to the same number of Ubi Soft shares were still unexercised.
6.2.7 Equity issue reserved
for employees
The extraordinary portion of the Combined Ordinary and
Extraordinary General Meeting of September 13, 2000,
authorized the Board of Directors to carry out a new UBI SOFT
ENTERTAINMENT equity issue reserved for employees of the
company and its French subsidiaries, to a maximum of 2.5%
of the total shares comprising the company's share capital
at the time the authorization was used, in particular by
means of a Company Investment Fund (hereafter referred to
as “FCPE”).
At its meeting on April 10, 2001, the Board of Directors
used the authorization granted by the Combined Ordinary
and Extraordinary General Meeting of September 13, 2000,
setting the subscription price of the shares to be issued at
26.72 Euros each, and specified that these shares would be
subscribed by the Ubi Actions Company Investment Fund.
The employees subscribed 47,007 shares via the Ubi
Actions FCPE. The Board of Directors took note of this equity
issue at its meeting on July 13, 2001.
105
1st Plan
2nd Plan
3rd Plan
4th Plan
5th Plan
6th Plan
Date of the General Meeting
06.15.96
09.02.97
09.02.97
09.13.00
09.13/00
10.25.01
Date of Board of Directors’ meeting
06.15.96
04.22.97
10.23.98
12.08.00
04.09/01
04.24.06
250,000
0
250,000
0
250,000
0
40,471
0
400,000
0
44,605
0
Start date for exercising options
06.15.97
04.22.01
10.23.02
12.08.01
04.09.02
04.25.02
Expiration date for options
06.15.01
04.22.02
10.23.03
12.08.05
04.09.06
04.24.06
FF 36
FF 79.40
FF 133.80
€ 38
€ 34.51
€ 34,51
25%
per year
/
/
25%
per year
25%
per year
25%
per year
56,431
148,457
2,180
0
0
0
0
0
0
0
0
0
97,795
244,725
40,471
400,000
SHARE SUBSCRIPTION OR
PURCHASE OPTIONS GRANTED
DURING THE FINANCIAL YEAR
Total number of options granted
including members of the executive committee
Option prices
Arrangements for exercising the options
PURCHASE OPTIONS EXERCISED
Total number of options exercised
as of March 31, 2002
PURCHASE OPTIONS CANCELLED
Total number of options cancelled
OPTIONS DE SOUSRIPTION
OU D’ACHAT D’ACTIONS RESTANTES
Total number of remaining options
106
44,605
FINANCIAL REPORT
Number
Expiry
date
Price
Plan no
SHARE SUBSCRIPTION OR PURCHASE OPTIONS GRANTED
Options granted to corporate officers
Options granted to the ten non-officer employees
with the highest number of options:
0
- 1 employee
18,000
04.09.06
€ 34.51
- 1 employee
13,500
04.29.06
€ 34.51
6
- 2 employees (information for each)
9,000
04.09.06
€ 34.51
5
- 1 employee
5,000
04.24.06
€ 34.51
6
- 1 employee
5,400
04.09.06
€ 34.51
5
4,500
04.09.06
€ 34.51
5
3,600
04.09.06
€ 34.51
5
5
SHARE SUBSCRIPTION OR PURCHASE OPTIONS EXERCISED
Shares subscribed for purchased per each corporate officer
exercising options held
0
Subscribed or purchased shares exercising the options held by each of the ten non-officer employees
with the highest number of purchased or subscribed shares:
- 1 employee
14,840
06.15.01
€ 5.49
1
- 1 employee
12,250
06.15.01
€ 5.49
1
- 1 employee
8,340
06.15.01
€ 5.49
1
6,000
04.22.02
€ 12.10
2
- 2 employees
2,505
06.15.01
€ 5.49
1
2,250
04.22.02
€ 12.10
2
107
6.2.8 Movements in share capital
Date
Nature of transaction
Number
of shares
Number
of shares
(cumulative)
Amount of increase
in capital
by cash
contribution
(in FF) *
03/1986
Formation of the company
