Ubisoft 2009 Annual Report Download - page 36

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were no longer capable of retaining or motivating its key employees, the Company’s growth prospects and
financial position could be affected.
The Company follows an active policy of recruitment, training and retention through the following initiatives in
particular:
• Opening of new studios (Toronto) and acquisition of existing studios (Nadéo in Paris),
• Company/university collaboration: strong relationships with the main universities in the various
countries where the Group operates,
• The addition of tools and forums to encourage skills sharing,
• Implementation of various high-level training programs for core production activities.
All of the programs established by Human Resources at a local and international level are first and foremost
designed to attract, train, retain and motivate employees with strong technical and/or managerial skills:
development opportunities, share purchase plans, stock option plans, personal development plans, etc. As
proof of the effectiveness of these practices, the Group received the Top Employeur France 2010 seal,
which is awarded each year by the institute CRF, which specializes in research into best managerial
practice.
1.1.7.1.5 Risks associated with the acquisition and integration of new entities
The Company has an international expansion policy, regularly reflected in the opening and acquisition of
production studios in new territories. The integration of these studios is critical for the Company’s success in
order to meet future growth targets.
In order to ensure that these new entities are integrated successfully, the Company has put in place a
number of solutions to support the teams. Similarly, the Company continues to develop the skills of its
administrative teams in order to limit financial, tax or legal risks.
A sound financial structure for the company with regard to the net financial surplus and the available equity is
expected to minimize these risks.
Nevertheless, the following risks could arise:
• dilution of the current shareholder structure as a result of an acquisition paid in shares;
• creation of significant long-term debt;
• potential losses that could have a negative impact on profitability;
• provisioning for goodwill or other intangible assets.
The potential loss of key employees at the target company could have a negative impact on financial
performance. However, to date, Ubisoft has always proven capable of integrating acquired companies into
the Group.
1.1.7.2 Legal risks
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1.1.7.2.1 Lawsuits – Legal proceedings and arbitration
There are no government, legal or arbitration proceedings, including any case of which the Company is
aware, that are pending or with which it is threatened, that are likely to have or that over the past 12 months
have had a material impact on the financial position or profitability of the Company and/or the Group.
The Group is subject to regular tax inspections in the countries where it is present.
1.1.7.2.2 Regulatory environment
The Company, like all games publishers, must comply with numerous national regulations, relating in
particular to the suitability of games for the target consumers, information given to consumers about the
content of games (in accordance with the age rating classifications of PEGI in Europe and ESRB in the