History of the Group

Transcription

2000-2001 ANNUAL REPORT
Reference Document
This document is a free translation of Guillemot Corporation’s original French Annual Report,
registered with the Commission des Opérations de Bourse (Stock Exchange Operations Committee) on
February 27, 2002 under registration number R.02-027, pursuant to regulation 95-01.
The original document may only be used in support of financial transactions when accompanied by a
transaction note duly approved by the Commission des Opérations de Bourse.
The reference document was prepared by the registering company and invokes the responsibility of its
signatories.
The registration, carried out following an examination of the pertinence and coherence of information
relating to the status of the company, does not imply authentication of the accounting and financial
elements contained in the document.
Copies of this reference document are available
at Guillemot Corporation’s head office:
Place de l’Etoile – 56910 CARENTOIR (France)
Tel.: (33) 2 99 08 08 80
Public limited company with a capital of EUR 4,602,002.11
allocated through 6,037,431 shares.
414 196 758 R.C.S. Vannes – APE code : 516 G
1
RESPONSIBILITY FOR REFERENCE
DOCUMENT AND INDEPENDENT
AUDITORS’ REPORTS
RESPONSIBILITY FOR REFERENCE DOCUMENT
Claude GUILLEMOT
Chairman of the Board of Directors
DECLARATION
OF
Christian GUILLEMOT
Chief Financial Officer
RESPONSIBILITY
REGARDING
REFERENCE
DOCUMENT
To the best of our knowledge, all aspects of this reference document are accurate and reflect the actual
state of affairs of the company: this document contains all of the necessary information for
shareholders and other interested parties to be able to make informed decisions regarding the
organization’s history, its activities, financial situation, results and future prospects; nothing has been
omitted which might affect the validity of the facts contained herein.
Claude GUILLEMOT
Christian GUILLEMOT
RESPONSIBILITY FOR INDEPENDENT AUDITORS’ REPORTS
Independent auditors
Date of first appointment
André METAYER
Cabinet André METAYER
5, rue Marie Alizon
35000 RENNES (France)
Annual General Meeting
September 1, 1997
Roland TRAVERS
38, rue Legen de Kerangal
September 1, 1997
Alternates
Compagnie Consulaire d'Expertise Annual General Meeting
Comptable Jean Delquié
September 1, 1997
84, boulevard de Reuilly
75012 PARIS (France)
Monsieur Jacques LE DORZE
90, rue Chateaugiron
September 1, 1997
Expiration date of current
term
approving the accounts
for the financial year ending
August 31, 2003
August 31, 2003
August 31, 2003
August 31, 2003
2
REPORT OF INDEPENDENT AUDITORS
As independent auditors of the company Guillemot Corporation SA and pursuant to the application of
regulation COB No. 95-01, we have conducted, in accordance with French professional standards, the
verification of financial and historical accounting information in this reference document, prepared
pursuant to the closing of accounts for the financial year ended August 31, 2001.
The responsibility for preparing this reference document lies with Claude Guillemot, Chairman of the
Board of Directors. It is our responsibility to offer assurance on the fairness of the accounting and
financial information it contains.
The methods we have employed, with due diligence and in conformity with French professional
standards, consisted of evaluating the sincerity of the financial and accounting information presented
and verifying its consistency with respect to financial statements already subject to an audit report. Our
duties likewise entailed reading through all other information contained in this reference document, in
order to identify any significant inconsistencies in relation to the company’s financial and accounting
standing, and to single out clearly erroneous information brought to light on the basis of our general
understanding of the company’s affairs within the context of our appointment. With respect to isolated
provisional data resulting from a process of structured elaboration, this close reading has taken into
account the hypotheses employed, as well as the numeric results derived in this manner.
The annual consolidated and parent company accounts for the financial year ending on August 31st,
2000 were subject to a financial audit by ourselves, in accordance with French professional standards,
and have been respectively certified and endorsed without any reservation or observations.
The annual and consolidated accounts for the financial year ended August 31, 2001, having been
approved by the Board of Directors, were subject to an audit by ourselves, in accordance with French
professional standards, and have been respectively certified and endorsed without reservation but with
the following observations:
- Deferred tax assets linked to financial deficits, which may be calculated against future income, were
re-examined in a very prudent and restrictive manner; as a result, no deferred tax assets have been
accounted for in relation to deficits.
- Treasury stock has been accounted for as financial fixed assets in the financial statements.
Consolidated shareholders’ equity has been thereby reduced, and the provision for depreciation of
these shares has been abolished, in accordance with Article 271 of regulation 99-02.
On the basis of our due diligence procedures, we have no observations to make regarding the fairness
of the information set out in this reference document as regards the company’s financial standing or
otherwise.
Rennes, February 27, 2002
André METAYER
Roland TRAVERS
3
RESPONSIBILITY FOR REFERENCE DOCUMENT INFORMATION
Claude GUILLEMOT
Place de l'Etoile
56910 CARENTOIR
Tel. (33) 2 99 08 08 80
Christian GUILLEMOT
Place de l'Etoile
56910 CARENTOIR
Tel. (33) 2 99 08 08 80
4
OVERVIEW
RESPONSIBILITY FOR REFERENCE DOCUMENT AND INDEPENDENT AUDITORS’
REPORTS ............................................................................................................................................................... 2
OVERVIEW........................................................................................................................................................... 5
TABLE OF CONTENTS .................................................................................................................................... 6
♦
THE GUILLEMOT CORPORATION GROUP ............................................................. 7
I. History of the Group ................................................................................................................................ 8
II. The Group’s structure: an international structure organized by business segment...................... 11
III. Guillemot Corporation’s activities and market ................................................................................ 14
IV. Guillemot Corporation’s development plan ..................................................................................... 35
V. Risk analysis............................................................................................................................................. 44
VI. Glossary of Technical Terms .............................................................................................................. 48
♦
General information ABOUT the company and its share capital....................................51
I. General Information about the Company ........................................................................................... 52
II. General information about the company’s share capital.................................................................. 56
III. Dividends............................................................................................................................................... 62
IV. Company Stock Exchange Information............................................................................................ 63
♦
Audited annual financial statements ............................................................................... 65
I. Guillemot Corporation August 31, 2001 year-end consolidated financial statements .................. 66
II. Guillemot Corporation August 31, 2001 year-end financial Statements........................................ 86
♦
Guillemot Corporation group board of directors and executive management ..............107
I. Guillemot Corporation Group Board of Directors and executive management .........................108
II. Workings of administrative and management bodies.....................................................................113
III. Remuneration of members of administrative and management bodies.....................................114
♦
Calendar of events for the current financial year............................................................ 115
5
TABLE OF CONTENTS
I. Responsibility for reference document and Independent Auditors’ reports
1. Responsibility for reference document
2. Declaration of responsibility regarding reference document
3. Responsibility for Independent Auditors’ reports
4. Report of Independent Auditors
5. Responsibility for reference document information
p.2
p.2
p.2
p.2
p.3
p.4
II. General information about the company and its share capital
1. General information about the company
2. General information about the company’s share capital
3. Dividends
4. Company stock exchange information
p.52
p.52
p.56
p.62
p.63
III. Information about Guillemot Corporation’s activities,
recent evolution and prospects
1. Presentation of the Group
1.1
Guillemot Corporation’s activities and market
1.2
The market in which Guillemot Corporation is evolving
1.3
History and evolution of the Group
1.4
The Group’s structure: an international structure organized by business segment
1.5
Group performance for the financial year ended August 31, 2001:
actual versus forecast results
2. Guillemot Corporation’s development plan
2.1
Developmental strategy
2.2
Forecast net sales for the year: forecasted financial impact of developmental strategy
3. Risk analysis
3.1
Industry risk
3.2
Competition risk
3.3
Financial risk
3.4
International development risk
3.5
Other risks
p.36
p.35
p.37
p.40
p.44
p.44
p.45
p.45
p.46
p.46
IV. Assets – Financial standing – Results
1. Guillemot Corporation August 31, 2001 year-end consolidated financial statements
1.1
Consolidated balance sheet at August 31, 2001 year-end
1.2
Consolidated statement of income at August 31, 2001 year-end
1.3
Selected consolidated performance results
1.4
Consolidated cash flow table
1.5
Appendix to August 31, 2001 year-end consolidated financial statements
2. Guillemot Corporation August 31, 2001 year-end financial statements
2.1
Balance sheet at August 31, 2001 year-end
2.2
Statement of income at August 31, 2001 year-end
2.3
Selected performance results
2.4
Cash flow statement
2.5
Appendix to August 31, 2001 year-end financial statements
p.65
p.66
p.66
p.67
p.67
p.68
p.69
p.86
p.86
p.87
p.87
p.88
p.88
V. Guillemot Corporation Group Board of Directors and executive management
IV. Calendar of events for the current financial year
p.107
p.115
p.7
p.7
p.14
p.30
p.8
p.11
6
♦
HE G
UILLEMOT C
ORPORATION G
ROUP
♦T
THE
GUILLEMOT
CORPORATION
GROUP
7
I. HISTORY OF THE GROUP
1984
The Guillemot firm organizes its activities around the distribution of computer products
and becomes Guillemot Informatique.
1994-96
The five Guillemot brothers create a network of marketing companies in several
countries (Belgium, Germany, The United Kingdom, Switzerland, the United States,
Canada, Hong Kong).
Guillemot International markets its Maxi hardware range, as well as its Fun Access and
Access Line ranges of accessories.
Guillemot International becomes the first company in the world to design, manufacture
and market a 64-voice polyphonic sound card, the Maxi Sound 64, and to master true
quadraphonic sound reproduction.
1997
On September 1, 1997, the five brothers create the Guillemot International Multimedia
parent company to head up the Group’s activities. An international group thus comes
into being, organized by business segment, specializing in the design and distribution of
hardware and accessories related to interactive entertainment.
Guillemot International launches the Maxi Sound 64 Home studio Pro sound card, the
world’s first high-performance personal home studio for less than FRF 2000.
1998
Guillemot
International
Multimedia
becomes
Guillemot
Corporation.
The Group continues to grow and expand internationally, creating a research and
development facility in Canada. At November 1, 1998, the Group is composed of 19
different companies.
Guillemot Corporation is the leading European manufacturer of graphics boards based
on 3DFX, Voodoo Graphics and 3DFX Voodoo2 technologies, with the release of the
Maxi Gamer 3D and Maxi Gamer 3D2, respectively. Moreover, it is the first company in
the world to market a 2D/3D graphics board based on 3DFX’s Voodoo Banshee
technology, namely the Maxi Gamer Phoenix.
The Group releases its first PC accessory to make use of Force Feedback technology, the
Race Leader Force Feedback racing wheel, and also distinguishes itself by the success of its
products based on digital technology.
At the end of November, Guillemot Corporation is successfully introduced into the
New Market section of the Paris Stock Exchange (SICOVAM code 6672).
1999
In the accessories field, Guillemot Corporation becomes a world leader in the PC racing
wheel market with the acquisition of the Hardware and Accessories activities of the
American company Thrustmaster. The Guillemot Corporation Group also signs an
exclusive worldwide licensing agreement with Ferrari® for its PC and console racing
accessories. Guillemot Corporation purchases the assets of the American company
Hercules Computer Technology Inc, the inventor of the PC graphics board.
Guillemot Corporation reaches a partnership deal with the government of Quebec,
enabling it to benefit from substantial subsidies aimed at increasing its local investments
with regard to research and development.
Guillemot Participations SA takes up a 40% holding in Guillemot Corporation through
a contribution of shares held by the Guillemot family. Its goal is to assume the risks
related to the startup of important projects, such as the setting up of a new subsidiary in
Japan.
8
The Group creates a new concept in professional quality audio solutions with the
revolutionary positioning of its Maxi Studio ISIS card within the music market.
In the domain of graphics boards, the Group enjoys great success with the design of the
Maxi Gamer Xentor card, winner of more than 80 international awards.
The Group distinguishes itself by way of products making use of digital technology,
particularly
its
Racing Wheel,
under
official
license
from Ferrari.
It also positions itself as an industry pioneer with the design and the launch of the Dual
Analog Gamepad controller for PC, which combines excellent ergonomics with the
comfort of a rubberized coating. With its Shock2 Infrared Controller, the Group offers
cordless gaming freedom to console gamers worldwide.
2000
From this point on, the Group organizes its activities around two brand names:
Hercules (for PC hardware products), and Thrustmaster (for PC and console
accessories).
Guillemot Corporation continues to both successfully develop its commercial activities
within the United States and establish its brands on an international scale. The Group
creates Guillemot Srl (Italy), Guillemot KK (Japan) and Guillemot PTY Ltd (Australia),
and integrates Guillemot Canada into the group.
Hercules unveils an unprecedented, revolutionary gaming concept with its Game
Theater XP and adds to its 3D Prophet range with the launch of the 3D Prophet II Ultra,
the fastest and most advanced 3D accelerator card in the world (according to
www.hexus.net/ud3d.php and PC Pro (UK) in January, 2001).
Thrustmaster launches a whole new line of innovative PC and console accessories,
notable among these the first dance accessory for PCs and consoles (the Dance Mat )
and the Freestyler Board  (a skate-/surfboard controller).
2001
On March 9, Hercules and STMicroelectronics reach a commercial partnership and
technological collaboration agreement for developing cutting-edge PC graphics
solutions. To seal the deal, the two companies jointly announce the rollout of some
highly innovative products: Hercules develops a new PC graphics board – the 3D Prophet
4500 – the first of a new generation based on the KYRO II chipset produced by
STMicroelectronics.
On March 23, Thrustmaster announces an Xbox licensing agreement reached with
Microsoft. This agreement allows Thrustmaster to design, produce and distribute
Xbox-licensed peripherals for Microsoft’s upcoming game console under its own brand
name for the North American, Japanese and European markets.
At the end of March, Hercules announces the launch of the Gamesurround Muse XL,
the highly-esteemed successor to the Maxi Sound Muse.