Issue
premium
(in FF) *
Accumulated
amounts
in capital
(in FF) *
100
-
250,000
by
capitalization
(in FF) *
2,500
2,500
09/1990
Increase in share capital through
incorporation of reserves
22,500
25,000
2,250,000
100
-
2,500,000
09/1991
25,000
50,000
2,500,000
100
-
5,000,000
02/1993
30,000
80,000
3,000,000
100
-
8,000,000
01/1994
20,000
100,000
2,000,000
100
-
10,000,000
03/1996
50,000
150,000
5,000,000
100
-
15,000,000
03/1996
cash contributions
50,000
200,000
100
-
20,000,000
10
-
20,000,000
03/1996
Split of the FF100 security to FF 10
06/1996
Increase in share capital
through introduction
5,000,000
2,000,000
222,300
2,222,300
2,223,000
10
53,352,000
22,223,000
03/31/97
Increase in share capital following
exercise of subscription options
818
2,223,118
8,180
10
139,060
22,231,180
03/31/98
1,225
2,224,343
12,250
10
208,250
22,243,430
21,510
2,245,853
215,100
10
11,005,610
22,458,530
399,328
2,645,181
3,993,280
10
343,205,937
26,451,810
03/31/99
and conversion of bonds
11/03/99
Capital increase following issue
of shares with warrants, conversion
of stock options and conversion of bonds
01/17/00
5-for-1 stock split
01/17/00
Capital increase following
conversion of stock options,
bonds and warrants.
108
Share
face
value
(in FF) *
191,270
13,225,905
2
13,417,175
2
26,451,810
18,879,641
26,834,350
FINANCIAL REPORT
Movements in share capital (follows)
Date
Nature of transaction
Number
of shares
Number
of shares
(cumulative)
Amount of increase
in capital
by cash
contribution
(in FF) *
03/14/00
Capital increase following issue
of shares and conversion
of stock options, bonds
and warrants
Share
face
value
(in FF) *
Issue
premium
(in FF) *
Accumulated
amounts
in capital
(in FF) *
by
capitalization
(in FF) *
2,725,363
16,142,538
13,626,815
2
1,190,520,727
32,285,076
435,830
16,578,368
2,179,150
2
92,594,390
33,156,736
330,754
16,909,122
661,508
2
47,956,367
33,818,244
181,543
17,090,665
25,941,828
2
25,578,742
34,181,330
03/31/00
conversion of stock options,
bonds and warrants
04/11/01
conversion of stock options
and bonds and the exercising
of warrants
07/13/01
Equity issue reserved for employees
(PEE), conversion of stock options
and bonds, and exercising
of warrants
10/19/01
Conversion of share capital
into Euros (increase in face
value of share)
22/04/02
Equity issue as a result
of the conversion of stock options
and bonds and the exercising
of warrants
€ 87,195.98
278,067
17,368,732
€ 4,292,812.97
€ 0,31
€ 5,298,106.15
€ 0,31
€ 4,206,612.20 € 5,384,306.92
* On October 19, 2001 capital converted in Euro.
109
6.3 Distribution of capital and voting
rights as of August 1, 2002
Capital
Guillemot Brothers S.A.*
Claude Guillemot
Yves Guillemot
Michel Guillemot
Gérard Guillemot
Christian Guillemot
Other Guillemot family members
UBI Soft Entertainment S.A.
Gameloft S.A.
Public**
Total
Voting rights
Numbe
of shares
%
Number of
voting rights
%
1,915,227
147,772
204,671
164,674
164,666
132,006
40,875
858,141
301,933
13,437,767
17,368,732
11.027%
0.857%
1.178%
0.948%
0.948%
0.760%
0.235%
4.941%
1.738%
77.368%
100%
3,830,529
148,772
204,671
164,674
164,666
132,006
40,875
/
/
13,447,848
18,134,041
21.123%
0.820%
1.129%
0.908%
0.908%
0.728%
0.225%
/
/
74.159%
100%
* Guillemot Brothers S.A. (formerly Ubi Participations S.A.) took over Guillemot Participations S.A on July 22, 2002.
