In 2002, the video game market experienced another year of sustained growth in North America and Europe thanks to the success of 128-bit consoles. The installed base for these consoles jumped from 15 million units in 2001 to 38 million units in 2002 and is likely to expand to over 67 million units in 2003.

UBISOFT in a dynamic

market

installed base US

million units
Ubisoft in the limelight in 2002 Europe

5.3 11.6 1.3 1.4

Sony PlayStation2 Nintendo GameCube Microsoft Xbox 7.4 1.2 1.4

15.9 3.6 4.6

The Group confirmed its position as a major industry player thanks to numerous successes, including Tom Clancys Splinter Cell, Rayman3: Hoodlum Havoc and Tom Clancys Ghost Recon each of which dominated their respective segments. For the fiscal year 2003/04, Ubisoft continues to reinforce

Total 128 bits

GameBoy Advance
Expansion of the 128-bit installed base was the main catalyst for growth in 2002. The overall video game market grew by 14% in the United States and 12% in Europe in 2002.
its presence in the segments it has already penetrated, and is moving into two new areas of the market:

Action/adventure

games (24%* of the total market),
with the launch of Beyond Good & Evil and Prince of
Game software market US Europe

million $

Persia The Sands of Time

million

First-person shooter games (7%* of

with Far Cry and XIII

the total market),
Sony PlayStation2 Nintendo GameCube Microsoft Xbox 168 231

600 773

291 302

354 682

Ubisoft forecasts a 15% increase in the game software market for the European and North American zones combined in 2003 (barring exchange rate fluctuations). This solid growth will be driven by video game sales on 128-bit consoles and handhelds.
An astonishingly fast start-up for online console games
Launched in the United States in November 2002, Xbox Live sold nearly 500,000 units in just eight months (Source: Microsoft). Xbox Live gamers devote an average of 2.5 hours to gaming each day. The online version of PlayStation2, launched in August 2002 in the United States, has also met with very dynamic growth: 800.000 units were sold in less than a years time (Source: Sony). The multiplayer mode has long been one of the main attractions of video games. It first allowed several gamers to play together on a single console and led to the creation of LAN video game cafes. The Internet now makes remote access to multiplayer console games possible a technological development that has tremendously increased the potential of games, giving them a whole new dimension.

Sales in the North America region were 183 million for the year, and accounted for 41% of Group sales. Over the fiscal year, the region posted an increase of 35% at current exchange rates and 52% at constant rates.
The Europe region accounted for 55% of annual sales, at 250 million (up 20%), with Spain and the United Kingdom showing the greatest increases.
1.3.6 Sales and Earnings of Main Subsidiaries
Subsidiarie (thousand euros) Ubi Soft Inc. (United States) Ubi Soft Entertainment GmbH (Germany) Ubi Soft Entertainment Ltd (United Kingdom) Consolidated Sales 03/31/2003 167,182 45,342 57,387 Net Income 03/31/2003 10,991 -1,974 2,470 Consolidated Sales 03/31/2002 135,441 43,891 40,935 Net Income 03/31/2002 8,721 1,419 -425 Consolidated Sales 03/31/2001 62,385 28,655 33,077 Net Income 03/31/2001 -6,994 2,038 404
1.3.7 Change in Income Statement
Ubisoft achieved all the objectives it had set during the fiscal year: sales (17% to 22% growth at constant exchange rates), operating income (35 to 40 million euros according to French accounting standards and 29 to 34 million euros according to US GAAP pro forma) and net indebtedness (170 million euros). Sales increased by 30% at constant exchange rates (and by 23% at current exchange rates) thanks to the success of the blockbusters launched during the year. Gross margin increased by 28%, from 217.1 to 277.3 million. This represents 61% of sales (vs. 59% for fiscal year 2001/02) and resulted from a higher percentage of sales on 128-bit consoles (62% in 2002/03 compared with 19% in 2001/02) and a sharp increase in the average per-game sales volume.
The net financial results break down as follows:
11.4 million in financial expenses, an 18.7% increase over 2001/02 resulting from higher activity in the second half of FY 2002/03; 1.2 million in foreign exchange losses due to increased activity in North America at the end of the fiscal year, at a time when the dollar was at its lowest level in relation to the euro.
Net non-recurring income and expenditure of 6.8 million was primarily the result of:
a provision of 22.9 million on Ubisoft shares directly held by the company (1,169,733 securities accounted for at 10.64 per share as of 03/31/2003); a profit on the buy-back of convertible bonds (OCEANE 2006) totaling 20.7 million (1,200,699 securities redeemed during the 2002/03 fiscal year); exceptional amortization of development expenses for discontinued products totaling 5.4 million according to French accounting standards and 3.9 million euros according to the US GAAP pro forma standard (including 3.5 million related to acquisitions); gains from lawsuits totaling 2.4 million related to acquisitions.