In June, Hercules announces a worldwide collaboration with Analog Devices and Intel
in the audio domain. This collaboration is designed to offer a new generation of
exceptional audio solutions based on the new CNR (Communication and Networking
Riser) bus and SoundMax technology. Thus, thanks to both hardware and software
making use of SoundMax audio technology, sound can now be processed directly by
powerful Intel Pentium III and Pentium IV processors.
On August 31, 2001, Guillemot Corporation ceases its gaming software distribution
activities, which represented FRF 269 M of its net sales for the year. The Group
devotes itself from this point on exclusively to the design of hardware and accessories
9
for the interactive entertainment market. The Group thus becomes a “pure player” with
respect to the interactive hardware and accessories markets.
In September, Electronic Arts and Thrustmaster combine their talents to offer the
best software and hardware elements for Sony’s PlayStation®2 console, providing
unparalleled sensations to gamers.
At the end of October, Hercules presents its new 3D Prophet Titanium range and takes
its place among the top three sellers of graphics boards in the French market with its
new line based on of KYRO technology. For its part, Thrustmaster announces the
launch of the Cheatcode S.
10
II. THE
GROUP’S
STRUCTURE:
AN
INTERNATIONAL
STRUCTURE ORGANIZED BY BUSINESS SEGMENT
The Guillemot Corporation SA parent company coordinates the activities of its various subsidiaries in
order to offer a coherent range of products adapted to the international market, and to rationalize the
flow between marketing companies, after-sales services, as well as packaging and logistics operations.
Guillemot Corporation sets the general strategy and coordinates the design of product ranges,
purchases, marketing, general administration and the management of Intranet and Extranet networks.
Organization of the Group
• Guillemot Recherche et Développement SARL. This team of engineers develops product
solutions for both hardware and accessories. Guillemot Recherche et Développement SARL has a
Canadian subsidiary, Guillemot Recherche et Développement Inc.
• Guillemot Studio Graphique SARL produces all of the graphics and design elements for companies
within the Group.
• Guillemot Conditionnement SARL is responsible for product packaging.
subsidiary, Guillemot Conditionnement France SARL.
It has a French
• Thrustmaster SA and Thrustmaster Inc design, develop, produce and promote Thrustmaster
accessories (racing wheels, joysticks, gamepads and portable accessories for PC and console).
• Similarly, Hercules Technologies SA and Hercules Technologies Inc develop the Hercules
range, composed of image and video (graphics boards, flat screens, digital cameras…) and soundrelated products (sound cards, speakers).
• 17 marketing companies are established in France, Germany, The United Kingdom,
the Netherlands, Belgium, Switzerland, Spain, the United States, Canada, Hong Kong, Japan*, Italy*,
the Czech Republic*, Finland*, Denmark*, Sweden* and Australia*. These companies develop sales
and marketing activities, as well as after-sales service adapted to their local markets. Guillemot Inc of
Montreal has been a subsidiary of Guillemot Inc of Walnut Creek in the United States since August 31,
2000.
These companies employ between ten and one hundred people each. The European companies use
the services of factoring companies to finance and insure their trade receivables.
The Hong Kong marketing company, Guillemot Ltd, includes a Quality Control department, which
oversees the production within assembly facilities in order to ensure that every step of the process is
carried out in accordance with the most stringent standards for quality control.
• Guillemot Online.com Inc is an online marketing company based in the United States at Walnut
Creek. Guillemot Online.com Inc develops and implements online sales tools for the North
American market.
• Guillemot Administration SARL is in charge of all of the Group’s French administrative activities
(human resources, accounting, management and legal issues and data processing).
• Guillemot Logistique SARL and its subsidiaries: the logistics group oversees the organization of
transport, stock management and order preparation. Transport is entrusted to external specialist
companies. The Group’s marketing subsidiaries in Spain, Germany, England and Canada are in the
process of integrating logistics operations into their respective structures: this reorganization will result
11
in the termination of discrete logistics companies in these countries. The subsidiaries Guillemot
Logistique France SARL and Guillemot Logistics Ltd in Hong Kong will pursue their activities within
the framework of the current organization.
• Guillemot Support Technique SARL is responsible for answering questions from French-speaking
users of both Guillemot products and products distributed by the company, and participates in
organizing the structures of online technical support services in different countries.
• Created in April 2000, Guillemot Ventures SA’s mission is to invest in high-potential companies that
are developing within the fields of the latest technologies, in order to take advantage of developmental
synergy between these companies and Guillemot Corporation.
For its activities based in France, Guillemot Corporation has at its disposal 4200 m² of office space,
3700 m² of workshop space et 7400 m3 of storage space.
Over the course of the last two years, the Group has increased the size of its facilities in order to
accommodate its growth.
Approximately FRF 14 M (EUR 2.1 M) were invested in buildings during the 2000/2001 financial year,
of this FRF 18.8 M (EUR 2.8 M) were completed, and another FRF 2.4 M (EUR 366 K) remains under
construction at August 31, 2001.
Facilities used for activities outside of France are leased (with the exception of Switzerland, where
property was acquired during the course of the year).
To better cope with the increasing number of users and the volume of data processed, the Group has
invested roughly FRF 13 M (EUR 1.9 M) over the course of the last financial year in its computer
facilities and networks, both in France and elsewhere.
Buildings and technical installations are financed by long and medium-term credits, as is computer
equipment, which is always financed in part by leasing and medium-term credit.
Research and Development spending reached a level of FRF 25.7 M (EUR 3.9 M) for the year,
representing 2.1% of consolidated net sales for hardware and accessories. This amount (which totaled
1.7% for the previous year) should remain at approximately 2% over the course of the coming financial
year.
The Group also owns part of the equipment used by its suppliers: to wit, nearly FRF 6.5 M (EUR 991
K) were invested during the financial year in the design and production of molds required for the
production of accessories.
* The marketing companies established in Japan, Italy, Denmark, the Czech Republic, Sweden, Finland
and Australia are subsidiaries of Guillemot Participations.
At August 31, 2001, the Group employed a global workforce of 636 employees, of which 30% were
managers. 14% of the company’s workforce are engineers and technicians dedicated to Research and
Development.
Evolution of the Group’s workforce over the last three financial years
31/08/01 31/08/00 31/08/99
Employees
636
511
394
Managers (percentage)
30%
31%
25%
Engineers and technicians (percentage)
14%
15%
9%
12
Guillemot Corporation Group
Organizational chart at August 31, 2001
GUILLEMOT
FAMILY
GUILLEMOT
PARTICIPATIONS SA
26.45%
PUBLIC
21.98%
SELF-CONTROLLED
41.78%
9.79%
GUILLEMOT CORPORATION SA
Sales and Marketing
Guillemot France SA
Guillemot GmbH
Guillemot Ltd
Guillemot Ltd
Guillemot BV
Guillemot SA
Guillemot Logistica SL(1)
Guillemot SA
Logicosoftware SA
Guillemot Online.com Inc
Guillemot Inc
Guillemot Inc(2)
France
Germany
UK
Hong Kong
The Netherlands
Spain
Spain
Belgium
Switzerland
The United States
The United States
Canada
99.41%
99.75%
99.99%
99.50%
98.75%
99.87%
100.00%
99.93%
99.66%
100.00%
99.99%
99.91%
Distribution
Guillemot Logistique SARL
Guillemot Logistique Inc(3)
Guillemot Logistik GmbH(3)
Guillemot Logistique France(3)
Guillemot Logistics Ltd(3)
Guillemot Logistic Ltd (3)
France
Canada
Germany
France
Hong Kong
UK
Technical Support
Guillemot Support Technique SARL
France
99.25%
Administration
Guillemot Administration SARL
France
99.80%
(1)
(2)
(3)
(4)
(5)
(6)
99.80%
99.50%
95.00%
99.95%
99.50%
100.00%
Packaging
Guillemot Conditionnement SARL
Guillemot Conditionnement France SARL(4)
Guillemot Manufacturing Ltd(4)
France
France
UK
99.80%
99.96%
100.00%
Research & Development
Guillemot Recherche et Développement SARL
France
Guillemot Recherche et Développement Inc(5) Canada
99.00%
99.50%
Graphic Studio
Guillemot Studio Graphique SARL
France
99.80%
Marketing
Thrustmaster SA
Thrustmaster Inc
Hercules Technologies SA
Hercules Technologies Inc
France
The United States
France
The United States
Investments
GameLoft.com SA
Guillemot Inc
Guillemot Ventures SA
Ludigames SA (6)
Students-Life.com SA (6)
SAS Financière Yaccom (6)
Wokup ! SA (6)
Wingmen Alliance SA(6)
GameLoft.com SA (6)
France
Canada
France
France
France
France
France
Spain
France
99.72%
100.00%
99.72%
100.00%
15.12%
0.08%
99.99%
20.00%
13.61%
12.00%
13.44%
20.00%
0.02%
Controlled by Guillemot SA (Spain)
Controlled by Guillemot Inc (The United States)
Controlled by Guillemot Logistique SARL
Controlled by Guillemot Conditionnement SARL
Controlled by Guillemot Recherche et Développement SARL
Investment venture of Guillemot Ventures SA
13
III. GUILLEMOT CORPORATION’S ACTIVITIES AND MARKET
A.
Design, production and distribution of interactive entertainment hardware
and accessories
Guillemot Corporation is a designer, manufacturer and distributor of interactive leisure hardware and
accessories. The 5th largest company in its field worldwide, the Group offers a wide range of products
under the Hercules and Thrustmaster brand names. Active in this market since 1984, the Guillemot
Corporation Group is currently present in 17 countries (including Germany, the United Kingdom, the
United States, Canada and Japan) and distributes its products in a total of 45 countries worldwide. The
Group’s mission is to offer innovative, high-quality products to intensify the sensations experienced by
gamers and the enjoyment they derive from gaming.
With its internal research and development teams, Guillemot’s engineers produce first-rate technical
solutions and product designs in order to offer the best possible price/enjoyment and
price/performance ratios to its customers. The sales and marketing teams in each of its subsidiaries are
in charge of promoting products across their territories.
B.
Strong brands and prestigious licenses
Guillemot Corporation’s goal is to design products recognized as the best in their respective fields by
the hardcore gamers and music enthusiasts, and to rank among the top three manufacturers of
interactive hardware and accessories worldwide by 2003.
In order to achieve this, Guillemot Corporation is concentrating on its two strongest brands: Hercules
for PC hardware, and Thrustmaster for PC and console accessories. The Group’s prestigious
licensing agreements with Ferrari and Nascar® for its racing wheels, and with Top Gun™ for
joysticks serve to strengthen the prestige of its accessory lines, as does the close collaboration it has
developed with the U.S. Air Force. Thrustmaster accessories developed for the new Xbox™ console
are also under official license from Microsoft.
Guillemot Corporation owns both the Hercules and Thrustmaster brands.
The Group’s brands are registered with the Office for Harmonization in the Internal Market in Europe,
with the United States Patent and Trademark Office in the United States and with the Canadian
Intellectual Property Office in Canada.
The Group intends to sign other licensing agreements. No brands or patents are owned by its
founding managers.
14
1)
H
Heercules hardware products
Founded in the United States in 1982 and purchased in November 1999 by Guillemot Corporation,
Hercules was the first company to produce high-resolution graphics solutions for the PC. Having set
the monochrome graphics standard, Hercules then became the world pioneer in innovative graphics
and video products. Hercules now offers a complete range of image and sound-oriented products for
PCs: graphics accelerator boards, video editing boards, audio systems and image peripherals. Cuttingedge products such as the new lines of graphics boards based on KYRO chipsets, the 3D Prophet
Titanium range and the Game Theater XP – a truly revolutionary design – contribute to the growing
visibility of the Hercules brand worldwide.
Graphics boards, audio products and image peripherals for the PC
a)
Graphics boards
The year 2001 was marked by the great success of Hercules’ 3D Prophet KYRO series of graphics
boards. Since the launch of this new range based on STMicroelectronics’ KYRO technology, Hercules
has had very positive reactions from both the specialized press and distributors worldwide.
At the end of October 2001, Hercules ranked among the top three companies in this category for sales
in France, and in July held a 32.7% share of the French market for retail graphics board sales.
Today, Hercules is one of the leading manufacturers to offer a homogeneous line of graphics boards.
With its 3D Prophet KYRO Series boards, Hercules has remained true to its policy of offering optimal
solutions at competitive prices to every category of gaming enthusiast.
With its latest 3D Prophet III generation of products, Hercules is offering a line of boards which meets
the needs of even the most demanding gamers. Making use of the very latest technologies in the
industry, Hercules is able to design a range of 2D/3D graphics accelerator boards that just keep on
getting better and better.
The launch of the new 3D Prophet Titanium during 2001 met with an excellent reception. This family
of three boards offers particularly powerful graphics solutions for processing all of the latest 3D effects.
These cards, built on Nvidia’s powerful GeForce 3 graphics processors, provide a blueprint for the
graphics boards of tomorrow: ultra-powerful 3D engines for hyper-realistic 3D games and perfectly
fluid applications.
Hercules graphics accelerator board range
o 3D Prophet II Mx
The latest entry in the 3D Prophet II line, the 3D Prophet II Mx board is built on the GeForce2 Mx
processor, NVIDIA’s latest GPU. Released in June 2000, this board offers the most sophisticated 3D
functions in high resolutions. Aimed at the general public, this board has been extremely well-received
thanks to its good performance/price ratio. With the 3D Prophet II MX Dual-Display Video board, built
on GeForce 2 MX and TwinViewTM double display architecture, users can carry out different functions
on two screens simultaneously with stunning 3D performance. A wide range of functions are also
available for games and video display.
o 3D Prophet 4000 XT
Hercules also offers the 3D Prophet 4000 XT: built on the KYRO 4000XT processor by
STMicroelectronics, this board provides the perfect combination of power in 3D games, excellent
image quality and incredible performance in 2D applications.