Ownership structure of Guillemot Brothers S.A. (oldly Ubi Participations S.A.).
Name
Number
of shares
%
Number
of voting
rights
%
Claude Guillemot
Yves Guillemot
Michel Guillemot
Gérard Guillemot
Christian Guillemot
Marcel Guillemot
Yvette Guillemot
17,674,320
17,674,320
17,674,320
17,674,320
17,674,320
311
311
20%
20%
20%
20%
20%
ns
ns
17,674,320
17,674,320
17,674,320
17,674,320
17,674,320
311
311
20%
20%
20%
20%
20%
ns
ns
Total
88,372,222
100%
88,372,222
100%
** the shares and voting rights held by the Group's employees represent a very small percentage.
The percentage of the capital held by the entities on the Board
of Directors is 4.691%.
The percentage of voting rights held by the entities on the Board
of Directors is 4.493%.
The change in ownership structure was caused by the various
equity issues, which resulted in a dilution of stock ownership, and
to the transfer of shares by the Guillemot brothers and Ubi
Participations, in particular as part of acquisitions.
110
On June 15, 2001, Guillemot Brothers S.A. acquired a double
voting right for the pure registered shares, which it had held
for two years.
There is no shareholder's pact between Guillemot Brothers,
Claude, Michel, Yves, Gérard, Christian, Marcel and Yvette
Guillemot, nor is there any agreement between the abovementioned shareholders and outside shareholders.
FINANCIAL REPORT
Information
The following shareholders held more than 1% of the share
capital:
Oppenheimer Funds Inc.
10,54%
Société Générale Asset Management
3,90%
Invesco Asset Management Ldt.
3,89%
Etoile Gestion
2,02%
Finama Asset Management
1,84%
AGF Asset Management
1,63%
Royal London Asset Management
1,49%
Ecureuil Gestion
1,20%
BNP PARIBAS Asset Management
1,05%
CIC gestion S.A.
1,03%
The voting right percentages are similar to the percentages
of the capital owned.
6.4 Changes in capital and voting
rights over the past three
financial years
03.31.99
Claude Guillemot
Michel Guillemot
Yves Guillemot
Gérard Guillemot
Christian Guillemot
Suzanne Guillemot
Nathalie Guillemot
Joëlle Guillemot
Yvette Guillemot
Total for Guillemot Family
Public and Group employees
Total
Capital
Voting rights
Number
of shares
%
Number
of voting
rights
%
235,399
237,799
235,395
237,799
235,449
2,400
2,400
2,400
2,400
1,191,441
1,054,412
2,245,853
10.481%
10.588%
10.481%
10.588%
10.484%
0.107%
0.107%
0.107%
0.107%
53.051%
46.949%
100%
465,141
469,941
465,137
469,941
460,191
4,800
4,800
4,800
4,800
2,349,551
1,056,687
3,406,238
13.657%
13.798%
13.657%
13.798%
13.510%
0.141%
0.141%
0.141%
0.141%
68.984%
31.016%
100%
111
03.31.99
Ubi Participations S.A.
Claude Guillemot
Michel Guillemot
Yves Guillemot
Gérard Guillemot
Christian Guillemot
Suzanne Guillemot
Nathalie Guillemot
Joëlle Guillemot
Yvette Guillemot
Total for Guillemot family
Total
Capital
%
Number
of voting
rights
%
4,206,263
152,045
152,024
152,044
152,036
152,280
12,000
12,000
12,000
12,000
5,014,692
11,563,676
16,578,368
25.371%
0.917%
0.917%
0.917%
0.917%
0.919%
0.072%
0.072%
0.072%
0.072%
30,246%
69,754%
100%
4,206,263
293,979
284,002
284,022
284,014
284,258
12,000
12,000
12,000
12,000
5,684,538
11,563,900
17,248,438
24.386%
1.704%
1.647%
1.647%
1.647%
1.648%
0.069%
0.069%
0.069%
0.069%
32.955%
67.045%
100%
08.09.01
(following acquisition of the double voting
right by UBI PARTICIPATIONS S.A
Ubi Participations S.A.