Ubisoft announces that Tom Clancys Splinter Cell for PlayStation2 is the best-selling game in Germany, France and Great Britain Ubisoft presents seven high-potential titles at E3 2003, the international video game trade show: Beyond Good and Evil, Far Cry, Prince of Persia The Sands of Time, Tom Clancys Rainbow Six3, Uru: Ages Beyond Myst, XIII and Tom Clancys Ghost Recon: Island Thunder Allotment free of charge of stock purchase warrants (SPW) on the basis of one SPW offered for one Ubisoft share

May 2003

Signing of a co-publishing agreement with Warner Bros studios for the launch of Matrix Online in the summer of 2004 IGN.com bestows awards on the Ubisoft games presented at E3: Four awards for Prince of Persia The Sands of Time including the award for the best game on PlayStation2; five nominations for Beyond Good and Evil, and Matrix Online is voted the most innovative game

June 2003

Signing of a publishing agreement with Sony Online Entertainment for EverQuest II and Lords of EverQuest in Europe
a new drop in prices of approximately 25% on average for 128-bit consoles, which should result in an increase in the installed base for these consoles on the order of 67 million units by the end of the year;
a volume effect related to the expansion of the installed base of 128-bit consoles and portable consoles (supported by the launch of GBA SP in early 2003). With regard to publishers, the trend toward consolidation that began approximately 10 years ago, most notably in the form of merger-acquisitions with the likes of Broderbund, Sierra, Cendant, GT Interactive, TLC, Time-Warner Interactive and BMG Interactive, continued in 2002. The focus, however, was on the acquisition of studios by publishers (Rare Software was acquired by Microsoft, Z-Axis Ltd. and Luxoflux Corporation were acquired by Activision, ValuSoft, Inc. and Rainbow Multimedia Group, Inc by THQ, etc.). These transactions also resulted in the disappearance of some market participants, primarily the smaller developers, though publishers such as Cryo Interactive and 3DO were also affected. Furthermore, certain publishers are experiencing difficult financial situations or having difficulty financing the investments required for their development. As a result, only a small group of market players has been able to maintain a high level of quality and innovation: Activision, Electronic Arts, Take Two, THQ, Atari and Ubisoft. Despite this, the market remains highly fragmented. In the United States, the top 10 publishers (non-manufacturers) control only 62% of the market. This trend toward consolidation is expected to continue in the sector in the years ahead.

604 (57,851) 120

166,550 (56,671) 141 2,087 3,1,(601) 116,55,260

(57,247) 1,(1,233)

Increase in issue premium on shares with warrants increase in issue premium on group savings plan Grants received
Repayment of shareholders' current accounts (1,233) Other flows Total cash flow from financial transactions Impact of conversion rate adjustments Net change in cash flow (56,970) (3,311) (59,915)
Total cash flow from financial transactions Impact of conversion rate adjustments Net change in cash flow Net cash position at the beginning of the financial year Net cash position at the end of the financial year
(56,970) (3,311) (59,915)
Net cash position at the beginning of the financial year 37,623 Net cash position at the end of the financial year (22,292)