15
o 3D Prophet 4500
In keeping with its desire to offer the latest technological innovations, Hercules has equipped its new
3D Prophet 4500 graphics board with STMicroelectronics’ KYRO II processor, a revolutionary 3D
engine which represents an entirely new approach to 3D rendering. Introduced in May 2001, this board
makes the best use of KYRO II technology by linking it with an optimized design, 64MB of integrated
memory and high-quality drivers, allowing PC users to experience unparalleled sensations in existing
and upcoming games, all at an accessible price.
o 3D Prophet III Titanium 200 and Ti 500
The end of October 2001 saw the addition of a new member to Hercules’ 3D Prophet family: the 3D
Prophet Titanium. This new range, built on the powerful GeForce 2 and GeForce 3 titanium graphics
processors, represents the best in speed, power and innovation.
The 3D Prophet III Ti 500 and Ti 200 boards offer particularly powerful graphics solutions for
processing the latest 3D effects currently being integrated by game developers.
o
3D Prophet III Titanium 200
Built on the new GeForce3 Titanium 200 processor, this new card ensures perfect fluidity in games,
even at the highest resolutions. Especially well-adapted to the European market, this card offers
superior quality image reproduction.
o
3D Prophet III Titanium 500
Thanks to its impressive characteristics, this high-end card is recognized as the uncontested leader in
3D. Designed especially for the GeForce 3 Ti 500 – the most powerful graphics processor on the
market – the 3D Prophet Ti 500 also includes a DVI output, allowing users to enjoy their DVDs and
games on a digital display screen.
b)
Digital video editing
With DV Action!, Hercules has incorporated the best software applications and technologies to
create a complete digital video editing solution for PCs. Amateur filmmakers can create videos using
digital video captures, access useful recording functions and edit professional-quality films, making DV
Action! the perfect utility for aspiring directors who want to share their creations with friends and family.
c)
PC sound products
The Group’s expertise in the domain of music and sound has quite naturally led Hercules to extend its
activities into the field of portable digital sound.
Thanks to its seventeen years of experience and two research and development facilities (in Europe and
North America), Hercules can guarantee its customers products which are of the highest quality, as well
as compatibility with all of the latest standards and existing hardware and software.
o Game Theater XP
Winner of roughly one hundred awards since its launch at the end of 2000, Game Theater XP is
Hercules’ high-end audio solution designed specifically to meet the various needs of gamers.
This revolutionary concept in the gaming industry represents the most powerful, interactive and userfriendly audio solution ever offered and signals the birth of a new generation of gaming stations
equipped with a USB hub, 4 ultra-high speed ports and a game port for easy connection of gaming
peripherals. Game Theater XP is also the ideal solution for any DVD fan whose PC is equipped with a
DVD-ROM drive.
16
This audio station supports Dolby Digital™ decoding on six independent RCA outputs, and features
S/PDIF output connectors for Dolby Digital™ and DTS™ (Digital Theater System) sound processing.
By combining a Game Theater XP sound card, a 3D Prophet II graphics board and a Maxi DVD Theater
12X drive, Hercules enables users to enjoy the home theater experience on PC, recreating the
ambience of an arcade or movie theater right in their own home with 3D sound over four speakers,
cinema-quality images and optimal acceleration in all types of games.
o Gamesurround Muse XL
Hercules has expanded its range by offering the Gamesurround Muse XL, the first card to offer
such an extensive list of features at such a reasonable price. With its impressive catalog of functions,
this is the ideal sound card for gamers looking for quality on a reasonable budget.
o Gamesurround Fortissimo II
This card combines an ultra-powerful audio processor, hyper-realistic sound quality and all the best
software utilities users need to get the most out of their games, MP3 files, CDs and DVDs.
The Gamesurround Fortissimo II will satisfy even the most demanding customer, thanks to its many
diverse functions.
o Maxi Studio ISIS 
In February 1999, Guillemot Corporation created a new concept in the sound card domain by
launching the Maxi Studio ISIS. Occupying a new position within the market, this card offers a
home studio solution of exceptional quality to music industry professionals and amateurs alike.
Catering to those who want the freedom to create their own musical compositions, the Maxi Studio
ISIS is also more attractively priced than competing solutions.
Last September, Hercules presented its new line of sound products, including the XPS (eXtended
Personal Sound) line of speakers. This new range, composed of the XPS 510, XPS 210 and XPS 200
kits, allows users to boost their PC’s performance with speakers which provide stereo sound
reproduction of truly exceptional quality.
d)
Image peripherals
o Prophetview 720: Hercules’ new ultra-flat screen
In its quest for visual excellence, Hercules has blended the very latest technology with elegant styling
and exceptional quality to create its new third generation, ultra-flat screen monitor. With its truly
modern design, this 15 inch LCD monitor is built with the highest-quality components, making use of
the latest LCD technology to render perfectly fluid animation, an increased viewing angle and truecolor display.
o Dualpix: Digital camera with webcam
Unveiled at ECTS (London, September 2001), Dualpix is Hercules’ first digital pocket camera with an
integrated webcam, offering all of the functions of a PC camera, a camcorder and a high-end digital
camera.
Dualpix is portable, simple to use and produces photos of exceptional quality.
According to GFK, the marked growth in webcam sales may well result in sales in excess of 500,000
units in the French market in 2001. In the year 2000, 250,000 webcams were sold in France.
17
2)
Thrustmaster
Founded in 1992 and purchased by Guillemot Corporation in 1999, Thrustmaster has cultivated a
reputation for excellence in the field of design and development of flight simulation and sports and
auto racing accessories. Thrustmaster’s technological and business expertise enables the company to
offer a complete range of PC and console accessories for the video game market, including peripheral
devices developed under official license from Xbox. Thrustmaster accessories, marketed under
prestigious licensing agreements with Ferrari, Nascar, Top Gun and Xbox, as well as a close
collaboration with the US Air Force, continue to provide an increasing level of realism and new and
better sensations to both PC and console gamers. Thrustmaster has developed a complete and
innovative range of products for every console on the market: PS One, PS2, Game Boy Color, Game
Boy Advance, Gamecube and Xbox. Peripherals developed for the Xbox console benefit from the
official Xbox license, which greatly increased their visibility at the time of the new console’s launch.
Thrustmaster is continuing to expand its ranges of console-oriented products, developing innovative
offerings such as the Freestyler Board, which has received many awards from the specialized press, and
the Fitpad, a dance mat distributed for the console market by Sony and by Disney Interactive and
Packard-Bell for PCs.
Within the next three years, Thrustmaster aims to rank among the market leaders in the field of
multimedia gaming accessories.
Thanks to its two-fold expertise in the PC and console fields, Thrustmaster is in the rare and enviable
position of being able to take the best elements of each of these technologies and apply them to the
other. This enables the company to offer to all PC and console gamers products which are in a state of
constant improvement in terms of the level of realism and sensations they provide. This range of
highly innovative products offered by Thrustmaster only serves to reinforce the image of the brand
overall.
Thrustmaster’s range of products is divided into offerings for three different platforms:
a)
PC products
In autumn 2001, Thrustmaster presented its latest range of PC accessories with a variety of exciting
new functions. Integrating the most advanced technologies in the industry, these products allow
gamers to exploit those new functions and use them to best effect.
•
HOTAS (Hands on Throttle and Stick) Cougar ™
Result of a close collaboration with the U.S. Air force with respect to the training of its pilots, the Hotas
Cougar is a veritable replica of an American F-16 Block 52’s flight controls, representing a truly unique
piece of equipment within the field of flight simulation.
The new Hotas Cougar offers levels of power and performance never seen before in a gaming controller,
on both an electronic and a mechanical level.
With this first-rate joystick, all codes are entirely hardware-generated in order to ensure total
compatibility. Its metallic design provides optimal realism, guaranteeing durable performance and an
exceptional level of overall precision.
•
Tacticalboard™
Slated for a debut in spring 2002, the Tacticalboard is the first keyboard to actually help players
improve their performance in 3D and strategy games.
18
Equipped with a speech recognition system (Game Commander II) and communications software
(TeamSound), the Tacticalboard replaces the traditional keyboard and provides players with optimal
control over all aspects of gameplay and commands. Ideal for shortcuts and tactical movements, this is
truly the indispensable accessory for both strategy and 3D shooter games.
Aimed at PC gamers, the Tacticalboard is a new peripheral device specifically dedicated to video games.
With its HOMAB (Hands on Mouse and Board) concept, the Tacticalboard integrates both keyboard
and mouse functions to facilitate movements and access of different functions.
It takes the place of the traditional keyboard, providing gamers with optimal control over both
gameplay and all associated commands.
•
Force Feedback GT Racing Wheel under official Ferrari license
The Force Feedback GT Racing Wheel brings the Ferrari legend into the living room and offers the
best Force Feedback effects available (using TouchSense™ Immersion® technology). Its double
gearshift system, inspired by the both the Ferrari® 360 Modena and F1 racecars, provides ultra-realistic
driving sensations which, combined with the wheel’s rubberized texture, result in truly unsurpassed
ergonomics and handling in games.
The Force Feedback GT Racing Wheel features progressive acceleration and braking systems using
either the pedals or levers, guaranteeing formidable overall levels of control and precision.
•
Top Gun™ Afterburner™ Force Feedback Joystick
This new controller is the first Force Feedback joystick equipped with a detachable throttle system.
Built with two very powerful internal motors for extremely realistic Force Feedback effects, eight fullyprogrammable buttons, a multidirectional hat-switch and a removable life-size throttle, the Top Gun
Afterburner Force Feedback Joystick is clearly the ideal gaming companion.
b)
The new generation of consoles
Since 1999, under impetus from the Guillemot Group and thanks to its extensive experience,
Thrustmaster has been developing a comprehensive line of console accessories.
With Nintendo’s new Gamecube and Microsoft’s Xbox console competing against Sony’s PS2, console
sales are definitely on the upswing. Thrustmaster has put itself in a position to fully benefit from this
market growth by developing accessories for all three of these platforms.
Since announcing an impressive range of accessories for Microsoft’s Xbox last spring, Thrustmaster
has had the entire console market covered. Following the launch of its first three products in
November 2001 at the time of the console’s US launch, followed by two more in December,
Thrustmaster is planning further launches – for the Japanese and European markets – in spring 2002.
Thrustmaster was introduced by Microsoft at the Tokyo Game Show in mid-October, where offerings
by both companies were on display: Thrustmaster presented its Fox 2 Pro Joystick and 360 Modena
Xbox racing wheel, as well as Xbox versions of its Freestyler Board and Upad, while Microsoft showed
off its standard controller, memory card and video cables.
With three accessories available on the US market as of November 2001 and two more slated for preChristmas release, Thrustmaster is in a position to enjoy a very solid market presence indeed after its
European and Japanese launches in spring 2002.
The Japanese public, who came to visit the largest stand at the exposition in record numbers, had the
chance to test out Thrustmaster’s racing wheel and get a sneak preview of the company’s accessories
under license from Microsoft: 100,000 Thrustmaster catalogs were distributed in official Xbox bags.
The same kind of association exercise is taking place in Europe, starting with the Roadshow Xperience
in England (from November 2001 to March 2002).
19
Xbox Nascar racing wheels were also available for test-drives at stands where game publishers
presented their latest releases.
The following is a rundown of Thrustmaster’s offerings for all of the next-generation consoles:
•
PlayStation/PlayStation One/PlayStation 2
Thrustmaster is becoming ever more dynamic with regard to its latest PlayStation accessories,
particularly in the field of extreme sports simulations: its products are extremely highly-regarded by
their target audience, composed of hardcore fans of this new gaming genre.
Thrustmaster has even succeeded in integrating physical activity into the video game experience, thus
opening up an even larger customer base.
o Fightingarena™
At the E3 exposition (Las Vegas, May 2001), Thrustmaster unveiled its latest innovation, the
Fightingarena, a floor mat equipped with four infrared detectors which replaces standard joysticks
and keyboards in physical combat games. The first interactive accessory for fighting and boxing games,
the Fightingarena represents a revolution in combat gaming, thanks to its employment of infrared
technology: a photosensitive device detects even the very slightest movements made by gamers,
recreating them onscreen as punches and kicks directed against the player’s virtual opponents.
Currently only available for the PS2, this product will also be adapted for other platforms.
Carl Emery, the world kick-boxing champion, has been promoting this new controller and giving live
demonstrations at a variety of events.
o Freestyler™ Board
This controller, compatible with both PlayStation and PlayStation 2 gaming consoles, brings a whole
new dimension to skateboard and snowboard games; Thrustmaster has turned these sports into fullfledged indoor activities. Equipped with an inclination sensor specially developed to detect lateral
movements and an anti-slip surface allowing players to handle turns with maximum precision, the
Freestyler Board draws players right into the heart of the game by providing truly remarkable
sensations and interactivity. This controller – a star product of late 2000 – has also proved extremely
popular when presented at the latest exhibitions.
o Freestyler Bike
The Freestyler Bike is a handlebar controller for all biking (including motocross, scrambling, city and
rally biking) and jetski games (including sea-doo and ski-doo) for PlayStation®, PlayStation®2 and PS
One®, guaranteeing a new level of stimulation for gamers in search of increased realism in their sports
gaming activities.
The first and only handlebar controller on the market to support simultaneous tilting and turning, the
Freestyler Bike gives gamers the freedom they need to carry out even the most intense freestyle
maneuvers and skids. The controller is equipped with rubberized hand-grips for exceptional comfort
and control, plus a digital gearshift lever and analog brake and gas handles.
o 360 Modena Racing Wheel
A veritable replica of the wheel on the Ferrari 360 Modena racecar, this controller was developed with
exceptional attention paid to detail, the quality of the manufacturing process and, above all, comfort, in
the true Ferrari tradition. Whether mounted on a player’s knees or fixed to a table, this controller
makes it easier than ever to hit the turbo and beat competitors to the finish line. Thrustmaster’s 360
Modena is an exact replica of the highly-renowned Ferrari GT racing wheel, offering gamers
20
unprecedented freedom to play wherever they choose, whether seated comfortably in an armchair or
on a sofa, or with the wheel fixed to a table or desk for maximum stability. With progressive pedals for
progressive acceleration and breaking, six buttons for total gaming flexibility and two internal motors,
the 360 Modena is the racing wheel of choice for the Xbox.
o Firestorm Upad
Upad, Thrustmaster’s brand-new controller, has set the gaming world on its ear.