Claude Guillemot
Michel Guillemot
Yves Guillemot
Gérard Guillemot
Christian Guillemot
Other members of Guillemot Family
Total for Guillemot family
Ubi Ventures S.A.
Ludigames S.A.
Gameloft.com S.A.*
Total
* Gameloft S.A took over Ludigames S.A on March 29, 2002.
112
Voting rights
Number
of shares
Capital
Voting rights
Number
of shares
%
Number
of voting
rights
%
2,693,302
147,873
159,873
145,853
159,865
148,108
48,000
3,504,874
392,068
338,480
74,365
74,365
12,706,513
17,090,665
15.76%
0.87%
0.87%
0.94%
0.94%
0.87%
0.28%
20.51%
2.29%
1.98%
0.44%
0.44%
74.32%
100%
5,065,179
147,873
159,873
147,853
159,865
148,108
48,000
5,876,751
74.365
74.365
12.715.058
18.740.539
27.03%
0.79%
0.79%
0.85%
0.85%
0.79%
0.25%
31.358%
0.40%
0.40%
67.85%
100%
FINANCIAL REPORT
Information
6.5 Securities market
General information on the market for the issuers’ securities
■
Euroclear code: 5447 (Bloomberg : UBI.FP ; Reuters : UBIP.PA)
Listing market: Euronext-Paris - Premier Marché (Main Market)
■ Shares listed on 03/31/02: 17,368,732
■ Market capitalization on 03/28/02: 590 million Euros at the closing market price (€ 33.98).
■ Introduction price: FF 250 (€ 38.11) before the 5-for-1 stock split on january 17, 2000.
■
Month
Maximum price
(€)
Minimum price
(€)
Average price (1)
(€)
Trading volume
Traded capital
(€ million)
April 2001
46.90
32.39
38.04
580,976
22.995
May 2001
48.09
41.60
44.68
1,446,101
64.846
June 2001
45.98
37.10
41.42
993,085
40.215
July 2001
42.84
36.10
39.12
927,798
36.293
August 2001
47.25
39.25
41.96
2,161,650
92.779
September 2001
40.64
22.20
30.82
1,332,758
38.622
October 2001
37.80
26.50
33.00
1,469,570
49.158
November 2001
43.45
35.62
39.52
3,019,739
118.051
December 2001
41.80
35.65
38.31
1,586,511
62.249
January 2002
37.98
35.80
37.36
1,325,931
49.521
February 2002
39.97
29.46
33.06
2,685,186
88.479
March 2002
35.50
32.40
33.79
1,504,640
50.721
April 2002
31.92
31.04
31.48
1,829,034
57.311
May 2002
30.80
29.73
30.25
2,764,658
83.475
June 2002
25.29
23.54
24.41
2,508,602
55.815
July 2002
15.06
13.73
14.39
2,248,903
32.513
August 2002
15.54
14.51
15.02
1,618,505
24.218
Source: Euronext Paris
(1) Monthly average, weighted to reflect the trading volumes at the closing price.
6.6 Dividends
The society has paid no dividends for the last three financial years, and does not expect to pay any in the short to
medium term.
113
7
CORPORATE GOVERNANCE
7.1 Management
Chairman and CEO
Yves Guillemot
Vice-Presidents
Claude Guillemot
Michel Guillemot
Gérard Guillemot
Christian Guillemot
Name
Appointment
date
Yves Guillemot
Chairman and CEO
February 26, 1988
Claude Guillemot
January 9, 1996
Michel Guillemot
January 9, 1996
Gérard Guillemot
January 9, 1996
Christian Guillemot
January 9, 1996
Appointment renewal date
Renewal of mandate on September 29, 1989
Others informations on management:
114
Managing Director EMEA Territories:
Alain Corre
Managing Director for North American territories:
Laurent Detoc
Chief Financial Officer:
Alain Martinez
Managing Director International Production:
Christine Burgess-Quemard
Editor in Chief:
Serge Hascoet
FINANCIAL REPORT
Corporate governance
7.2 Board of Directors
Name
Appointment
date
Yves Guillemot
Director
Chairman of the Board
of Directors
Claude Guillemot
Director
Michel Guillemot
Director
Gérard Guillemot
Director
Christian Guillemot
Director
Yvette Guillemot
Director
February 28, 1988
February 28, 1988
February 28, 1988
February 28, 1988
February 28, 1988
January 25,1996
Appointment renewal
date
Appointment expiration
date
■
Ordinary General Meeting
of September 29, 1989
■
Ordinary General Meeting called
to vote on the financial statements
for the financial year ended
March 31, 2007
■
■
■
■
General Meeting of
September 29, 2001
■
■
■
■
■
■
■
■
■
■
The Board of Directors met about twenty times during FY01/02.
