Ubisoft 2003 Annual Report Download - page 49

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FINANCIAL REPORT
2004 49
02
Financial Report for FY ending 3/31/04
2.1.5 Explanatory notes
on the consolidated accounts
The figures in the notes and tables that follow are shown in
thousands of euros unless otherwise indicated.
2.1.5.1 Highlights of the fiscal year
Disposal of shares:
Over the course of the fiscal year, Ubisoft Entertainment SA
sold 100% of its Blue Byte Software Ltd. stock to its
subsidiary Ubisoft Ltd., 100% of its Ubi Studios SAS stock to
its subsidiary Ubisoft Computing SARL, and 100% of its Ubi
Sound Studio SARL stock to its subsidiary Ubisoft Design
SARL.
Mergers:
The following mergers and acquisitions took place over the
course of the fiscal year:
●Ubisoft Computing SARL and its subsidiary Ubi Studios SAS
as of August 31, 2003.
●Ubisoft Design SARL and its subsidiary Ubi Sound Studio
SARL as of September 30, 2003.
●Red Storm Entertainment Inc. and Sinister Games Inc. as
of December 31, 2003.
●Ubisoft Ltd. and its subsidiary Blue Byte Software Ltd. as
of February 28, 2004.
Bond buybacks:
During the first half of fiscal year, Ubisoft Entertainment SA
bought back 200,000 convertible bonds (OCEANEs) at an
average price of ¤33.
Share acquisitions:
Following the acquisition of 3.4 million shares in Gameloft SA
on September 15, 2003, Ubisoft Entertainment SA passed the
20% mark in terms of voting rights. As of March 31, 2004,
Ubisoft Entertainment SA held 21.775% of the voting rights.
The integration of Gameloft SA (consolidated by the equity
method) gave rise to goodwill totaling ¤13 million upon its
inclusion in the scope of consolidation effective September 15, 2003.
On December 17, 2003, Ubisoft Entertainment SA purchased
100% of the stock in the company Tiwak SAS for ¤1,409,000.
The integration of Tiwak SAS (fully consolidated) in the scope
of consolidation gave rise to goodwill totaling ¤783,000.
Transfer of treasury shares:
On September 30, 2003, Ubisoft Entertainment SA signed an
equity swap contract with Crédit Lyonnais. This contract
involved 918,137 Ubisoft Entertainment SA shares, sold at
¤18.66 each.
As of March 31, 2004, Ubisoft Entertainment SA held 40,249
of its treasury shares, recorded as investment securities in
accordance with Notice 98D of the Emergency Committee
and acquired for an aggregate value of ¤1,020,000..
Issues of mixed securities:
On May 14, 2003, the company issued new share purchase
and subscription warrants, attributed free of charge for
17,540,082 warrants; 15 warrants were needed to subscribe
for one share.
The subscription warrants attributed to Ubisoft
Entertainment SA, namely 1,169,733 warrants, were cancelled.
On November 17, 2003, Ubisoft Entertainment SA issued
bonds with redeemable share subscription warrants
(OBSARs) in the amount of ¤54,974,418; two such warrants
were attached to each bond.
2.1.5.2 Accounting principles
The consolidated accounts were prepared in accordance with
Rule 99-02 of France’s accounting regulatory committee, the
Comité de la Réglementation Comptable (CRC).
The company has not made an advance application of Rule
2002-10 of the CRC relating to the depreciation of assets.
Consolidation methods
Full consolidation
Companies are fully consolidated when they are exclusively
controlled with Ubisoft Entertainment SA’s holding 50% of
their voting rights, directly or indirectly, or at least 40% if
no other shareholder holds a larger percentage.
Equity affiliates
Companies on which Ubisoft Entertainment SA exerts considerable
influence because it holds, directly or indirectly, 20 to 50%
of the voting rights are accounted for using the equity
method.
As of March 31, 2004, all of the companies in the group are
exclusively controlled by Ubisoft Entertainment SA. The
accounts are therefore fully consolidated with the exception
of Gameloft SA, of which Ubisoft Entertainment SA controls
21.78% and which is therefore consolidated using the equity
method.
Intra-group transactions are eliminated for all the companies
in the group according to the applicable consolidation rules.
All significant transactions between consolidated companies
and all unrealized internal results included in the fixed assets
have been eliminated.
The results of companies falling under the scope of consolidation
are consolidated beginning with the date the companies are
taken under control or the date of their incorporation.
Companies that have been liquidated, are in the process of
liquidation, or fall below significance thresholds are not
included in the scope of consolidation.
The following criteria were used:
●¤76,000 on the "Balance sheet total" in the case of production
companies.
●¤100,000 in sales in the case of distribution companies.