With its unique, original design and two rubber-coated handles, the Upad guarantees maximum
comfort in all aspects of gameplay.
o Fitpad ™
An original accessory developed by Thrustmaster, the Fitpad allows users to dance with some of their
favorite game characters. Designed in particular for the Jungle Book game, this dance mat is
distributed by Thrustmaster’s partners Ubi Soft, Disney Interactive and Packard Bell.
o Firestorm programmable gamepad
The last word in PC gamepads is now available for the Xbox.
Winner of many awards from both the general and specialized press, the Firestorm programmable
gamepad is now available to Xbox users, allowing them to take advantage of its programmability and
customizable configurations. Equipped with six action buttons, two analog triggers, two internal
motors for intense vibration effects, mini-sticks for unparalleled precision control and a slot for
plugging in a memory card or connecting to another peripheral, the Firestorm programmable gamepad
is, without any doubt, the most ergonomic controller available for the Xbox. Its programmability is
also a big plus for players of combat games.
o Fox 2 Pro™ Flightstick
Thrustmaster’s experience and expertise in developing PC joysticks are now paying off for console
gamers. Precision is the best weapon one can have in any flight simulation or aerial combat game, and
the Fox 2 Pro – with its rudder with twisting handle and lock mechanism, base-mounted throttle, ten
action buttons, 8-way hat-switch, internal motor with adjustable intensity and programming function
with integrated startup profiles for all of the most popular games – ensures that your enemies’ days are
numbered. This joystick has also been optimized for two upcoming Xbox hit releases.
o Freestyler Board
This board’s realistic design and integrated inclination sensor provide an incredible sense of realism to
thrill-seeking gamers. Control, efficiency and balance are the order of the day, thanks to the board’s
anti-skid surface and a controller optimized for single-hand use, providing easy access to all buttons.
An agreement has been signed whereby the Xbox-licensed Freestyler Board will be demonstrated in
conjunction with Microsoft’s Amped game as part of the Xperience campaign in England.
o 8MB memory card
The ability to save and transport one’s best games and high scores are among the 8MB memory card’s
most useful features. With this original design, Thrustmaster has even been able to integrate advanced
saving functions for some games.
21
•
Gamecube
At the ECTS trade show (London, 2-4 September 2001), Thrustmaster unveiled its line of accessories
for Nintendo’s next-generation console, the Gamecube, which was launched in mid-November 2001 in
the USA and will be released in Europe in March 2002.
Thrustmaster products were already in stores at the time of the US launch.
o Firestorm Powershock
With its extensive experience in developing gamepads, Thrustmaster is now turning its attention to
creating a range of controllers for Nintendo’s latest console: the Gamecube ™.
True to the Gamecube’s spirit, the Firestorm Powershock provides optimal gaming comfort, thanks
to its ergonomic design. The vibrations from its internal motor, combined with the precision of its two
mini-sticks and two analog triggers with digital action allow gamers to plunge right into the heart of the
game and experience sensations which are more realistic than ever.
With its advanced design (rubberized texture, metallic look) and technological innovations
(programmability, turbo button, etc.), the Firestorm Premium is destined to become the controller of
choice for gaming fans in search of both heightened sensations and improved performance.
o Nascar Compact wheel and Nascar Pro Victory
Thrustmaster has put all of its racing wheel know-how into developing accessories for Gamecube
players.
- The Nascar Compact wheel was launched in North America in mid-December 2001. Much more
than a simple gamepad, this wheel makes racing games far more realistic and fun than ever before,
thanks to its progressive pedals and levers, vibrating effects and ergonomic shape. Attractively-priced
with a compact design which fits in perfectly with the dimensions of the Gamecube console, the
Nascar Compact wheel is an ideal gift for all young North American Gamecube fans.
- The Nascar Pro Victory is set to arrive on the North American market at the beginning of 2002,
providing lovers of racing and rally games with an astonishing degree of realism and maximum gaming
comfort. With its bungee cord system, two vibrating motors for bump and shock effects, as well as
progressive levers and pedals, the Nascar Pro Victory also includes an innovative leg-rest, allowing
gamers to play in the comfort of their favorite couch or chair.
o Ferrari Challenge
To be released at the time of the Gamecube’s European launch in Spring 2002, Thrustmaster will offer
the Ferrari Challenge racing wheel for lovers of racecar gaming.
Cables
To enable gamers to get the most out of their consoles, Thrustmaster has produced a range of cables
for use with the Gamecube™ console. Link one Gamecube to another or to a Game Boy Advance, or
play games in home theater format with these optimized cables from Thrustmaster.
Storage and transportation accessories
Thrustmaster offers bags and CD storage solutions designed to meet the needs of all gamers.
22
c)
Portable consoles
•
Game Boy Advance
It was at the last E3 convention (May 2001, Los Angeles) that Thrustmaster announced its new line of
accessories for the Game Boy Advance, among which figured the WinBattery.
This battery (featuring a twenty-four hour lifespan) can be recharged at any time – even during gaming
– and its charge indicator helps to prevent unwelcome surprises. WinBattery also offers a highly
ergonomic design for total gaming comfort. Available from mid-October 2001, WinBattery is the ideal
accessory for the Game Boy Advance system.
The Move n’Play Bag – the first compact, ergonomically-designed, multi-use bag for gamers – is also
part of this range of accessories.
Thrustmaster, in collaboration with Ubi Soft Entertainment, plans to launch an entire range of
officially-licensed accessories for Rayman Advance, the third most popular game for the Game Boy
Advance system, ranking alongside the likes of Mario Kart and Super Mario Advance.
This range will include all of the essential accessories for gamers, such as the Rayman Light, the
Rayman 5 pack and more…
o Cheatcode S
True to its mission of providing gamers with all the tools they need to get the most out of their games,
Thrustmaster has decided to launch a range of gaming cheat-codes under the Cheatcode S brand name
for all consoles on the market.
23
Licenses and partnerships
Through strategic licensing agreements and partnerships signed with the holders of prestigious brand
names, Thrustmaster intends to reinforce its key values, such as an ongoing commitment to improving
the overall quality, prestige and reputation for excellence of its products, as well as its quest to remain
on the cutting edge of the latest technologies in its field. Maintaining these values will ensure that
Thrustmaster remains able to meet even the most exacting needs of members of the gaming
community.
Ferrari
In July 1999, Guillemot Corporation and Ferrari announced an exclusive worldwide licensing
agreement and, since autumn 1999, the Ferrari name and logo have appeared on Thrustmaster racing
wheels for both PC and consoles. As a result of this agreement, Guillemot Corporation and Ferrari
have been studying the design of new racing accessories in tandem, allowing Guillemot to firmly
position its products within the world of racing simulation with an emphasis on offering more and
better gaming effects to players.
A symbol of power, quality, engineering and technology, Ferrari has played a huge part in automotive
and racing history, and is poised to remain an industry leader in the future: the very name cannot help
but conjure up feelings of respect and admiration among car enthusiasts. The hallmarks of the Ferrari
name – competition, aggressiveness and a winning spirit – coupled with Thrustmaster’s years of
experience enable the company to offer the very best accessories on the market to auto racing and
Ferrari fans worldwide.
Nascar
Having purchased the Thrustmaster brand name, Guillemot Corporation became the beneficiary of an
exclusive North American licensing agreement for NASCAR® products. NASCAR (National
Association for Stock Car Auto Racing) is the most popular car racing organization in the United States,
enjoying the same degree of popularity as the Formula 1 championships in Europe. NASCAR also has
a large community of faithful, diehard fans who are constantly tracking developments in the sport and
among its drivers.
Thanks to the NASCAR license, Thrustmaster can deal directly with these fans, offering them a
selection of the very best in racing wheels.
Distributing Thrustmaster NASCAR-licensed accessories in the North American market enables the
Guillemot Corporation Group to successfully link the expertise associated with their own brand name
to the prestige enjoyed by all things NASCAR.
Top Gun
In March 2000, Guillemot Corporation and Viacom Consumer Products announced the renewal of
their Top Gun licensing agreement. Top Gun embodies the concepts of challenge, high performance
and personal achievement and, thanks to the reputation for quality enjoyed by Thrustmaster
accessories, joysticks distributed under the Top Gun license are able to offer the most realistic flight
simulation experience ever to gamers.
The Top Gun license is a perfect example of Thrustmaster’s expertise and know-how in the field of
flight simulation and 3D aerial combat accessories.
The Top Gun brand name is employed for a range of new joysticks, including the Fox 2 Pro and Fox 2
Pro Shock.
24
US Air Force
This license acquired by the Group stems from a partnership accord reached with the American
military. Guillemot Corporation signed a licensing agreement with the US Air Force relating to the
production of high-end flight simulation and combat mission controllers. These products incorporate
the HOTAS (Hands On Throttle and Stick) system used in American military aviation: this system
avoids the pilot having to let go of the controls in the middle of combat, allowing him to remain
focused on the mission at hand.
All of the main controls are located on the handle and throttle, so that the pilot does not have to
reposition his hands at critical moments: thus, he (or she) can concentrate on flight parameters, just like
under real conditions.
Thanks to this collaboration, Thrustmaster is able to provide gamers with controllers of exceptional
quality which are perfectly adapted to flight simulation, enabling them to attain to a truly unrivalled
level of performance in games.
A specific range of products marketed throughout the year 2001 has been developed especially for
hardcore gamers and flight simulation fans, for whom the Thrustmaster brand name is undisputedly the
last word in high-end accessories.
Official Xbox license
This licensing agreement, concluded in March 2001 with Microsoft®, allows Thrustmaster to design,
manufacture and distribute accessories for the Xbox console in the United States, Japan and Europe.
This agreement will enable Thrustmaster to bring its extensive experience and prestigious licenses with
Nascar, Ferrari, TOP GUN and the U.S. Air Force to this new platform, offering a unique range of
racing wheels, joysticks and gamepads under official Xbox license.
25
C.
Research and Development: product design and manufacturing
1)
R
Reesearch and Development based on the latest technologies
worldwide
The Guillemot Corporation Group has two Research and Development facilities (based in France and
Canada),
in
addition
to
a
technological
control
facility
in
Asia.
In Canada, Guillemot Research and Development will be moving into the Multimedia City in Montreal
during the course of 2002 and will become the Group’s main developmental center, with the goal of
employing 300 engineers by the year 2005.
Currently, approximately ninety engineers work directly for Guillemot Research and Development, in
constant interaction with all of the main players in the industry (Microsoft®, Intel®, NVIDIA®,
AMD®, Dolby®…). Research and Development spending amounted to FRF 25.7 M (EUR 3.9 M) for
the 2000/2001 financial year, representing 2.1% of consolidated hardware and accessory net sales.
Product design is overseen by the directors of the hardware and accessories departments, in
conjunction with engineers, project managers and marketing teams. They draw inspiration from newlyavailable technologies, market observation (requests from customers, advances in the computer
industry and the subject matter of interactive games, as well as the activities of their competitors) and
marketing opportunities. Product managers, responsible for developing new offerings, observe and
study market trends with great attention to detail: they then come up with new products to fill out
existing ranges. They have both marketing and technological know-how, in addition to a perfect
understanding of the interactive entertainment market.
2)
Research and Development divisions
Guillemot Research and Development is structured according to four areas of expertise (Hardware,
Software, Mechanical and Quality & Testing), allowing for the design and production of both hardware
and accessories.
The experience of the Group’s engineers in the fields of design, mechanics and programming plays an
important role in terms of the reliability and performance of products and has the additional effects of
optimizing production and lowering costs. For example, all PC accessories are designed to be installed
and run using a single software installation utility, which includes drivers and a universal interface.
Stages of accessory design and production
The design of an accessory requires approximately nine months and includes the following steps:
1) Defining functions according to market demand.
2) Starting with an idea, designers and engineers look at possible solutions, bearing in mind current
trends and ergonomics. This results in the creation of a prototype.
3) The next step is one month of sample testing, until such time as a definitive version is obtained.
This prototype study tests the longevity of products (through crash tests, etc.) and the quality of the
materials used, as well as their durability.
4) Designing a mold then takes anywhere between two and four months, depending on its complexity.
The accessory is then ready for production.
Accessories are manufactured in Asia, with particular attention paid to production standards.
Departmental directors, in conjunction with Guillemot Ltd’s Quality Assurance department in Hong
Kong, are in perpetual contact with production facilities and visit them regularly, where a variety of
employees are responsible for quality control and production engineering.
The company’s main production facilities are all ISO 9002 certified.
26
3)
Suppliers
The Group’s main suppliers for the electronic components of hardware and accessories are
STMicroelectronics, Samsung, NVIDIA, Hitachi, Hyundai, IBM Semiconductors, Philips, Toshiba and
Yamaha.
Manufacturing of the Group’s finalized and semi-finalized products is carried out by a variety of
assemblers – located for the most part in Asia (apart from the Group’s own facilities in Europe and
North America) – with whom it has worked for a number of years. The Group has ten or so partners
in Asia, with the result that assembly for a given product might be carried out by two or three subcontractors. Assembly services may also include the supply of certain components, according to the
production concerned.
The Group’s five leading suppliers account for roughly 38% of its purchases.
D.
Distribution
1)
Retail
The Guillemot Corporation Group is currently present in 17 countries and distributes its products in
more than 45 countries worldwide, including Germany, the United Kingdom, the United States,
Canada, Japan and China. Its clientele is composed of large chain stores, megastores and specialized
electronics stores with sections dedicated to computers and/or PC and gaming console applications.
The Group’s customers include:
(in Europe): Al Campo, Auchan, Bart Smit, Beatties, Carrefour, Cora, Corte Inglès, Dixons,
Electronics Boutique, El-Kjop, Exell, Extrapole, FNAC, Game, Game World, GB, Hypercor,
Karstadt, Kaufhof, Makro, Media Markt, Micromania, PC World, Promarkt, Quelle, Saturn,
Sonnae, Surcouf, Toys' R Us, Virgin, Vobis.