The Board of Directors as a whole have not been granted
options on the stock of the company or its tier-one or
tier-two subsidiaries.
March 31, 2007
March 31, 2007
March 31, 2007
March 31, 2007
March 31, 2007
No committees have been set up by the management team
or executive bodies.
115
7.3 Offices held by the directors
Mr Yves GUILLEMOT
Director and Chairman of the Board of Ubi Soft Entertainment S.A.
His term of office will expire at the Ordinary General Meeting
convened to vote on the financial statements for the year to
March 31, 2007.
OTHER FUNCTIONS:
Chairman and CEO
Ubi World S.A.
Ubi Soft Marketing & Communication S.A.
Ubi.com S.A.
Chairman
Ubi Soft Entertainment Norway A/S
Ubi Soft Entertainment (Swizerland)
Ubi Soft Entertainment OT (Finland)
GameBusters GmbH (Austria)
Ubi Soft Spa (Italy)
Ubi Soft S.A. (Spain)
Ubi Soft Entertainment Ldt. (Hong Kong)
Ubi Computer Software Beijing Company Ldt. (Beijing)
Ubi Soft Divertissements Inc. (Canada)
Ubi Soft Canada Inc. (Canada)
Ubi Soft Inc. (San Francisco)
UbiI Soft Holdings Inc. (San Francisco)
UBI. COM Inc. (San Francisco)
Red Storm Entertainment Inc.
Ubi STUDIOS KK (Japan)
Vice-Chairman
Shanghai UBI Computer Software Company Ltd.
116
Manager
Ubi Books & Records SARL
Ubi Pictures SARL
LUDIFACTORY SARL
Ubi Emea SARL
Ubi Research & Development SARL
Ubi Animation SARL
Ubi Color SARL
Ubi Graphics SARL
Ubi Networks SARL
Ubi Soft Entertainment SPRL (Belgium)
Ubi Soft Entertainment BV (Holland)
Ubi Soft Entertainment SARL (Morocco)
Managing Director
Ubi Soft Entertainment GmBH (Germany)
Ubi Soft Entertainment nordic A.S. (Denmark)
Ubi Studios Ltd. (great britain)
Ubi Soft Entertainment Ltd. (Great Britain)
Ubi Soft Pty Ltd. (Australia)
Ubi Soft Entertainment Sweden AB (Sweden)
Director
Ludigames France S.A.
Director and Vice-President
Gameloft.Com S.A.
Guillemot Corporation S.A.
Guillemot Brothers S.A.
FINANCIAL REPORT
Mr Gérard GUILLEMOT
Director and Vice-President of Ubi Soft Entertainment S.A.
convened to vote on the financial statements of the year to
March 31, 2007.
Chairman and CEO
Ludimedia S.A.
Chairman
Ubi Voices Inc. (San Francisco)
Ubi Music Publishing Inc. (Canada)
Ubi Music Inc. (Canada)
Ubi Soft Entertainment Inc. (New York)
Director
Ubi Studios S.A.
Ubi World S.A.
Ubi Soft Divertissements Canada (Canada)
Ubi Soft SpA (Italy)
Manager
Ludi Factory SARL
Managing Director
Ubi Soft Studios KK (Japan)
Shanghai Ubi Computer Software Company Ldt. (China)
Ubi Holdings Inc. (San Francisco)
Gameloft S.A.