(17,637) 37,623 256

37,623 (22,292) 256
including cash position of companies acquired and sold
* including write-back of negative goodwill of Studios Ltd: K 165
2.1.4 Explanatory Notes on the Consolidated Accounts
Highlights of the fiscal year
In the course of the fiscal year, Ubi Soft Entertainment S.A. absorbed its subsidiaries Ubi Marketing Research SARL and Ubi Soft Edutainment SA, of which it owned 100%. The companies Ubi Administration SARL, Ubi Animation SARL, Ubi Color SARL, and Ubi Info Design SARL were dissolved without being liquidated (the first on February 28, 2003 and the others on January 31, 2003). The legal status of the companies Ludimedia SA, Ubi Studios SA, Ubi Soft France SA, and Ubi World SA was changed to Socit Anonyme Simplifie (SAS). Ubisoft Entertainment SA turned its distribution division in France over to its subsidiary, Ubi Soft France SA, and transferred its EMEA-area production and distribution division (excluding France) to its subsidiary, Ubi EMEA SARL. During the fiscal year, Ubi Soft Entertainment SA transferred shares of Students Life (17.88 %), Financire Yaccom (12 %), and Ludopia Interactive (18,45 %) to Guillemot Brothers SA, in exchange for shares in Gameloft SA. It also contributed 100% of its shares in Sinister Games Inc, Ubi Soft Inc and Ubi.com Inc to its subsidiary Ubi Soft Holdings Inc. As of April 1, 2002, Ubisoft Entertainment SA and its subsidiaries Ubi Soft France SAS and Ubi EMEA SARL, form a group subject to the fiscal integration regime. During the fiscal year, Ubi Soft Entertainment SA bought back 1,200,699 convertible/exchangeable bonds (OCEANE) at an average price of 30.25. As of March 31, 2003, Ubi Soft Entertainment SA held 1,169,733 of its own shares acquired for an aggregate value of 35,394,000. A provision was established on the basis of the average monthly price for March 2003 of 10.64, or an aggregate provision of 22,948,000.

New companies consolidated as of March 31, 2003: date consolidated: April 2002 acquisition date: April 2002 acquisition date: March 2002
UBI SOFT SRL Ubi Soft Entertainment Finland OY Ubi Soft Entertainment SA (Switzerland)
Mergers realized during the fiscal year:
Ubi Soft Entertainment SA took over Ubi Soft Edutainment SA and Marketing Research SARL on May 31, 2002 Ubi Simulations SARL took over Ubi Color SARL on January 31, 2003 Ubi Game Design SARL took over Ubi Info Design SARL on January 31, 2003 Ubi Graphics SARL took over Ubi Animation SARL on January 31, 2003 Ubi Books and Records took over Ubi Administration SARL on February 28, 2003
Deconsolidated companies as of April 1, 2002: in the process of liquidation in the process of liquidation in the process of liquidation below materiality thresholds dissolved dissolved
Ubi Voices Inc Ubi Soft Entertainment Inc Ubi Studios Ltd Ubi Music Publishing Inc Ubi Studios KK Ubi Soft Publishing OEM Inc
2.1.4.3 Notes on the Balance Sheet I. Goodwill, business assets, trademarks

a. Goodwill

Goodwill breaks down as follows as of March 31, 2003:
Acquired company Ubi Studios SAS Ubi Pictures SARL. Ubi Soft Inc Ubi Soft Entertainment Ltd Ubi Soft Entertainment GmbH Ubi Soft Holdings Inc Sinister Games Inc. 3D Planet SPA Blue Byte Software Ltd. Blue Byte Software GmbH CO.KG Blue Byte Software Inc Red Storm Entertainment Ubi Soft Canada Inc TOTAL Acquisition date 02.02.96 02.02.96 02.02.96 12.31.94 08.01.95 09.28.00 03.31.00 09.30.00 02.06.01 02.06.01 02.06.01 09.28.00 10.02.00 On 03.31.02 Gross 6,443 3,852 1,082 7,155 13,174 34,67,503 Increase 55 1,1,902 Decrease On 03.31.03 Gross 5,967 3,852 1,137 8,171 14,005 34,68,929
The increase in goodwill is the result of a supplement to the acquisition price for the Blue Byte companies.
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.

Acquired company

On 03.31.02 Depreciation 768 2,4,959
Appropriation Adjustment difference 703 1,3,448 -
On 03.31.03 Depreciation 1,471 4,8,407
Ubi Studios SAS Ubi Pictures SARL Ubi Soft Inc Ubi Soft Entertainment Ltd Ubi Soft Entertainment GmbH Ubi Soft Holdings Inc Sinister Games Inc. 3D Planet SPA Blue Byte Software Ltd Blue Byte Software GmbH CO.KG Blue Byte Software Inc Red Storm Entertainment Ubi Soft Canada Inc TOTAL
Goodwill is amortized over 20 years.

b. Business assets

Business assets break down as follows as of March 31, 2003:

Business assets

On 03.31.02 Gross 11,342 16,309 6,810 1,556 1,1,524 2,028 41,222

Increase -

Decrease -
Adjustment difference 543* (543)* 11 11
On 03.31.03 Gross 11,885 15,766 6,810 1,556 1,1,524 2,028 41,233