(in North America): Babbages, Sams, Best Buy, CompUSA, Microcenter, Electronics
Boutique, Fry's Electronics, Staples, Toys' R Us, Walmart...
With its products already on store shelves and integrated into new PCs by OEM system builders, the
Guillemot Corporation Group has developed another form of commerce: online sales.
An E-Commerce Department was established in France, offering new services to resellers:
http://shop.guillemot.fr is a website open to all computer distribution professionals, allowing them to
register orders which are then processed by the aforementioned E-Commerce department.
In this way, Guillemot Corporation is able to both improve the distribution of its products and meet
the needs of resellers through development of its business-to-business E-commerce operations.
Since June 2001, the general public has also been able to purchase Hercules and Thrustmaster products
via the Internet, thanks in large part to an agreement with GameLoft.com, which has established online
boutiques for each of the two organizations.
27
2)
•
OEM
What is OEM?
OEM stands for Original Equipment Manufacturer, and represents the market of PC integrators,
manufacturers and system builders who incorporate computer components and hardware into their
retail-ready machines, or those built according to the needs of their customers.
The Guillemot Corporation Group supplies finished products to these system integrators and builders
in industrial packaging; it does not, however, tend to the actual installation of these components in
systems, and thus is not involved in the assembling of PCs for third party customers.
OEM activities accounted for approximately 35% of total hardware sales for the financial year ended
August 31, 2001, as opposed to 65% for retail sales.
•
Development plan for the OEM market
The development plan for the OEM market, announced by Guillemot Corporation in February 2001 at
the CeBIT trade show held in Hanover, revolves around three major axes.
- In order to provide PC builders with both its products and a high level of general service, Guillemot
Corporation has created an internal department dedicated entirely to developing OEM activities
worldwide. This OEM service already includes offices in California and most Western European
countries, including Germany, France, the United Kingdom, Spain, Italy, Switzerland, Scandinavia,
Holland and Belgium. The development of this network of sales and international services enables the
Group to effectively deal with clients in an incredibly vast range of countries around the world.
- The Group’s technological savvy and commitment to providing its customers with first-rate service
combined with prestigious brand names are the key elements of the Guillemot Corporation Group’s
success in the field of retail sales. This same philosophy also applies to the OEM market: the Group
puts its entire range of highly-respected, award-winning products within the reach of its OEM clients
(Hercules for graphics, video and audio products, and Thrustmaster for accessories), thus allowing
them to increase the value of the systems they offer to the public. Moreover, licensed products –
which represent significant added value in the eyes of consumers – are also made available to the OEM
market: the Group offers Thrustmaster products under official license from Ferrari, Nascar, Top
Gun and the US Air Force. Computer builders are even able to develop marketing promotions by
working directly in conjunction with Guillemot Corporation.
- Through this department, Guillemot Corporation is developing programs dedicated exclusively to PC
assemblers. These programs enable OEM system builders to access not only a complete range of
products, but also a personalized technical support service, plus advice on the latest industry
developments, as well as specific marketing budgets and initiatives.
3)
Clientele
Guillemot Corporation is significantly developing its OEM activities and counts many major computer
builders and integrators among its clients: Olivetti in Italy and Spain; Vobis in Italy and Holland;
Scott, Peacock-Actebis and Maxdata in Germany (for the European market); Unika and Absolut in
France; Ingram Framework and Sky Computer in Holland; as well as all of the largest distributors:
Arrow in the US; C2000 in Germany; Actebis in Europe; Ingram in Germany, England, Holland and
Spain; Techdata in Scandinavia and (very soon) in France; and a variety of national distributors, such as
TWC-Bower in France; AGP in England; and Carre-Rieberro in Portugal. The OEM department is
28
also developing its activities in closely-related markets with very well-known clients (SHARP, Thomson,
Fujitsu Siemens, and Packard Bell) for both hardware and accessories, by associating its products with
theirs in order to offer cross-promotions.
High-end computer manufacturers are increasingly integrating more powerful graphics boards and
sound cards – as well as accessories – into their machines, in order to respond to continuing
developments in the gaming market. The OEM market thus represents a sector with enormous growth
potential, a fact which Guillemot Corporation has acknowledged through its implementation of an
international structure and a focused policy of supplying products to high-end PC integrators.
The diversity of its international operations and the various distribution channels used by the Group
(retail, OEM, online) allow it to divide its activities among a great number of clients. During the course
of this financial year, no one client accounted for more than 5% of the Group’s consolidated turnover.
4)
An international distribution network
Guillemot Corporation has a highly efficient international distribution network, composed of marketing
and logistics companies established in a variety of key countries.
An international sales and marketing network
Since 1994, Guillemot has established distribution companies in many different countries.
The Group is currently active in 17 countries, and distributes its products in a total of 45 countries
around the world.
The Group’s sales and marketing subsidiaries are directly responsible for sales, marketing and post-sales
service in their respective countries, as well as their sphere of influence. Product promotion is carried
out in large part by way of reviews in the specialized press: in the interactive entertainment market,
comparative testing provides a useful reference point for buyers. In order to sell products and acquaint
the public with all of the benefits the Group’s products offer, obtaining awards from the international
specialized press – both in print and on the Internet – is of the utmost importance.
Sales outside France amounted to FRF 1.23 B (EUR 187.5 M) for the financial year, compared with
FRF 1.02 B (EUR 155.5 M) for the previous year.
Integrated logistics operations
The Group’s worldwide operations span three major zones of activity: North America, Europe and
Asia. The flow of products and materials between these regions is carefully regulated and optimized,
notably by way of container shipments from Asia to the various countries in which the goods are
marketed.
Guillemot Corporation’s European packaging facilities are located in France.
The Group has a total of eight logistical bases in France, Germany, Spain, the United Kingdom,
Canada, the United States, Switzerland and Hong Kong.
Guillemot Corporation thus benefits from one of the most powerful and efficient networks for the
distribution of multimedia products in Europe, and is also making huge strides in this respect in both
North America and Asia.
29
E.
The interactive entertainment market
The unchecked growth of the interactive entertainment market – on which the Guillemot Corporation
Group’s activities are based – stems from the increasingly mainstream positioning of products offered
by different manufacturers in this sector.
New computer and digital technologies, as well as consoles and gaming software, are the elements
responsible for driving the market forward. The development of the digital photo industry and the
arrival of next-generation consoles at the end of 2001 is a perfect illustration of the strong growth
projected for the sector between now and 2005: the entertainment software market alone should see
worldwide sales grow from USD 17.7 B in 2000 to USD 26.7 B by 2005, a progression of more than
50%.
Evolution of the European and worldwide entertainment software markets
Evolution of the European and worldwide
entertainment software markets
in billions of $
30
26.7
25
17.7
20
Europe
15
8.8
10
Worldwide
5.7
5
0
2000
2005
Source: Screen Digest
Distribution of the entertainment software market
by geographic region in 2000
0,2
2,6
2
5,7
PC applications
3,2
3,2
Europe
4,3
USA
12
Japan
Console applications
World
Source : Screen Digest
In this extremely competitive market, technological mastery and proactivity are key elements of success,
as is having a number of strong brands in one’s possession, an international distribution network and a
good system of collaboration with all of the major players in the field.
Guillemot Corporation’s more than fifteen years of experience in the market have enabled it to make
the most of the rapid growth the industry has been enjoying: the Group now ranks 5th worldwide in the
interactive entertainment hardware and accessories sector.
30
1)
T
he PC market
Th
PC sales for 2001 declined in relation to the numbers for 2000, an industry first: according to the IDC
institute, volume sales were set to slide from 131.7 in 2000 to 129.6 million in 2001, representing a drop
of 1.6%.
As illustrated in the table below, the market is expected to pick up again in 2002 with volume sales set
to rise by an estimated 6.9% over the course of the year, and even more between 2003 and 2005, at
which time the number of units sold should surpass 190 million units per annum.
Annual
PC
sales
worldwide
In millions of units
Annual growth
2001
129.6
- 1.6 %
2002
138.6
+ 6.9%
2003
156.7
+ 13.1 %
2004
175.1
+ 11.7%
2005
191.2
+ 9.2%
Source: IDC, September 2001
In domestic markets, the number of households with a PC is continuing to rise in both the United
States and Europe, even if the increase was less marked than it has been in previous years. In the
United States, the percentage increased from 61% in August 2000 to 65% in September 2001, while in
France it amounted to 35.3% in the third quarter of 2001, as opposed to 32.3% in the first quarter.
2)
The PC hardware market
PCs sold domestically are offering more and more in terms of standard equipment, with complete
systems going for increasingly attractive prices; users who want to improve the performance or
functionality of their machines are obliged to look to the PC hardware and peripheral markets to do so.
Thus, an amateur movie-maker might add a digital video editing board to his system, whereas a gamer
might look at different game controllers and graphics boards, and a musician might opt for a complete
audio solution (hardware and software). Moreover, as performance increases, both games and
operating systems are becoming more and more demanding in terms of the hardware resources they
require, a factor which serves to promote growth in the PC upgrades market.
•
Graphics boards
Since the launch of the first models in the early 1980s, graphics boards have been in state of constant
evolution; so much so, in fact, that today they are one of the main elements of a computer system,
managing increasingly complex 3D effects greater efficiency than ever before. Developed for games
which are becoming more visually appealing and realistic, graphics boards enable gamers to significantly
increase both the level of comfort and the pleasure they derive from gaming.
There are two main categories of manufacturer in today’s graphics board market:
-
graphics processor manufacturers, such as STMicroelectronics, NVIDIA and ATI;
graphics board manufacturers (some of which also produce their own graphics processors),
among which the main players are currently ATI, Visiontek, Hercules
(a division of the Guillemot Corporation Group), Elsa, Matrox and Creative Labs.
•
Sound cards
Originally, these cards enabled users to listen to music and – more generally speaking – hear sounds
generated by their computers. The explosion of the gaming and DVD markets has led sound card
manufacturers to equip their products with audio functions of increasing sophistication, allowing for a
level of realism in handling 3D sound the likes of which has never been seen before.
31
Among today’s main manufacturers of sound cards are Creative Labs, Hercules (a division of the
Guillemot Corporation Group) and Terratec.
3)
The PC accessories market
The PC gaming accessories market is currently experiencing a very marked level of specialization: a
game gives rise to its accessories, so to speak. The pairings are becoming more specific and powerful:
racing wheel/racing games, joysticks/flight simulation games, gamepads/combat and platform games.
As a result, accessories are becoming increasingly dedicated to a particular segment of the gaming
industry, optimizing gameplay both in terms of ergonomics and technological performance.
In this context, the average number of PC accessories per household should increase with the
consolidation of the number of PCs in general use.
According to GfK, technological innovations (such as infrared and USB connections, improved
ergonomic designs, widespread use of force feedback), a relative drop in prices which has made chainstore distribution into a major market force, and the increased demand for computer equipment in the
French market should all contribute to high sales level during the course of the financial year.
The main manufacturers of PC accessories are Microsoft, ACT Labs, Gravis, InterAct, Logitech,
Madcatz and Thrustmaster (a division of the Guillemot Corporation Group).
4)
The console market
The launch of Sony’s PlayStation 2 at the end of 2000 represented the dawn of the first next-generation
game console. Aside from optimizing image quality and game fluidity compared to the previous
generation of consoles, the PlayStation 2 was also the first console to support DVD playback.
With nearly 18 million units in use at the end of October 2001, an announced 30% reduction in the
console price should bring this up to 25 million units by the end of 2001.
More and more consoles (as today’s consoles and consoles of tomorrow) are not only used for gaming
but also for offering features such as DVD playback, download of music in MP3 format and Internet
access.
In the portable gaming console domain, Nintendo has enjoyed great success with its Game Boy
Advance, launched successively in Japan, the United States and Europe starting in the spring of 2001.
In Japan alone, 600,000 units have been sold the first day.
Starting at the end of 2001, the console market is set to experience an unprecedented level of growth
with the North American launch of the very promising Xbox by Microsoft and GameCube by
Nintendo. While the Xbox – which provides a glimpse of what the video games of tomorrow might
look like – is aimed at the huge 15-35 age group market, the Gamecube – which is dedicated solely to
gaming – is being touted as the ideal gift for children between 6 and 14 years old. Gartner Dataquest
estimates that 49 million consoles will be sold in 2002, compared with the 29 million sold in 2001.
The Xbox is a next-generation video game console designed by Microsoft. With graphic performance
more than three times superior to that offered by recent systems, the Xbox allows game designers to
fully express their creativity by dreaming up fascinating, surprising (and sometimes maybe even
disconcertingly realistic!) games which are, most importantly, always fun to play.
32
Next-generation console sales – October 2001
PS2
PS 2
projections
(end of
2001)
Gamecube
France
750,000
1 million
2002 launch
Europe
4.1 million
7 million
USA
7.2 million
NA
Japan
Worldwide
6.5 million
17.8 million
12 million
25 million
Gamecube
projections
(end of
2001)
2002 launch
Xbox
Xbox
projections
(end of 2001)
Launch
forecast for
March 2002
2002 launch
2002 launch
Launch in March/April
2002 launch
2002
300,000 in the first two days 1.1 - 1.3
300,000 on
post-launch
million
launch date,
(launched Nov.18/01);
November 15
1.3 million units projected
by the end of 2001
300,000
1.4 million 2002 launch
4 million by March 2002
2.5 - 2.7
300,000 on
million
North
American
launch date,
November 15
2002 launch
1 - 1.5 million
2002 launch
1 - 1.5 million
(European and
Japanese
launches
scheduled for
spring 2002)
Sources: ITR News, Sony Corporation, Reuters – October 2001
33
5)
The console accessories market
The gaps between the launch dates of these next-generation systems have given rise to a wait-and-see
attitude in the console accessories market.