Mr Michel GUILLEMOT
March 31, 2007.
Director and Chairman and CEO
Gameloft S.A.
Ubi Studios S.A.
Director
Ludimedia S.A.
Ubi World S.A.
UBI. COM S.A.
Ubi Soft SpA (Italy)
Ubi MUSIC Inc. (Canada)
Chairman and CEO
Manager
Ubi Studios SRL (Italy)
Ubi Studios SL (Spain)
Ubi Soft SRL (Romania)
Managing Director
Ubi Soft KK (Japan)
Shanghai Ubi Computer Software Company Ltd. (China)
Ubi Computer Software Beijing Company Ltd. (Beijing)
Ubi Soft Entertainment Ltd. (Hong Kong)
Chairman
117
Mr Claude GUILLEMOT
March 31, 2007.
Director
Ludimedia S.A.
Ubi Studios S.A.
Ubi World S.A.
Ubi Soft SpA (Italie)
Managing Director
Ubi Soft Entertainment Ltd. (Hong Kong)
Ubi Soft Entertainment Nordic A/S (Denmark)
Ubi Soft Entertainment Inc. (New York)
Ubi Studio Ltd. (Great Britain)
Chairman and CEO
Gameloft.Com S.A.
Mr Christian GUILLEMOT
March 31, 2007.
Director
Ludimedia S.A.
Ubi Studios S.A.
Ubi World S.A.
Ubi.Com S.A.
Ubi Soft SpA (Italie)
Managing Director
Ubi Soft Entertainment Nordic AS (Denmark)
Ubi Soft Entertainment Ldt. (Great Britain)
Ubi Soft Entertainment Norway A/S (Norway)
Ubi.Com Inc. (San Francisco)
Ubi Soft Entertainment NY Inc. (New York)
Gameloft S.A.
Director and Chairman and CEO
Mrs Yvette GUILLEMOT
Director of Ubi Soft Entertainment S.A. Her term of office
will expire at the Ordinary General Meeting convened to vote
on the financial statements of the year to March 31, 2007
Director
Ubi World S.A.
Managing Director
Shanghai Ubi Computer Software Company Ltd. (China)
118
FINANCIAL REPORT
7.4 Interests of Directors
Remuneration of directors and members of the Board
of Directors
Cf. table (section 3, page 67).
Stock purchase and subscription options
The Directors and the members of the Board of Directors do
not have any stock purchase or subscription options.
Information on transactions concluded with the members
of the executive and management bodies
Cf.Special statutory auditor’s report on regulated agreements
(section 4.3, page 88).
Loans and guarantees granted to or arranged for the
executive and management bodies
Not applicable.
119
8
PERSONS RESPONSIBLE
FOR THE REFERENCE DOCUMENT
AND STATUTORY AUDITORS
8.1 Person responsible for the reference
document
Yves Guillemot
Chairman and CEO
8.2 Declaration by the person responsible
for the reference document
To the best of my knowledge the data in this reference document correspond to the facts. They include all
the information investors need to assess the net worth, activity, financial position, results and prospects
for Ubi Soft Entertainment S.A.; there is no omission that would alter the conclusions.
Yves GUILLEMOT
120
FINANCIAL REPORT
Persons responsible for the reference document
8.3 Declaration
by the statutory auditors
In our capacity as statutory auditors of Ubi Soft Entertainment and in accordance with COB regulation
98-01, we have verified the information concerning the financial position and accounts given in this reference
document in accordance with current professional standards in France.
This reference document was drawn up under the responsibility of Mr Yves Guillemot, Chairman of the Board
of Directors. It is our responsibility to state an opinion on whether the information it contains presents an
accurate picture of the financial position and the accounts.
Our due diligence consisted of ensuring, in accordance with current professional standards in France, that
the information on the financial position and the accounts presents an accurate picture and verifying that it
agrees with the accounts that have already been the subject of a report. It was also our responsibility to
read other information contained in the reference document in order to identify any significant inconsistency
with information on the financial position in the accounts and to report any manifestly incorrect information
which came to light based on the general understanding of the company which we acquired in the course of
our work. In the case of isolated projections which resulted from formulated calculations, we took account
of the assumptions made by the directors and their conversion into numerical form.