France United States Germany Belgium Netherlands Austria Switzerland Canada TOTAL
*The adjustment of K 543 is related to an incorrect allocation of acquisition costs on March 31, 2002.
On 03.31.02 Depreciation 2,021

Increase 2,064

difference -
On 03.31.03 Depreciation 1,188 1,202 4,085
Business assets are amortized over 20 years using the straight-line method.
c. Trademarks and patents
Trademarks and patents break down as follows:
On 03.31.02 Gross Trademarks and patents Total 10,369 10,369 Increase Decrease On 03.31.03 Gross 10,701 10,701

3,533 3,533

3,201 3,201
On 03.31.02 Depreciation Trademarks and patents Total 144 144

Increase

Decrease
On 03.31.03 Depreciation 171 171

II. Intangible assets

Software breaks down as follows as of March 31, 2003:
Intangible assets On 03.31.02 Gross 158,249 14,594 80,440 14,797 5,827 2,276,325 Adjustment Change in difference consolidation 2,007 (1,961) (69) (23) 34(5) 34 On 03.31.03 Gross 182,602 23,108 70,526 9,718 1,479 10,836 2,301,025
Increase 143,531(1) 15,233(2) 70,469(3) 3,376(4) 1,479 3,715 2,395 240,198
Decrease 119,178 6,719 80,383 8,215,509
Released software programs* External developments Software programs in progress Software tools Localization software Office software Other intangible assets in progress Others TOTAL
(1) including K 73,053 for account to account reclassification (2) including K 5,250 for account to account reclassification (3) including K 70,469 for account to account reclassification (4) including K 2,080 for account to account reclassification (5) due to Ubi Romania This gives a net increase from mergers and account to account reclassification of K 89,346. *Software that has been released or is in production also includes 1.1 million in external developments.
Reclassifications are from account 232 (intangible assets in progress) to accounts 208.
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 in progress as of March 31, 2003; software tools: these consist of a set of complex development programs that are used for a number of products.

Nature

Number

Av. price 30.2583

Gross value K 35,394

Closing price 10.64

Provision K 22,948

Net value K 12,446

Percentage of capital 6.67%

Own shares

1,169,733
Funds invested in UCITS break down as follows:
03.31.03 Centrale Montaire Centrale Pibor Total 11,765 11,765 03.31.02 1,999 19,827 21,826

X. Cash

The Cash account showed a balance of cash and bank accounts in the amount of K 97,905 on March 31, 2003, compared with on K 30,548 on March 31, 2002.

XI. Share capital

Capital
On March 31, 2003, Ubi Soft Entertainment S.A.'s capital consisted of 17,540,082 shares with a face value of 0.31 each, i.e. 5,437,425.25. Maximum number of shares that may be created: 4,310,780 q by bond conversion: 2,704,771 q by exercise of stock options: 1,552,743 q by exercise of warrants: 53,266

Changes in share capital

Capital Premiums Consolidated reserves and conversion adjustments 24,943 (87) 3,7,063 (3,619) Income: Grants received Total share capital
Situation at March 31, 2001 Conversion of capital into euros Appropriation of Consolidated Earnings N-1 Change in capital of consolidating company Consolidated earnings (Group share) Change in conversion adjustments Grants received Situation at March 31, 2002 Allocation of Consolidated Earnings N-1 Change in capital of consolidating company Consolidated earnings (Group share) Change in conversion adjustments Reclassification of merger premiums Grants received Situation at March 31, 2003

5,156 87

259,343

293,234 7,204

7,133 5,384 266,406 29,006 7,1,338 7,953 (7,953) 306

7,133 309,055 1,391

4,854 (10,259) 1,210 (1,210) (213) 5,437 268,954 25,490 4,854 93
4,854 (10,259) (213) 304,828
Number of Ubi Soft Entertainment SA shares
As of 04/01/02 Exercised options Share subscription warrants exercised Shares subscribed in Company Savings Plan As of 03/31/03 17,368,732 34,137,115 17,540,082