Since last June, however, the launch of the Game Boy Advance – the only new release anticipated for
the portable console market – and the Pokemon phenomenon have breathed new life into sales in this
sector: even the huge number of Gameboy consoles in circulation have regained some of their appeal
in the eyes of gamers, with the Gameboy Color offering more attractive pricing for those who want to
get in on the fun. Accessory sales have taken off as a result of this new craze, particularly with respect
to adapters and link cables.
Once all of the new systems have been rolled out completely, the home console market should
experience a similar surge in sales.
The performance of these systems opens vast new horizons for accessories that take realism,
interactivity and fun to the next level by making the most out of the very latest technologies.
The main players in the console accessories market – aside from the console manufacturers themselves
– are Madcatz, Interact, Saitek, Thrustmaster (a brand owned by Guillemot Corporation), Pelican, Big
Ben Interactive, Logitech and Spectra Video.
6)
The competition
Guillemot Corporation has developed a highly specialized niche for itself and, as a result, there is no
one competitor with such a diverse range of activities and interests: PC, consoles, hardware and
accessories, plus a solid presence in all of the main markets in the industry.
Its R&D expertise also enables the Group to get the most out of the real synergies that exist between
these markets.
A few words about the other major players in the markets in which Guillemot Corporation is involved:
Microsoft: this Seattle-based firm sells gamepads, joysticks and racing wheels for PC, generally equipped
with vibrational (force feedback) systems. Microsoft does not release sales figures for these types of
products.
Logitech: listed on the Nasdaq stock exchange, this Swiss company posted net sales figures of USD
761.4 M for the last financial year. Logitech is known primarily for its wireless mouse and keyboard
systems (products which are not exclusively entertainment-oriented) and also sells joysticks, webcams,
audio systems and racing wheels. Although its focus remains PC equipment, Logitech has made a few
ventures into the console market, as well.
Creative Technology Ltd: listed on the Nasdaq stock exchange, this Singapore-based company posted net
sales figures of USD 1.2 B for the last financial year. Having set a standard in the field of PC sound
solutions which has given rise to its privileged position in the market, Creative Technology is also
branching out into the image sector with lines of graphics boards and webcams. The company does
not currently manufacture accessories.
Interact: PC and console accessories division of the US group Recoton. Interact does not release sales
figures for this branch of its activities, but its market share in Europe has been declining in recent
months.
34
IV. GUILLEMOT CORPORATION’S DEVELOPMENT PLAN
The Guillemot Corporation Group’s goal is to become an industry leader in the world of interactive
entertainment, a field with truly extraordinary growth potential for the future.
A.
Developmental strategy
1)
Innccrease Research and Development efforts in order to
design products that gamers always want to have
Guillemot Corporation is pursuing its Research and Development investments both in France and in
Canada, where it is working in conjunction with the government of Quebec, in order to assemble one
of the best teams in the industry worldwide (Hercules and Thrustmaster already have a very significant
competitive advantage in this field). The international recognition of its Research and Development
teams has been demonstrated recently by way of new licensing agreements such as the one it has signed
with Microsoft for Xbox accessories, as well as its commercial and technological partnership with
STMicroelectronics.
2)
Maximize the value of product lines through a policy of
strong brands and the acquisition of prestigious licenses
Guillemot Corporation will continue to maintain strong brands, a policy which has enabled it to rapidly
increase sales. The acquisition of Thrustmaster and Hercules, two brands recognized for their
expertise in their respective areas, offers Guillemot Corporation attractive opportunities: increased
store referencing, a strong reputation, and capitalization of its expertise and international recognition.
At the same time, the acquisition of licenses provides added value to product ranges. For its customers,
prestigious licenses such as the ones it holds for Ferrari, Nascar, Top Gun and US Air Force
products represent an investment in quality and reliability. These licenses also represent an
indispensable competitive advantage, enabling the Group to distinguish itself in the interactive
entertainment market. Guillemot Corporation envisions entering into new partnership and licensing
agreements in order to maximize the value of its product ranges.
3)
Increase market share in all major markets in order to
become the reference point in each business segment
This year, Thrustmaster was among the top three PC accessory companies worldwide – ranking
alongside the likes of Microsoft and Logitech – and is projecting sustained growth in its console
accessory sales during 2002. For its part, Hercules ranked first among European graphics board
manufacturers and second worldwide for sound cards, behind Creative Labs. Both Hercules and
Thrustmaster are making good progress in most major markets around the world, in order to take
possession of the greatest possible stake in a market which is expected to become ever more lucrative
in the years to come.
35
B.
Group performance for the financial year ended August 31, 2001: actual
versus forecast results
1)
Statement of income notes
Condensed consolidated statement
of income (FRF K)
NET SALES
OPERATING INCOME (1)
NET FINANCIAL EXPENSE
INCOME BEFORE TAXES
CONSOLIDATED NET INCOME
(1) including R&D amortization
a)
31/08/2001
Actual
1 560 153
73 047
-46 676
26 371
15 766
7 706
31/08/2001
Forecast
1 600 000
89 882
-10 868
79 014
55 345
8 178
Net sales evolution:
The Guillemot Corporation Group reached 97% of its net sales objective, a forecast issued prior to the
slowdown which affected Western economies over the course of the year.
The Group’s markets were especially affected by hesitation on the part of consumers in the context of
transition in the gaming console market, with two new systems slated for winter release. The
slowdown of PC sales also had an impact on the hardware market.
The Group’s performance is due to the aggressiveness of its sales and marketing teams and the strong
reputation of its Thrustmaster and Hercules brands: the Group’s market shares improved in a variety of
markets (sources: GfK, Chart Track, JPD).
b)
Operating income:
Operating income increased this year compared to the previous financial year.
When examining the figures forecast for the year, it should be noted that the lifelessness of the markets
in which it is involved had an impact on the Group’s profitability.
The main variations with respect to the forecast results consist of:
The gross profit margin amount: the expected rate was achieved, but the overall value was lower than
the projected figure;
Salary expenses, reflecting a significant investment in human resources, particularly in the fields of
purchasing, marketing and sales: this investment was undertaken both in order to defend the Group’s
territory and to enable it to conquer new ground in a more difficult market context.
c)
Net financial expense:
The Group’s net financial expense at August 31, 2001 is clearly a great deal lower than projected. This
came about as a result of:
- Exchange rate losses recorded as a result of unfavorable fluctuations in foreign currency exchange
rates and notably, in the American Dollar's exchange rate;
- Provisions for depreciation on investment shares held by the Group in startup companies based on
technological innovations, particularly in the fields of mobile telephony and new information
technologies;
- Interests paid were greater than anticipated, due to working capital requirements which exceeded
expectations.
36
Moreover, the forecast took into account unrealized Forex gains not applied at August 31, 2000. As a
result of the application of new regulation 99-02, this amount – totaling FRF 7.5 M – went directly to
opening reserve changes.
d)
Net exceptional income:
Net exceptional income was greater than projected as a result of the sale of goodwill relating to
software distribution in Switzerland during the course of the financial year, an event not foreseen at the
time the forecast was issued.
e)
Corporate income taxes:
The Group’s corporate income tax rate was affected by the sharing out of net income among its
various subsidiaries.
f)
Consolidated net income:
The Group’s consolidated net income for the year amounted to FRF 15.8 M, the result of the financial
elements detailed in its statement of income and their respective financial impacts.
2)
Balance sheet comments
CONDENSED BALANCE SHEET
(FRF K)
ASSETS
Goodwill
Other intangible assets (1)
Tangible fixed assets
Financial fixed assets
31/08/2001
Forecast
31/08/2001
Actual
Total fixed assets
9 751
255 648
50 152
90 000
405 551
9 749
247 733
70 034
49 333
376 849
Total current assets
832 909
767 852
1 238 460
1 144 701
29 543
474 986
65 984
55 345
820
30 187
503 458
-36 906
15 766
0
626 678
512 505
6 200
195 954
15 000
394 628
7 591
373 427
9 876
241 302
611 782
632 196
1 238 460
50 629
1 144 701
49 668
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
Share capital
Share premiums - issuance and conversion
Reserves
Consolidated net income
Government grants
Total
Provision for liabilities and charges
Financial loans
Current accounts
Other liabilities
Total
TOTAL
(1) including Research & Development costs (gross)
37
a)
Fixed assets:
Tangible fixed assets balance increased in relation to the amount forecast, due to the purchase of a
building by the Group’s Swiss subsidiary and investments in computer equipment which were greater
than anticipated.
The financial fixed assets balance did not increase as projected, as the Group halted investments in
technology-based startup companies.
b)
Current assets:
Current asset balances were higher than forecast as a result of inventory levels at closing, particularly
with respect to items still in the manufacturing stage.
c)
Shareholders’ equity:
Bond conversion into shares resulted in an increase in the Group’s share capital and issuance premiums.
Compliance with consolidation standards resulted in the decrease of equity of FRF 107 M equivalent to
the own shares held by the company.
d)
Financial loans and other liabilities:
Discrepancies between the forecast and actual values of financial loans and other liabilities balance each
other out.
e)
Current accounts:
The shareholders have maintained bearing current accounts in companies within the Group.
38
3)
Consolidated cash flow statement
31/08/2001
Forecast
Cash and cash equivalents basis (in K €uros)
Uses:
Fixed asset investments
Intangible fixed assets
Unallocated expenses
Total
Changes in working capital requirements
Cash flow from operations
Current account payments
Financial loan payments
Dividend payments
Acquisition of mother company shares
Total uses
31/08/2001
Actual
29 180
15 495
12 815
1 558
59 048
34 674
45 204
352
0
80 230
59 225
3 072
0
22 299
0
64 377
2 892
0
107 471
277 269
121 345
Sources:
Fixed asset disposals
Financial loan receipts
Share capital and premiums increase
Subsidiary acquisition-disposal
Government grants receipt
Total sources
Excess of uses over sources
58 311
35 925
50
0
0
189
94 475
13 023
0
59 662
183 476
0
0
0
256 161
-26 870
-21 108
a)
Fixed asset investments:
These balances are significantly higher than forecast as a result of investments carried out in order to
increase efficiency and profitability (property – a building in Switzerland, in particular; equipment;
information systems) which were greater than projected.
b)
Change in working capital requirements:
Cash flow for working capital requirements was higher than forecast, due to the optimization of
financial purchasing conditions and the amount of inventory still in production at the end of the
financial year.
c)
Cash flow sources:
The Group made use of bank financing in order to meet its business needs, while seeking to optimize
financing costs.
39
C.
FORECAST NET SALES FOR THE YEAR: FORECASTED
FINANCIAL IMPACT OF DEVELOPMENTAL STRATEGY
1)
P
Prro forma condensed consolidated statement of income
Pro forma condensed consolidated
statement of income (EUR K)
31/08/2001
Actual
Net sales
Operating income (1)
Net financial expense
Income before taxes
(1) including R&D amortization
2)
31/08/2002
Forecast
237,844
11,136
-7,116
4,020
2,404
1,175
192,086
6,621
-6,250
371
101
2,496
Pro forma condensed consolidated balance sheet
BALANCE SHEET (EUR K)
31/08/2001
Actual
ASSETS
Goodwill
Other intangible fixed assets (1)
31/08/2002
Forecast
Total fixed assets
1,486
37,767
10,677
7,521
57,450
1,399
39,201
10,232
7,521
58,353
117,058
105,850
174,509
164,203
4,602
76,752
-5,627
2,404
4,602
76,752
-3,223
101
78,131
78,232
1,157
56,929
1,507
36,786
1,479
52,250
1,458
30,784
96,379
85,971
174,509
7,572
164,203
11,353
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
Share capital
Reserves
Total
Provision for liabilities and expenses
Financial loans
Current accounts
Other liabilities
Total
TOTAL
(1) including Research and Development costs (gross)
40
3)
Pro forma condensed consolidated cash flow statement
31/08/2001
Actual
Cash and cash equivalents basis
Uses:
Fixed asset investments
Unallocated expenses
31/08/2002
Forecast
5 286
6 891
54
0
12 231
4 285
1 338
0
0
5 623
Current account payments
Financial loan payments
Dividend payments
Acquisition of mother company shares
Total uses
3 399
0
9 814
441
0
16 384
42 269
0
0
48
9 957
0
15 628
Fixed asset disposals
Financial loan receipts
Share issuance (share capital and premiums)
Subsidiary sale-acquisition
Government grant receipts
Total sources
1 985
0
9 095
27 971
0
0
0
39 051
2 259
6 162
0
7 500
0
0
0
15 921
Excess of uses over sources
-3 218
293
Total
Sources:
Assumptions
This development plan was prepared from forecasts made on an individual national level based on
performances achieved to August 31, 2001 and prospects for future growth. These forecasts were then
consolidated to prepare the overall development plan.
The principal assumptions are described hereafter. They take into account the decisive ending of
software distribution activities, projected market situations and market share growth.
Fixed assets and R&D depreciation/amortization
Capitalized Research and Development costs are accounted for as intangible fixed assets.
These costs are amortized from a given product’s projected marketing date, for a period between 12
and 36 months.
A straight-line basis is employed for depreciation and amortization. The Group estimates that
Research and Development investments will represent 2% of its net hardware and accessory sales for
the 2001-2002 financial year.
Tangible fixed asset investments are expected to be less than the amortization payments to be paid out
over the course of the year.
Tangible fixed assets are amortized on a straight-line basis over a period of 3 to 10 years (20 years for
buildings).
41
Working capital requirements
The different working capital item balances have been evaluated based on inventory objectives.
Financial loans
The Group has undertaken medium-term financing from a variety of financial institutions.
Net sales
The Group’s developmental strategy is described at length in this document:
- Increased penetration of major world markets through increasing the Group’s share of the
markets in which it is currently active.
- Pursuit of a policy of maintaining strong brands and signing prestigious licensing agreements.
- Development of a complete, high-quality line of products.
- Seizing opportunities in new markets.
The interactive entertainment market, in which the Group is active, is in a state of rapid change; details
have already been provided in the preceding chapters of this report.
Thus, the Group anticipates hardware and accessories net sales growth of 5% during the 2001/2002
financial year, compared with the preceding year.
As a result of the impact of the ending of software distribution activities, the Group anticipates a
decrease in net sales of approximately 20% for the financial year ending August 31, 2002.