The annual corporate and consolidated accounts for the financial years ending on March 31, 2000, 2001,and
2002 which were approved by the Board of Directors, were audited by us in accordance with current
professional standards in France. They are certified without reservation and without comment.
We have no comments to make regarding the accuracy of the information concerning the financial situation
and the accounts as set out in this reference document.
André METAYER
Benoît FLECHON
121
8.4 Name and address of statutory
auditors
Date of first
appointment
Expiration date of
current term
Incumbent:
André Métayer
Cabinet André Métayer
5, rue Marie Alizon
35000 Rennes
1986
2004
Alternate:
Pierre BORIE
15, rue Charles Le GOFFIC
35700 Rennes
1996
2004
1996
2007
1996
2007
Name
Incumbent:
Compagnie Consulaire d'Expertise Comptable Jean Delquié
Manager: Benoît Fléchon
84, boulevard de Reuilly
75012 Paris
Alternate
Jacques Le Dorze
90, rue de Châteaugiron
35000 Rennes
8.5 Information policy
PERSON RESPONSIBLE FOR INFORMATION:
Yves Guillemot
Chairman and CEO
28, rue Armand Carrel
93108 Montreuil-sous-Bois Cedex
Tel.: 01.48.18.50.00
www.ubisoft.com
8.6 Schedule of financial communications
for the 2002/2003 financial year:
Date
First quarter sales
Wednesday, October 30, 2002
Half-year earnings meeting
Thursday, December 12, 2002
Third quarter sales
Wednesday, February 5, 2003
Annual sales
FY meeting
122
Friday, August 2, 2002
Half-year sales
Wednesday, May 7, 2003
Wednesday, June 25, 2003
GLOSSARY
AAA (triple A): designation awarded to a video game when
MMO (massively multiplayer on line): term used to describe
it achieves a score of 95% in the trade press, and when it has
sold more than a million units worldwide.
"massively multiplayer online" games that can be played via
an Internet connection, the special feature being that the
game never stops.
Blockbuster: game which is a high success sale and/or is at
the top of the sales charts.
N64 (Nintendo 64): 64-bit game console designed by
CD-Rom: abbreviation of Compact Disc Read Only Memory. A
Nintendo in 1995 as part of the “new generation” (64-bit
consoles).
computer medium with a compact optical disc format used to
store 650 MB of multimedia data and read by a laser beam.
Game console: dedicated game computer without keyboard.
Their specialization means that they are generally highperformance machines. Third-generation consoles with 128bit processors appeared in 2000. They can be connected to
the Internet for online playing and are equipped with DVD
drives.
Dreamcast: Sega game console. It has a 128-bit processor
and was the first console with a built-in 56 KB modem for
online play (via the Internet).
Engine: a software kernel which cannot function without a
more or less independent front end. This is the heart of the
system, which allows all the animations, graphics and sound to
function and be used, and ensures the software’s interactivity.
GameBoy®: Nintendo handheld console. This was the first on
the market, and years later it is still around, with its 8-bit
processor and its small black-and-white screen. It has since
been produced with a color screen, Game Boy Color (GBC). More
than 100 million of these handheld consoles have been sold.
Pay to play: system which allows gamers to play on line by
paying a subscription (the most monthly). The system,
therefore, don’t avoid the purchase of the game.
Platform: a unit consisting of an operating system and hard-
ware. This may be a console or a PC.
Player matching: operation in which gamers are brought
together to play the same game online.
PlayStation®: Sony’s 32-bit game console, also called PSX,
which came out in 1995. It uses CDs for games (unlike
cartridge consoles).
PlayStation®2: Sony game console which replaced the
PlayStation. It was launched in Japan in November 1998 and
in October and November 2000 in the United States and
Europe respectively. It is based on a 128-bit processor
called the “Emotion Engine” and a DVD-ROM drive.