Stock purchase warrants

November 3, 1999 stock purchase warrants Initial number of warrants: 372,058, with two warrants required to purchase a share at a face value of 1.52 (FF 10) As a consequence of the 5-for-1 stock split, two warrants allow five shares to be subscribed with a face value of 0.31 Issue price: 136 (FF 892.10) Strike period: November 3, 1999 through November 2, 2002 Strike price: 170 (FF 1,115.13). As of April 1, 2002, 340,516 warrants had still not been exercised. 24 warrants were exercised during the fiscal period and warrants not exercised before the end of the period were cancelled March 12, 2001 stock purchase warrants Number and face value: 53,266, with one warrant needed to subscribe a share at a face value of 0.31 (FF 2) Issue price: 0.01(FF 0.07) Strike period: December 28, 2001 to March 11, 2006 Strike price: 40.288 (FF 264.27) As of March 31, 2003, no warrants had been exercised. March 19, 2001 stock purchase warrants Number and face value: 9,044, with one warrant needed to subscribe a share at a face value of 0.31 (FF 2) Issue price: 0.01(FF 0.07) Strike period: March 19, 2002 to March 18, 2006 Strike price: 32.072 (FF 210.38) These warrants were cancelled.

XIII. Financial debt

Financial debt breaks down as follows:
03.31.03 Bond debentures Borrowings from credit institutions Accrued interest Advances in foreign currencies Syndicated loans Bank overdrafts Borrowings resulting from restatement of leases Miscellaneous financial debt Advances by the State Financial Debts 127,605 2,240 20,877 65,000 78,565 2,193 2,914 299,394 < 1 an Maturities outstanding on 03/31/03 105,673 03.31.02 190,2,118 18,799 14,492 2,228,897 > 1 year and < 5 years 193,721 > 5 years -
The Group's fixed rate, variable rate and non-remunerated debt amounted to K 131,239, K 165,241 K 2,914 respectively. Miscellaneous financial debt in the amount of K 2,914 represents foreign exchange hedges in GBP and AUD on behalf of Ubi EMEA SARL. Advances in foreign currency of K 20,877 represent foreign exchange hedges in USD, CAD and GBP Short-term lines of credit amount to 62.58 million; they are unconfirmed and revocable with 30 days prior notice.
The syndicated loan of 65 million is confirmed credit.
Under the terms of the syndicated loan and in the case of bilateral lines of credit, the Company is required to respect certain financial ratios (i.e. "covenants"). The following covenants must be respected with regard to the syndicated loan: Net debt / shareholders' equity Net debt / cash flow from operations Free cash flow excluding acquisitions / sales
The covenants on bilateral lines primarily concern net debt / shareholders' equity and net debt / cash flow from operations. As of March 31, the Company was in compliance with all ratios and expects to remain in compliance over FY 2003/04.
At the close of FY 2002/03, net borrowings were K 177,278.
03.31.03 Financial debt excluding government advances Cash Investment securities Net borrowings 299,394 (97,905) (24,211) 177,278 03.31.02 228,859 (30,548) (40,365) 157,946
Leasing agreements primarily cover IT hardware, with contracts of a term of no more than three years. New borrowings over the fiscal period amounted to K 604. Bank overdrafts are used to finance temporary cash requirements related to changes in working capital requirements. Shareholders' current accounts were repaid in full over the fiscal period in the amount of K 1,187. Repayment/buy-back of borrowings during the fiscal year: bank loans in the amount of K 152 loans in connection with the reprocessing of lease agreements in the amount of K 628 government advances in the amount of K 38 bonded debt in the amount of K 57,033