Personnel expenses
Personnel expenses have been defined according to the evolution of the workforce and employees of
companies within the Group.
Operating income
The Group’s gross margin should increase during the course of the financial year. The Group will
benefit from the ending of software distribution activities, which generated gross margins lower than
those resulting from the production and marketing of hardware and accessories.
Taking into account the expected decrease in net sales, the Group projects operating income to amount
to approximately 3.5% of its net sales figure.
Working capital requirements will be financed by short-term financing measures such as receivables
factoring and bank overdrafts.
Interest expenses and financial loan redemption premium amortization also have an impact on the net
financial expense.
In its projections, the Group has taken into account the effects of foreign exchange losses which may
result from purchase coverage not affected as of August 31, such as those resulting from off-balance
sheet commitments.
Corporate income taxes
Estimated income taxes correspond to income taxes expected to be levied on companies which have
no deferred losses.
The Group anticipates its consolidated net income for the 2001-2002 financial year to be positive.
42
D.
CONSOLIDATED NET SALES FOR THE FIRST QUARTER OF THE
2001/2002 FINANCIAL YEAR
First quarter (EUR M)
September 1 - November 30, 2001
2001/2002
52.8
2000/2001
86.3
The Guillemot Corporation Group’s consolidated net sales figure for the first quarter of the 2001/2002
financial year, made public on January 10, 2002, amounted to EUR 52.8 M, compared to EUR 86.3 M
for the first quarter of the preceding financial year.
At the time of this announcement, the Group renewed its estimation of net sales for the year at EUR
192 M.
43
V. RISK ANALYSIS
A.
Industry risk
1)
T
Teechnological risk
Guillemot Corporation uses the latest technologies to manufacture its product ranges, each product
making use of different types of technologies.
The Group’s Research and Development engineering teams monitor technological developments
closely so that the Group’s upcoming products incorporate the most up-to-date features.
Research and Development teams based in Europe and North America, aided by the Group’s
technological intelligence center in Hong Kong, are in constant direct contact with the market’s major
players (Microsoft®, Intel®, AMD and the development studios of the major gaming software
publishers).
Technological evolution therefore represents an opportunity for the Group, enabling it to develop new
products and markets.
Guillemot Corporation also has access to further technical expertise in the area of new technologies
through its Guillemot Ventures ownership stakes.
2)
Procurement risk
Dependence on certain suppliers
The risk of dependence on suppliers varies according to the technical nature of the product.
For mid-range and standard products, the Group’s risk is very limited, as these products depend on
technologies available to many manufacturers of electronic components whose technology levels are
becoming more and more homogeneous.
The Group has maintained business relationships with many of these manufacturers for several years,
and represents an attractive sales opportunity for them.
For highly technological products dependent on the technology of a single component, Guillemot
Corporation has striven for many years to strengthen its collaboration with manufacturers by
developing
its
expertise
in
the
implementation
of
new
technologies.
The reputation for performance developed by the Hercules and Thrustmaster brands has made
Guillemot into a topflight partner for technology developers, and increased volumes have helped to
strengthen these partnerships.
Concentration and alliance of companies
The interactive entertainment industry has experienced company takeovers and alliances over
the past few years.
Guillemot Corporation has been an active player in this environment through its acquisitions.
Should a change of control occur regarding one of its preferred suppliers, the Group is in a position to
make alternative successful procurement alliance arrangements.
44
B.
Competition risk
1)
Innd
dustry competition risk
The Group has operated in the interactive entertainment market for many years with the same
competitors and is extensively aware of their activities. Its competitors are primarily American
companies with operations located worldwide. The Group’s products compare very favorably with
those of its peers and benefit from a reputation for quality earned by way of awards and first place
rankings in comparative tests by the industry media in both Europe and the United States.
The establishment of the Group’s distribution network in all the world’s major markets provides it with
excellent distribution access. Guillemot Corporation’s distribution network in North America was
significantly strengthened through its acquisition of Thrustmaster and Hercules, and the Group’s products
are now present in the majority of European and North American chain stores.
Guillemot Corporation’s increase in international sales is proof of the Group’s ability to gain market
share from its competitors.
2)
PC manufacturers competition risk
Entry-level PCs, delivered in the most economical and competitive configurations, have resulted in the
rapid growth of the number of PCs in circulation. Subsequent to purchase, some customers complete
the minimum configuration of their PCs according to their desired usage: Hercules hardware products
and Thrustmaster accessories sold in stores respond to the needs of these customers.
Top-of-the-line PC manufacturers incorporate specialized peripherals in the original configuration of
their PCs, and look for high-performance recognized brands. The Guillemot Corporation Group
answers their needs with its technical expertise and quality brands, thereby increasing its OEM market
sales in a highly efficient manner.
C.
Financial risk
1)
Business seasonality risk
The Guillemot Corporation Group realizes two-thirds of its total net sales in the first half of its
financial year.
The Group employs the services of sub-contractors and temporary personnel in order to operate
successfully at increased manufacturing and distribution levels during that period of time.
Short-term working capital needs caused by these seasonal fluctuations are financed by way of short
and medium-term funding.
2)
Foreign exchange and interest rate risk
As all of the major players in the multimedia industry conduct transactions in US dollars, there is no
competitive advantage between one manufacturer and another translating into increased market share.
Hence, there is no net sales sensitivity to foreign exchange fluctuations.
As a result of the indexation of sales prices to dollar cost prices by all players in the industry, sales
prices are either increased or decreased as a function of overall resale prices.
The main currency for hardware and accessories purchases is the US dollar. In the United States,
Canada and all other countries outside of Europe, the transaction currency is also the US dollar.
45
In Europe, the Group has not made any long-term commitments and regularly adjusts its sales prices
according to the value of European currencies in relation to the US dollar.
The Group has increased its foreign exchange coverage policy in order to minimize the impact of
variations in the value of the US dollar during its sales cycle (from the initial order to payment).
The Group regularly reviews the conditions of its short and medium-term loans: it does not hold any
long-term variable rate loans for amounts which might expose it to significant risk in the event of a
change in rates. So far, the company has not undertaken any interest rate coverage initiatives.
3)
Customer risk
In spite of the recent mergers, the multimedia market still remains fragmented in all countries. The
Group sells its products in 45 countries, with no one customer accounting for more than 5% of its
consolidated net sales. The diversity, number and rigorous screening of customers contributes to the
reduction of customer risk.
The Group uses the services of factoring agents in all European markets to reduce its uncollectable
trade accounts receivable risk there.
D.
International development risk
1)
Workforce growth risk
The development of the Group’s international operations is achieved through the establishment of
companies directed by managers who have significant previous high-level experience, and through the
recruitment of professionals with an excellent understanding of local market conditions.
2)
Information communication risk
The development of the Group is accompanied by the implementation of communication systems in
order to ensure that growth is effectively monitored. The Internet allows for real-time communication,
enabling the rapid sharing and distribution of information to decision-makers.
Reporting systems have been put in place to ensure the consistency and clarity of information.
E.
Other risks
1)
Euro currency risk
All commercial transactions can be denominated in the Euro currency. The Group transferred
accounting operations for all Euro zone countries into the currency as of September 1, 2001.
2)
Asset operations risk
The Guillemot Corporation Group owns all of the assets necessary for its operations.
3)
Asian risk
Asia accounts for less than 5% of the Group’s net sales. Thus, the Group’s exposure to any worsening
in the economic climate there is mitigated.
46
Partner sub-contractors located in different Asian countries undertake the core of the Group’s
manufacturing. Some of these partners have operations located worldwide, thereby distributing the risk
to different zones.
4)
Ubi Soft Entertainment Group business relationship risk
The Guillemot Corporation ceased its software distribution activities as of August 31, 2001.
The Guillemot Corporation Group provides distribution services to the Ubi Soft Entertainment Group,
accounting for less than 3% of net sales.
The terms and conditions under which these transactions occur at arms-length.
5)
Exceptional events and litigation risks
The Group is not currently aware of any exceptional litigation activities which have had or could
potentially have a significant impact on its operations, financial condition, financial results or its
safeguarding of shareholders’ wealth.
The Group is paying very close attention to the evolution of its markets in the wake of the events of
September 11.
Guillemot Corporation shares were not spared by the ensuing stock market slump: on December 3,
2001, its shares closed at EUR 21.
47
VI. GLOSSARY OF TECHNICAL TERMS
3D accelerator
Specialized processor for 3D operations giving new relief to games, thus rendering them more fluid and
playable: the computer can devote nearly all of its resources to game interactivity, as it does not have to
deal with graphics processing.
Video capture board
System enabling display of a video signal (TV, game console, VCR/camcorder) on a monitor and
digitization of the video signal so that images or video can be stored on the computer.
Graphics board
PCI or AGP extension card essential to a computer’s operations.
Graphics boards enable data display on a monitor or other type of screen: displays are generally in 2D,
but may also be in 3D or video formats.
Sound card
Card enabling processing of sound from different sources (CD/DVD player, microphone, musical
instruments) and playback via speakers.
Video card
Electronic circuit allowing a screen to be connected to a computer. Different cards support specific
image resolutions and depths.
CD (Compact Disc)
Digital standard including all laser-based compact disc formats: CD-ROMs (CD-Read Only Memory),
which contain computer data; audio CDs, which contain music; Video-CDs, which contain movies;
CD-Rs (CD-Recordable), which are recordable; and CD-RWs (CD-ReWritable), which can be recorded
and then re-recorded. CDs generally have a capacity of approximately 660 MB.
Chip
Term frequently used to designate any memory or microprocessor type of integrated circuit.
The processor is the real brain of a computer, processing and circulating data within the system. The
faster data is circulated (expressed in MHz), the more powerful the computer is judged to be.
DVD (Digital Versatile Disc – formerly Digital Video Disc)
Digital medium which physically resembles a CD, but offers up to 40 times more storage capacity.
DVDs outperform CDs thanks to their greater storage capabilities, as well as their improved video and
audio quality. DVD has thus far been regarded primarily as a digital medium for movies (Video DVDs),
but the format is also used as a computer data medium (for DVD-ROMs). PCs equipped with a DVDROM drive can read CD-ROMs and DVD-ROMs, plus Video DVDs (with an additional MPEG2 card
installed).
DTS (Digital Theater System)
An encoding format similar to Dolby Digital, DTS offers cinema-quality sound with a minimum of six
discrete audio channels.
HUB
Device allowing additional USB ports to be added to a computer (most come with two ports as
standard equipment), thus facilitating the simultaneous connection of a number of USB peripherals
such as a mouse, keyboard, speakers, gamepad/joystick, scanner, digital camera/webcam and more.
48
Hard-core gamer
Title used to refer to video game enthusiasts who spend significant sums of money on gaming and
much of their time refining their skills.
LCD (Liquid Crystal Display)
Generic term used for any liquid crystal display device. Laptop computers use these screens because
they are energy-efficient and extremely flat, as this type of technology does not make use of cathode ray
tubes.
OEM (Original Equipment Manufacturer)
Term used to designate the overall market of PC integrators, manufacturers and assemblers who
integrate computer hardware and components into their retail-ready machines, or those built to
according to the customer demands.
Peripheral
Term used for all hardware items connected to a computer, such as a monitor, keyboard, modem,
speakers, CD-ROM drive, printer etc.
PCI (Peripheral Component Interconnect)
Communication channel between a computer’s central processor and its peripherals (graphics board,
sound card, hard disk controller, etc.) via a data channel referred to as a bus. There are four main types
of bus in today’s PCs: ISA (for Industry Standard Architecture, the oldest format); PCI; AGP; and USB.
Peripherals are connected to a bus via a connector called a Slot, which has a specified format according
to the type of bus to which it provides access; by extension, cards which connect to ISA, PCI or AGP
slots are referred to as ISA, PCI or AGP cards. A PCI bus offers transfer speeds 26 times greater than
that provided by an ISA bus.
PDA (Personal Digital Assistant)
Pocket mini-computer – such as Apple’s Newton, Motorola’s Marco, or Psion – halfway between a
portable computer and an electronic agenda. More and more computer builders are now offering
PDAs making use of the Windows CE operating system (a light version of Microsoft Windows),
making PDAs veritable, functioning pocket computers.
PlayStation 2
Game console with a 300 Mhz microprocessor, 38 MB of memory, 3.2 GB/sec memory transfer rate, a
*2t DVD player and an 8 MB memory card.
Plug and Play
Standard used to designate a recognition system allowing a PC to automatically identify an added piece
of equipment and start up the installation procedure so that the item in question can be used
immediately.
Quake-like
Combat or shooting game whereby a player takes on the character’s viewpoint, navigating through a
3D universe in which he or she encounters obstacles and confronts and battles enemies.
Retail
Term used to designate any product sold independently in stores, with packaging and instructions for
use (as opposed to OEM).
49
Force Feedback
In the past, dynamic gaming peripherals were only found in arcades, owing to their prohibitive cost.
Today, Force Feedback peripheral devices such as racing wheels, joysticks and even gamepads allow
players to actually experience some of the sensations involved in car racing or a plane’s forced landing,
for example, in the comfort of their own home; moreover, the sense of realism provided by the diverse
functions of the motors integrated into such systems allow users to get more involved in their games
and derive greater enjoyment from them. This technology enables gamers to completely immerse
themselves in a 3D universe in which otherwise innocuous events are suddenly transformed into
veritable physical challenges. Feeling the force of the wind and tremors in the earth hindering one’s
progress certainly makes gaming all the more realistic and impressive!
Scanner
Peripheral device which renders digital images by way of electronic scanning: scanners digitize
documents and transform them into image files. Scanners are equipped with painting/image
manipulation software, allowing users to work with the images they produce, as well as OCR (Optical
Character Recognition) software, enabling them to convert physical, printed documents into electronic
text files.
USB (Universal Serial Bus)
External bus with a transfer speed of 1.5 MB per second, used for connecting external peripheral
devices (gamepad, speakers, scanner, mouse, keyboard, etc.) to a computer.
