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24 SQUARE ENIX 2004
Notes to Consolidated Financial Statements (JPNGAAP)
SQUARE ENIX CO., LTD. and Consolidated Subsidiaries
Notes Regarding Going Concern Issues
Previous fiscal year (April 1, 2002 to March 31, 2003)
ENIX
—
SQUARE
Following ratification at a general meeting of shareholders held on
February 13, 2003, Square Co., Ltd. (“SQUARE”) agreed to merge with
Enix Corporation (“ENIX”) effective April 1, 2003. On that date, assets
and liabilities of SQUARE and ENIX were transferred at book value to the
post-merger entity, Square Enix Co., Ltd. (“SQUARE ENIX” or “the
Company”), together with all rights and obligations of each company.
Consolidated financial statements have been prepared on the basis the
Company is a going concern.
Fiscal year under review (April 1, 2003 to March 31, 2004)
—
Summary of Significant Accounting Policies used in the Preparation of
Consolidated Financial Statements
1. Scope of Consolidation
Previous fiscal year (April 1, 2002 to March 31, 2003)
ENIX
(1) Number of consolidated subsidiaries: 2
Digital Entertainment Academy Co., Ltd.
ENIX AMERICA INC.
(2) Principal non-consolidated subsidiaries:
BMF Corporation
Community Engine Inc.
ENIX WEBSTAR NETWORK
TECHNOLOGY (BEIJING) CO., LTD.
(Rationale for the exclusion of subsidiary companies from the scope of
consolidation)
The non-consolidated subsidiaries conduct operations that are relatively
small in scale. The total of non-consolidated subsidiaries’ assets, sales,
equity in net income (loss) and equity in retained earnings (deficit) are
deemed to have an immaterial impact on ENIX’s financial performance
and consolidated financial statements.
SQUARE
Number of consolidated subsidiaries: 7
Number of patnership: 1
Solid CO.,LTD.
The Game Designers Studio, Inc.
SQUARE SOFT, INC.
SQUARE USA, INC.
SQUARE PICTURES, INC.
SQUARE ELECTRONIC ARTS L.L.C.
SQUARE EUROPE LTD.
FF Film Partners (Partnership)
SQUARE absorbed Square Sounds Co., Ltd. on April 1, 2002.
The Game Designers Studio, Inc. has been included in SQUARE’s scope
of consolidation from the fiscal year under review due to the increasing
importance of its activities and control exercised by SQUARE.
In addition, as the total assets, net sales, net income, and retained earnings
were deemed to have an immaterial impact on SQUARE’s consolidated
financial statements, Escape Co., Ltd.. was excluded from SQUARE’s
scope of consolidation.
Fiscal year under review (April 1, 2003 to March 31, 2004)
The Company
(1) Number of consolidated subsidiaries: 10
Number of partnerships: 1
Digital Entertainment Academy Co., Ltd.
Community Engine Inc.
The Game Designers Studio, Inc.
SQUARE ENIX U.S.A., INC.
SQUARE L.L.C.
SQUARE PICTURES, INC.
SQUARE ENIX EUROPE LTD.
SQUARE ENIX WEBSTAR NETWORK TECHNOLOGY (BEI-
JING) CO., LTD.
COMMUNITY ENGINE NETWORK SOFTWARE (BEIJING)
CO., LTD.
UIEVOLUTION, INC.
FF Film Partners (partnership)
COMMUNITY ENGINE NETWORK SOFTWARE (BEIJING)
CO., LTD. and UIEVOLUTION, INC. were newly acquired during
the fiscal year under review. Due to the increasing importance of their
business activities Community Engine Inc. and SQUARE ENIX WEB-
STAR NETWORK TECHNOLOGY (BEIJING) CO., LTD. have
been included in the Company’s scope of consolidation from the fiscal
year under review.
The Game Designers Studio, Inc., SQUARE L.L.C., SQUARE PIC-
TURES, INC., SQUARE ENIX EUROPE LTD. and FF Film
Partners (partnership) have been included in the Company’s scope of
consolidation from the fiscal year under review due to the merger with
SQUARE In addition, steps to liquidate ENIX AMERICA INC. were
completed during the fiscal year under review.
(2) Principal non-consolidated subsidiaries:
BMF Corporation
Sports BB Corporation.
Solid CO.,LTD.