The increase in other tax debts is primarily related to VAT for March 2003.
XV. Miscellaneous information
Geographic breakdown of assets:
ASSETS France Germany UK Rest of Europe United States Canada 7,8,516 5,41,109 2,328 5,507 54,227 62,743 74,476 9,763 4,89,108 10,61,396 16,311 12,252 100,902 190,010 ROW 03.31.03 TOTAL 108,200 175,827 14,099 10,022 308,148 38,148 48,303 153,304 105,457 24,211 97,905 467,328 775,476
Goodwill, business assets, trademarks Intangible assets Tangible assets Financial assets Fixed assets Inventory and work-in-progress Advances and installments paid Trade receivables Other receivables, accruals and deferrals Investment securities Cash Current assets Total Assets
12,657 165,371 5,795 9,326 193,149 16,064 48,041 5,670 81,976 24,211 75,342 251,304 444,453
13,13,769 2,057 9,669 2,15,060 28,829
3,387 28,1,380 33,593 34,007
429 2,3,70 6,854 2,162 2,550 12,242 15,434
Breakdown of assets by activity: In light of the Group's organizational structure and the commercial links between the various subsidiaries, it is not possible to distinguish between activities.
2.1.4.4 Explanatory Notes on the Income Statement I. Sales
The breakdown of the sales of subsidiaries for each geographic area is as follows:
03.31.03 % 10% 13% 3% 5% 15% 10% 40% 4% 100% 03.31.02 % 12% 11% 4% 4% 19% 8% 37% 5% 100%
K Germany UK Scandinavia Italy France Rest of Europe USA/Canada Rest of the world TOTAL 45,343 57,424 15,332 20,920 68,351 46,447 183,352 15,783 452,952
K 43,891 41,460 13,230 16,030 67,970 29,770 137,960 18,650 368,961
Sales at constant exchange rates would have been K 479,142 as of March 31, 2003. Breakdown of sales by activity:
03.31.03 % 5% 77% 18% 100% 03.31.02 % 5% 72% 23% 100%
K Distribution Development Publishing TOTAL 22,648 348,773 81,531 452,952
K 18,448 265,652 84,861 368,961
II. Other operating income
Other operating income breaks down as follows
03.31.03 Capitalized software production costs Other capitalized production costs Production subsidies Write-back of provisions Transfer of expenses Other income TOTAL 72,6,917 2,296 2,901 1,862 86,955 03.31.02
III. Other operating expenses
Other operating expenses break down as follows:
03.31.03 Other external expenses 77,001 Other expenses TOTAL 6,633 2,6,651 93,346 143,331 116,200 1,543 1,493 141,788 03.31.02 114,707
Other external expenses consisted mainly of advertising expenses, royalties, and rental of fixed assets and movables.
IV. Depreciation and provisions
Depreciation and provisions break down as follows:
03.31.03 Depreciation of intangible fixed assets Depreciation of tangible fixed assets Provision for charges to be spread over several fiscal years Provisions for trade receivables Provisions for inventories Provisions for risks and charges TOTAL 72,861 5,308 81,100

XII. Share capital

Balance on 31/03/02 K Appropriation of FY 01/02 earnings K Capital increase in cash, by bond conversion and conversion to euros K Earnings FY 02/03 K Balance on Proposed 31/03/03 appropriation of K FY 02/03 earnings K Balance on 31/03/03 after appropriation of FY 02/03 earnings K
Capital Issue premium Legal reserves Regulated reserves Other reserves Loss account reserve brought forward FY Earnings Investment grants TOTAL
5,384 266,238 11,665 (8,409) (24,390) 306 251,(24,390) 24,390

53 1,337

5,437 267,238 11,665 (32,799) 5,900 5,5,900 258,5,900 (5,900)
5,437 267,238 11,665 (26,899) 94 258,784

(212) 1,178

November 3, 1999 stock purchase warrants Initial number of warrants: Issue price: Exercise period: Exercise price: 372,058, with two warrants required to purchase a share at a face value of 1.52 (FF 10) 136 (FF 892.10) November 3, 1999 through November 2, (FF 1,115.13). As a consequence of the 5-for-1 stock split, two warrants allow five shares to be subscribed with a face value of 0.31
As of April 1, 2002, 340,516 warrants had still not been exercised. 24 warrants were exercised during the fiscal period and warrants not exercised before the end of the period were cancelled. March 12, 2001 stock purchase warrants Number and face value: Issue price: Exercise period: Exercise price: 53,266, with one warrant needed to subscribe one share with a face value of 0.31 0.01(FF 0.07) December 28, 2001 to March 11, 2006 40.288 (FF 264.27)
As of March 31, 2003, no warrants had been exercised. March 19, 2001 stock purchase warrants Number and face value: Issue price: Exercise period: Exercise price: These warrants were cancelled. 9,044, with one warrant needed to subscribe one share with a face value of 0.31 0.01(FF 0.07) March 19, 2002 to March 18, 2006 32.072 (FF 210.38)

Company Savings Plan

The extraordinary portion of the Combined Ordinary and Extraordinary General Meeting of September 12, 2002, authorized the Board of Directors to increase the capital of Ubisoft Entertainment via an 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. At its meeting on October 19, 2001, the Board of Directors used the authorization granted by the Combined Ordinary and Extraordinary General Meeting of September 12, 2000, setting the subscription price of the shares to be issued at 7.09 each, and specified that these shares would be subscribed by the Ubi Actions Company Investment Fund. The employees subscribed 137,115 shares via the Ubi Actions FCPE. The Board of Directors took note of this equity issue at its meeting on December 20, 2002.

