Square Enix 2004 Annual Report Download - page 27

SQUARE ENIX 2004 25
Steps are currently in progress to liquidate Sports BB Corporation. fol-
lowing a resolution at a shareholders meeting held on March 15, 2004.
(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 effect on the Company’s financial perfor-
mance and consolidated financial statements.
2. Application of the Equity Method
Previous fiscal year (April 1, 2002 to March 31, 2003)
ENIX
Principal non-consolidated subsidiaries not accounted for by the equity
method are BMF Corporation, Community Engine Inc., ENIX WEB-
STAR NETWORK TECHNOLOGY (BEIJING) CO., LTD. and MAG
Garden Corp. These companies have been excluded from the scope of con-
solidation as equity-method affiliates, as ENIX’s equity in net income (loss)
and equity in retained earnings (deficit) in these companies are deemed to
have an immaterial effect on ENIX’s financial performance and consolidat-
ed financial statements.
SQUARE
Number of equity-method non-consolidated subsidiaries: 1
Escape Co., Ltd..
Number of equity-method affiliates: 2
Digicube Co., Ltd.
SQUARE ELECTRONIC ARTS L.L.C.
Affiliated company Kusanagi Inc. conducts operations that are relatively
small in scale. Kusanagi Inc.’s net income (loss) and retained earnings
(deficit) are deemed to have an immaterial effect on SQUARE’s financial
performance and consolidated financial statements. Accordingly, Kusanagi
Inc. has been excluded as an equity-method affiliate.
Fiscal year under review (April 1, 2003 to March 31, 2004)
The Company
Number of equity-method affiliates: 1
Digicube Co., Ltd.
On November 26, 2003, Digicube Co., Ltd. filed for bankruptcy with the
Tokyo District Court. As a result of the declaration of bankruptcy, the firm
was delisted from the Hercules Nippon New Market of the Osaka
Securities Exchange.
Principal non-consolidated subsidiaries not accounted for by the equity
method include BMF Corporation, Sports BB Corporation., Solid
CO.,LTD., SQUARE U.S.A., INC. and Kusanagi Inc. (an affiliated com-
pany). These companies have been excluded from the scope of consolida-
tion as equity-method affiliates, as the Company’s equity in net income
(loss) and equity in retained earnings (deficit) in these companies are
deemed to have an immaterial effect on the Company’s financial perfor-
mance and consolidated financial statements. In addition, as the Company’s
investment in MAG Garden Corp. is deemed to be temporary, it has been
excluded from the scope of consolidation as an equity-method affiliate.
3. Fiscal Years of Consolidated Subsidiaries
Previous fiscal year (April 1, 2002 to March 31, 2003)
ENIX
The fiscal year of consolidated subsidiary ENIX AMERICA INC. ends
December 31. In the preparation of consolidated financial statements, a
December 31 fiscal year-end for ENIX AMERICA INC. was used.
However, in the event a major transaction took place between the period
December 31 and the consolidated balance date of March 31, necessary
adjustments have been made to the consolidated financial statements.
SQUARE
The fiscal years of consolidated subsidiary SQUARE PICTURES, INC.
and consolidated partnership FF Film Partners end December 31. In the
preparation of consolidated financial statements, a December 31 fiscal
year-end for SQUARE PICTURES, INC. and FF Film Partners was used.
However, in the event a major transaction took place between the period
December 31 and the consolidated balance date of March 31, necessary
adjustments have been made to the consolidated financial statements.
Fiscal year under review (April 1, 2003 to March 31, 2004)
The Company
The fiscal years of consolidated subsidiaries SQUARE ENIX WEBSTAR
NETWORK TECHNOLOGY (BEIJING) CO., LTD., SQUARE PIC-
TURES, INC. and consolidated partnership FF Film Partners end
December 31. In the preparation of consolidated financial statements, a
December 31 fiscal year-end for SQUARE ENIX WEBSTAR NET-
WORK TECHNOLOGY (BEIJING) CO., LTD., SQUARE PIC-
TURES, INC. and FF Film Partners was used. However, in the event a
major transaction took place between the period December 31 and the
consolidated balance date of March 31, necessary adjustments have been
made to the consolidated financial statements.
4. Summary of Significant Accounting Policies
(1) Standards and valuation methods for major assets
Previous fiscal year (April 1, 2002 to March 31, 2003)