Porting: the action of porting a program, in other words
adapting an application to a system different to that on
which the program was originally developed (and for which it
was designed), from one environment to another.
GameBoy® Advance: new Nintendo handheld console with a
32-bit processor. It hit the market in March 2001 in Japan,
and 700,000 units were sold in the first week. Sales in the
United States and Europe began in June 2001.
Production: period during which the software is developed
GameCube™: new Nintendo console which will hit the market
XboxTM: Microsoft’s game console, equipped with a 128-bit
in September 2001 in Japan, November in the United States
and March 2002 in Europe. It is targeted at 12 to 18 yearolds and will be compatible with GameBoy®Advance.
processor. Launch is scheduled for November 2001 in the
United States and spring 2002 in Japan and Europe.
(animation of characters, integration of data into the engine,
etc).
Game play: the features included a game (scenarios, riddles,
actions) to make it sufficiently interesting but not so difficult as to discourage the player.
Hit: highly successful video game, with sales of several hundred
thousand units.
Localization: linguistic and cultural adaptation of software
for a foreign country.
Sources: Sciences-en-Ligne “Editions de l'Analogie”, a scientific and technological terminology glossary based on the “Dictionnaire interactif des Sciences et
Techniques” by P and J ROBERT. (www.sciences-en-ligne.com) - Le Jargon Français v 3.2.119, by Roland Trique (www.linux-France.org/prj/jargonf.) Ubi Soft Entertainment, 2002.
123
TABLE OF CONCORDANCE
This document has been prepared in accordance with Regulation
98-01 of the Commission des Opérations de Bourse, which
specifies the information to be disclosed on admission to a
regulated market for financial instruments and when issuing
Headings of the application instruction in COB regulation 98-01
Company Report
2001/2002
Page
Section 1
PERSONS RESPONSIBLE
FOR THE COMPANY REPORT AND STATUTORY AUDITORS
Section 8
120
1.1
1.2
1.3
1.4
1.5
Person responsible for the Company Report
Declaration by the person responsible for the Company Report
Name and address of statutory auditors
Declaration by the statutory auditors
Information policy
8.1
8.2
8.4
8.3
8.5
120
120
122
121
122
Section 2
SECURITIES ISSUES
Not applicable
Section 3
UBI SOFT ENTERTAINMENT AND ITS CAPITAL
Section 6
100
3.1
3.2
3.3
3.4
3.5
3.6
General information on Ubi Soft Entertainment S.A.
Distribution of capital and voting rights
Changes in capital and voting rights over the past three financial years
Securities market
Proposed resolutions submitted for approval to the combined Ordinary
and Extraordinary General Meeting on 12 Sept 02
6.1
6.2
6.3
6.4
6.5
Section 5
100
102
110
111
113
91
Section 4
ACTIVITIES OF UBI SOFT ENTERTAINMENT S.A.
Section 1
Section 2
28
30
4.1
The Company and the Group
Activity in 2001/2002
Personnel
Other information on the Company
Protection of trademarks
Dependence of Ubi Soft Entertainment on particular contracts - Main
customers
Litigation
Commitments
Investment policy
Research policy
Section 1
Section 2
2.4
2.6
2.6.1
2.6.5
2.6.4
2.6.6
28
30
36
38
38
39
39
40
2.6.2
2.6.3
39
39
Section 5
5.1
5.2
ASSETS - FINANCIAL SITUATION - RESULTS
Corporate accounts
Section 3
3.1
3.2
43
43
68
Section 6
BOARD OF DIRECTORS AND MANAGEMENT TEAM
OF THE UBI SOFT ENTERTAINMENT GROUP
Section 7
114
Section 7
RECENT DEVELOPMENTS AND OUTLOOK
7.1
Recent developments
2.7
41
7.2
Outlook and strategy
2.8
42
4.2
4.3
124
financial instruments for which admission to trading on a
regulated market is requested, and in accordance with the
application instruction issued pursuant to this regulation.
/

RAPPORT ANNUEL 2002 1

Transcription

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