As of March 31, 2003, staff consisted of five executives.
2. Financial commitments and other information
Guarantees given: Foreign exchange hedges K 49,475 purchase of CA$ 2,000,000 at an average rate of 1.44 sale of GB 26,000,000 at an average rate of 0.6917 sale of US$ 34,415,325 at an average rate of 1.0735 sale of AU$ 4,029,500 at an average rate of 1.8108 Collateral for loans: Guaranteed received: Leasing (in K):
Initial value Depreciation Net value Payments made Payments remaining to be made < 1 year 2,066 1,> 1 year Residual value

none none

Leased assets consist primarily of IT hardware. Notes receivable discounted: none Retirement gratuities: because of the average age of the staff, retirement-related commitments are insignificant. Various products are marketed under licensing agreements signed by Ubi Soft Entertainment S.A. As of March 31, 2003, the commitments made by the company provided for the payment of guaranteed minimum royalties. At the close of the fiscal year, commitments by virtue of this guaranteed minimum amounted to 23 million. During the next fiscal year, abatements (increases: none) in the calculation of corporate tax will be as follows:
Organic Exchange rate fluctuations
Ubi Soft Entertainment SA undertakes to provide financial support to its subsidiaries to meet their cash requirements.
3. Compensation of corporate officers
Compensation for corporate officers during FY 2002/03 amounted to K 495. No attendance fees were paid. No loans or advances were made to officers of the company in accordance with Article L225-43 of the French Commercial Code.
4. Events after closure of accounts
Issuance of new share purchase or subscription warrants attributed free of charge on May 14, 2003: 17,540,082. Fifteen warrants are needed to subscribe one share with a face value of 0.31 from May 14, 2003 through May 14, 2006. 28
Number and face value: Exercise period: Exercise price:
5. Subsidiaries and affiliated companies on March 31, 2003
Country Currency Reserves and Percentage amounts of capital carried held forward before earnings in appropriation thousands in thousands of currency of currency Capital Book value of Loans and Total securities held advances collateral and In thousands of granted by the guarantees euros company and provided by not yet repaid the company In thousands of currency Net sales Net excl. tax income for last complete year Dividends collected Financial information as of

Entertainment. / EverQuest and You're in Our World Now are registered trademarks and Lords of EverQuest is a trademark of Sony Computer Entertainment America Inc. in the United States and other countries. SOE and the SOE logo are trademarks of Sony Online Entertainment Inc. All other trademarks below to their respective owners. 2003 Sony Computer Entertainment America Inc. All rights reserved. / ShadowbaneTM 2002, 2003 Wolfpack Studios, Inc. All Rights Reserved ShadowbaneTM and Arcane EngineTM are trademarks of Wolfpack Studios. / Rayman 2003 Ubi Soft Entertainment. The logo and the character of Rayman are trademarks of Ubi Soft Entertainment. All rights reserved. / The Settlers 2002 Blue Byte Software. All rights reserved. Settlers is a registered trademarks of Blue Byte Software. Blue Byte Software Inc. is a company of Ubi Soft Entertainment SA. / Bratz Dolls 2003 Ubi Soft Entertainment. All Rights Reserved. Published under license from MGA Entertainment. BRATZ, BRATZ PACK and characters TM and MGA Entertainment. All Rights Reserved. / Lara Croft Tomb Raider : The Prophecy Ubi Soft Entertainment SA 2002. Developed and Published by Ubi Soft Entertainment SA under licence from Eidos Interactive Ltd 2002. Lara Croft Tomb Raider :The Prophecy,Tomb Raider, and Lara Croft are trademarks of Core Design Ltd. All rights reserved. Eidos Interactive and the Eidos logo are trademarks of the Eidos Group of companies. All rights reserved. / Chessmaster 2002 Ubi Soft Entertainment. All Rights Reserved. Chessmaster is a trademark of Ubi Soft Entertainment. / Matrix Online 2003 Warner Bros. All Rights Reserved. THE MATRIX ONLINE, characters, names and all related indicia of each are trademarks of and Warner Bros. Ubi Soft and the Ubi Soft logo are trademarks of Ubi Soft Entertainment in the U.S. and/or other countries. Developed by Monolith Productions. 2003. Monolith is a trademark of Monolith Productions Inc. / Rocky 2002 Rage Games Limited. "Rocky" - "Rocky V"TM & 19766-2002 Metro Goldwyn Mayer Studios Inc. "Rocky" - "Rocky V" 1976-2002 United Artists Corporation. ROCKY TM United Artists Corporation. All rights reserved all rights reserved. Published by Ubi Soft Entertainment. / Will Rock 2003 SABER INTERACTIVE/UBI SOFT ENTERTAINMENT. All Rights Reserved. Developed by Saber Interactive, Inc.Will Rock, the Will Rock logo, the Saber Interactive name, the Saber Interactive logo, the Saber3D Engine name and the Saber3D Engine logo are either registered trademarks or trademarks of Saber Interactive, Inc. in the United States and/or other countries.Ubi Soft and the Ubi Soft logo are trademarks of Ubi Soft Entertainment in the U.S. and/or other countries. / Sony 2003 Sony Computer Entertainment Inc. is a registered trademark of Sony Computer Entertainment America Inc. All rights reserved. PlayStation and the PS Family logo are trademarks of Sony Computer Entertainment Inc. / Nintendo 1989, 1998, 2001 Nintendo of America Inc. Licensed by Nintendo. Game Boy Advance and Nintendo Gamecube are trademarks of Nintendo of America Inc. TM, (R) and the NINTENDO GAMECUBE logo are trademarks of Nintendo. 2002 Nintendo. / Microsoft. Xbox is a trademark of Microsoft Corporation in the United States and/or other countries. All other trademarks are the property of their respective owners.

