Ubisoft 2002 Annual Report Download - page 69

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2003
69
FINANCIAL
REPORT
Accounts on March 31, 2003
2.2.4 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, 2003, and form an
appendix to the balance sheet before distribution of earnings,
which totaled 592.21 million, and to the income statement,
which showed a profit of 5.9 million.
The financial year covered a period of 12 months from April 1,
2002 to March 31, 2003.
Highlights of the financial year
In the course of the financial year,Ubi Soft Entertainment S.A.
absorbed its subsidiaries Ubi Marketing Research SARL and
Ubi Soft Edutainment SA, of which it owned 100%. It 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.
The companies Ubi Administration SARL,Ubi Animation SARL,
Ubi Color SARL, 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
Société Anonyme Simplifiée (SAS).
During the fiscal year, Ubi Soft Entertainment SA transferred
shares of Student‘s Life (17,88 %), Financière 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, Ubi Soft Entertainment SA and its sub-
sidiaries 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 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 aggre-
gate provision of 22,948,000.
2.2.4.1 Accounting principles
General accounting conventions were applied in accordance
with the principle of conservatism and the following funda-
mental criteria:
operational continuity,
consistency in 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.
The accounting methods practiced are in conformity with
usual practices in the sector and no change in method is
planned to date. The annual accounts of Ubisoft
Entertainment follow the provisions relating to individual
accounts of the regulation no. 99-03 approved by the decree
of June 22, 1999.
Since April 1,2002,the company has applied regulation no.00-
06 on liabilities adopted by the Accounting Standards
Committee (CRC). The application of the regulation has had
no effect on share capital at the start of the fiscal year.
2.2.4.2 Accounting rules and methods
Business assets
Acquired business assets include all the intangible elements
(i.e. client base, know-how) required 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 is applied.
Intangible assets
These mainly consist of software design expenses, for:
commercial software programs which are in production
or being marketed;
software tools.
ERP-related expenditures:
These assets are amortized over the following periods:
commercial software programs:three years maximum,
software tools: three years,
ERP-related expenditures:amortized over five years.
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 in progress”(account no.232) as software development
progresses. From the date of their first commercial release,
they are transferred to the "Released software" 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.