This document is a free translation of the French Company Report which, in accordance with Regulation 98-01/n95-01 of the Commission des Oprations de Bourse (the French Securities and Exchange Commission) was recorded on September 12, 2003. It may only be used in conjunction with a financial transaction if it is supplemented by a transaction note issued by the Commission des Oprations de Bourse. This Company Report was drawn up by the issuer under the responsibility of the signatories.
Copies of this Company Report are available from Ubi Soft Entertainments commercial offices: 28 rue Armand Carrel, 93108 MONTREUIL-SOUS-BOIS Cedex, FRANCE A joint stock company with capital 5,437,425 divided into 17,540,082 stocks Registered office: 107 avenue Henri Frville, BP 10704, 35207 Rennes Cedex 2 (France). Phone: 33 (0)00 Rennes Companies Register no. 094 - Code NAF: 921 G

AUSTRALIA

Ubi Soft Entertainment Pty Ltd Level 3 ,111-117 Devonshire Street Surry Hills, Sydney NSW 2010 Tel : Fax : 9319 0744

FRANCE

Ubi Soft Entertainment SA 28, rue Armand Carrel Montreuil sous Bois Cedex Tel : Fax : 07 41
Madrid Ubi Soft Entertainment S.A. C/ Playa de Liencres, 2 Edificio Londres pl.1 Complejo Europa Empresarial Ctra N-VI Km.Las Rozas, Madrid Tel : 00 Fax : 52 Barcelona Ubi Studios SL Avenida Ragull nda planta 08190 Sant Cugat del Valls Barcelona Tel : 00 Fax : 53

Germany AUSTRIA

Gamebusters Warenhandels GmbH Hannakstr. 23 A 5023 Salzburg Tel : 440144 Fax : 44014414 Ubi Soft Entertainment GmbH Zimmerstrae Dsseldorf Tel : 0 Fax : 50

ITALY BELGIUM

Ubi Soft Entertainment Chausse de Louvain Brussels Tel : 63 Fax : 35 Buccinasco Ubi Soft SpA Via Enrico Fermi 10/Buccinasco (Milan) Tel : 39 (2) 11 Fax : 39 (2) 37 Milan Ubi Studios Srl Viale Cassala Milan Tel : 39 (2) 1 Fax : 39 (2) 300

SWEDEN

Ubi Soft Entertainment Sweden AB Ekbacksvgen 22 SE - Bromma Tel : (+46) Fax : (+46) 03 43

BRAZIL

Ubi Soft Entertainment Ltda Alameda Lorena, 638 Cep 01424-000 Sao Paulo Tel : 3317 Fax : 3316