Webcam
Digital camera which can be connected to a computer. First used primarily for broadcasting images via
the Internet, vast improvements in image quality have resulted in such devices also being used for
photographic applications.
50
♦
ENERAL IINFORMATION
NFORMATION A
BOUT T
HE
♦G
GENERAL
ABOUT
THE
C
OMPANY A
ND IITS
TS SSHAR
HARE
APITAL
RE C
COMPANY
AND
CAPITAL
51
I. GENERAL INFORMATION ABOUT THE COMPANY
Company name
Registered office
Place de l’Etoile, 56910 Carentoir (France)
Legal form
Public limited company with a Board of Directors, governed by the Commercial Code and the decree
of March 23, 1967 regarding commercial companies.
Nationality
French
Creation date and duration
Formed on September 1, 1997 for a period of 99 years until November 11, 2096, unless otherwise
extended or earlier dissolved.
Company purpose (Article 3 of bylaws)
The design, creation, production, editing and distribution of multimedia, audiovisual and computer
products, particularly with regard to multimedia hardware, accessories and software.
The purchase, sale and, in general, trading in all forms including import and export, by lease or
otherwise, of multimedia, audiovisual and computer products, including those focused on image and
sound reproduction.
The distribution and marketing of multimedia, audiovisual and computer products via all media,
including new communication technologies such as computer networks and online services.
Consulting, assistance and training relating to any of the areas mentioned above.
The involvement of the company in all operations relating to its mandate, whether in the form of the
creation of new companies, the subscription or purchase of shares or rights, mergers or otherwise.
In general, all operations relating either directly or indirectly to the aforementioned mandate or to
related or similar objectives facilitating the company’s development.
Registration of the company
414 196 758 R.C.S Vannes
APE code: 516 G
Review of company documents and minutes
Company bylaws, accounts and reports, as well as General Meeting minutes, are available for review at
the company’s registered office.
Financial year
The company’s financial year begins on September 1 and ends on August 31 of the following year.
General Meetings (Article 14 of bylaws)
General Meetings include all shareholders of Guillemot Corporation SA other than the company itself.
Meetings are convened and held in accordance with the conditions stipulated in the Commercial Code.
General Meetings are held at the company’s registered office or at any other location indicated in the
meeting notification.
52
They are presided over by the Chairman of the Board of Directors or, when unavailable, by a Director
designated by the General Meeting.
Every shareholder has the right, upon proof of identity, to participate in General Meetings, whether
through personal attendance, submission of a completed ballot form or proxy designation, on
condition of:
- nominative registration in the company’s register, in the case of holders of nominative shares or
voting rights certificates;
- a certificate delivered by proxy, to the locations referred to in the meeting notification, stipulating
their unavailability recorded in the account of the General Meeting, in the case of holders of bearer
depositary shares.
These conditions must be met at least five days prior to the date of the General Meeting.
Access to Ordinary General Meetings is denied to holders of less than ten shares.
Shareholders with less than ten shares may unite for the purpose of representation by one of them if
they hold ten shares or more collectively.
At all General Meetings, the voting right attached to shares carrying a right to income is exercised by
the person with a right to said income.
Double voting rights (Article 8 of bylaws)
A double voting right is conferred, pro rata to their percentage of share capital, upon all unencumbered
shares which have been held in nominative form for a period of two years or more by the same
shareholder, as recorded in the company’s register.
This right is also conferred, from the moment of issuance in the event of a share capital increase by
incorporation of reserves, profits or share premiums, to nominative shares freely attributed to a
shareholder as a result of past actions for which he/she benefits from this right.
Double voting rights cannot be conferred retroactively.
Treasury stock purchases
The Combined General Meeting of December 21, 2000, after publication of an information notice
approved by the Commission des Opérations de Bourse (visa n°00-1924, granted November 29, 2000),
authorized a treasury stock purchase program amounting limited to 10 % of the share capital, in order
to stabilize the company’s share price on the stock exchange, hold or release purchased shares
(particularly in the context of external growth initiatives), hold and dispose of acquired shares, and to
confer stock options to personnel and/or directors of the company and/or its subsidiaries.
Treasury stock can be purchased, sold or transferred via all means allowed by the regulated market and
by agreements, and in particular via block transactions without volume limitations. These methods
include the use of all financial derivative instruments that can be transacted on the regulated market, as
well as by agreement. These transactions may be undertaken at any time, in accordance with the
regulatory measures in effect at that time.
The maximum purchase price and minimum sale price will be EUR 94 and EUR 54, respectively.
This authorization was granted for a period of eighteen months from the General Meeting of
December 21, 2000 and will expire on June 21, 2002.
The number of treasury shares that may be acquired cannot exceed 10% of the total number of shares
of which the company’s share capital was comprised at the time of the Combined General Meeting of
December 21, 2000 (i.e. 590,868 shares).
The company implemented this treasury stock purchase program in January 2001.
53
Number of shares purchased
Number of shares sold
Average purchase price
Average sale price
Amount of negotiation fees
Number of shares registered at year-end
Value of shares during purchase operation
Nominal value of shares at year-end
Motive for acquisition
Percentage of share capital represented
450,152
EUR 28.13
(FRF 184.52)
EUR 10,334.79
(FRF 67,791.78)
450,152
EUR 12,660,886.58
(FRF 83,049,971.78)
EUR 343,126.15
(FRF 2,250,760)
Not specified
7.46 %
At August 31, 2001, the company held 450,152 of its own shares. Guillemot Ventures, which is
99.99% controlled by the company, held 140,634 company shares.
Thus, the total number of treasury shares without voting rights amounted to 590,786 at August 31,
2001.
The company’s accounts at August 31, 2001 include a provision for depreciation of shares.
The company proposed a new treasury stock purchase program formerly approved by the Commission
des Opérations de Bourse at its General Meeting on February, 15th, 2002.
Exceeding statutory threshold levels (Article 6 of bylaws)
All shareholders acting singularly or collectively, without prejudice to the threshold levels stipulated in
Article L.233-7, paragraph 1 of the Commercial Code whose direct holdings of share capital or voting
rights increase to at least 1%, or a multiple of this percentage not greater than 4% of the company’s
share capital, must notify the company via registered letter with confirmation of receipt within the time
limit stipulated in article L.233-7 of the Commercial Code.
The information stipulated in the preceding paragraph where threshold levels are surpassed by a
multiple of 1% of share capital or voting rights is equally applicable when the holding of share capital
or voting rights becomes less than the threshold level previously mentioned.
Non-compliance with the legal and bylaw declaration requirements regarding threshold levels will result
in the forfeit of voting rights in accordance with the conditions laid out in article L.233-14 of the
Commercial Code, following a request registered by one or more shareholders collectively holding at
least 5% of the company’s voting rights.
Statutory allocation of net income (Article 17 of bylaws)
Net income comprises the financial year’s revenues less operating expenses, depreciation and
amortization, and provisions.
The following is withheld from the financial year’s net income, reduced by the net losses of prior years,
as applicable:
• amounts to be allocated to reserves in accordance with applicable laws and bylaws and, in particular,
at least 5% to constitute the legal reserve fund; this withdrawal ceases to be mandatory when the fund
reaches an amount equal to one-tenth of the share capital and again becomes mandatory whenever the
legal reserve, for whatever reason, drops below this percentage.
• amounts which the General Meeting, upon recommendation of the Board of Directors, deem useful
to allocate to extraordinary or special reserves or to carry forward.
54
The balance shall be distributed to shareholders. However, in the case of a capital reduction, no
distribution can be made to shareholders where shareholders’ equity is, or would become following
this, less than the share capital amount increased by reserves which the applicable laws and bylaws
deem non-distributable.
The meeting may, in accordance with the stipulations set out in article L.232-18 of the Commercial
Code, recommend payment of dividends and interim dividends in full or in part through the issue of
new shares.
Identifiable Bearer Shares
The company may at any time, in accordance with regulatory and legal measures, have recourse to
SICOVAM with regard to the procedure for Identifiable Bearer Shares.
55
II. GENERAL INFORMATION ABOUT THE COMPANY’S SHARE
CAPITAL
A.
Share capital
Subscribed share capital at August 31, 2001 amounted to FRF 30,187,155, representing a total of
6,037,431 shares with a nominal value of FRF 5 each.
The Board of Directors Meeting of September 11, 2001, using the authority vested in it by the
Combined General Meeting of December 10, 1999, decided to convert the company’s share capital into
euros and to delete all references to the nominal value of shares in the bylaws.
The company’s share capital, expressed in euros, now amounts to EUR 4,602,002.11
(FRF 30,187,154.98).
Unissued authorized capital
The value of unissued authorized share capital at August 31, 2001 amounted to FRF 19,784,355 (EUR
3,016,105.48).
a) The Board of Directors issued bonds convertible into shares without preferential subscription rights
with a nominal value of FRF 197,183,166.84 (EUR 30,060,380) on June 27, 1999, using the
authorization vested in it by the Extraordinary General Meeting of November 12, 1998 (visa no. 99-893
issued on June 28, 1999 by the Commission des Opérations de Bourse on the transaction note).
Main characteristics of bonds convertible into shares
Number and nominal amount:
429,434 bond strips issued at a nominal value of
EUR 70 each
Issue price:
EUR 70
Issue date:
July 13, 1999
Duration:
5 years and 50 days
Annual interest:
2.75%, amounting to EUR 1.925 per bond strip,
payable on August 31 of each year from August 31,
1999
Conversion of bonds into shares:
1 converted bond gives the holder the right to 2
Guillemot Corporation shares
Gross actuarial rate of return:
3.38%
Normal amortization:
Full amortization by August 31, 2004 through
redemption at EUR 72.45, amounting to 103.50%
of issue price
Main characteristics of stock warrants
Subscription conditions : A subscription warrant is attached to each bond
Subscription rights:
1 warrant gives the holder the right to subscribe to 1 Guillemot
Corporation share
Subscription price :
EUR 45
Exercise period:
From July 13, 1999 to August 31, 2006 inclusive, for a total of 7
years and 50 days
At August 31, 2001, the number of bonds convertible into shares still in circulation amounted to
240,745; the number of stock warrants still in circulation amounted to 429,212.
56
b) The Combined General Meeting of December 10, 1999 authorized the Board of Directors to issue
marketable securities with or without preferential subscription rights, for a maximum increase in capital
of FRF 20,000,000 (EUR 3,048,980.34) in nominal value and a maximum amount of bonds issued for
FRF 800,000,000 (EUR 121,959,213.79) in nominal value. This authorization bestowed upon the
Board of Directors expires on February 10, 2002.
On April 26, 2000, the Board of Directors issued new shares without preferential subscription rights
amounting in value to FRF 325,975,175.18 (EUR 49,694,595.10), using the authority vested in it by the
Combined General Meeting of December 10, 1999 (visa no. 00-698 issued by the Commission des
Opérations de Bourse May 3, 2000 on the transaction Note).
Main characteristics of new shares issued
Number of new shares:
Issue price:
Quotation date:
Corresponding capital increase:
953,831
EUR 52.10
May 16, 2000
FRF 4,769,155 (EUR 727,052.99)
Stock option plan and its impact on share capital
a) The Extraordinary General Meeting of November 12, 1998 authorized the Board of Directors to
allocate Group personnel share subscription options not exceeding 100,000 shares, representing a
maximum increase in share capital of FRF 1,000,000 (EUR 152,449.02).
The Board of Directors, using this authorization, decided on November 14, 1998 to allocate
subscription options on 50,000 shares to Group employees. No options were allocated to executive
management.
The Board of Directors, using this authorization, decided on December 6, 1999 to allocate subscription
options on 50,000 shares to Group employees. No options were allocated to executive management.
b) The Combined General Meeting of December 21, 2000 authorized the Board of Directors to
allocate Group personnel share subscription options not exceeding 100,000 shares, representing a
maximum increase in share capital of FRF 500,000 (EUR 76,224.51).
The Board of Directors, using this authorization, decided on April 17, 2001 to allocate subscription
The Board of Directors, using this authorization, decided on April 18, 2001 to allocate subscription
No options were exercised as of August 31, 2001.
57
Characteristics of stock option plans
First
plan
12/11/98
14/11/98
Second
plan
12/11/98
06/12/99
Third
plan
21/12/00
17/04/01
Fourth
plan
21/12/00
18/04/01
Total number of subscription or share purchase
options allocated:
including the following number available for
subscription or purchase by company directors:
-
-
28, 000
72, 000
-
-
0
0
First date of exercise of subscription or share
purchase options
-
-
17/04/05
18/04/02
Expiration date of subscription or share purchase
options
-
-
17/04/11
18/04/11
Subscription or share purchase option price
-
-
Subscription or share purchase option exercise
methods
Subscription or share purchase options
exercised during the financial year
options exercised as of August 31, 2001
cancelled during the financial year
options cancelled
remaining
options remaining
-
-
-
25% per
year
0
0
0
0
0
0
0
0
96,466
100,000
28,000
72,000
General Meeting date
Board of Directors Meeting date
allocated during the financial year
EUR 29
EUR 29
(FRF 190.22) (FRF 190.22)
58
Number
Settlement
dates
Price Plan
(EUR) No.
Subscription or share purchase options allocated during
the financial year
Subscription or share purchase options allocated to company
directors, according to term of office and functions carried out
within the company
0
0
17/04/11
18/04/11
29
29
3
4
640
600
480
450
350
17/04/11
17/04/11
17/04/11
17/04/11
17/04/11
29
29
29
29
29
3
3
3
3
3
1,500
1,200
1,000
660
650
600
550
18/04/11
18/04/11
18/04/11
18/04/11
18/04/11
18/04/11
18/04/11
29
29
29
29
29
29
29
4
4
4
4
4
4
4
Shares subscribed to or purchased by company directors less
options held on the companies previously mentioned
(N/A: no options were allocated to company directors)
N/A
N/A
N/A
N/A
Shares subscribed to or purchased less options held on
associated company/companies or group, in accordance with
the conditions set out in article L.225-180, by each of the ten
employees with the greatest number of shares purchased or
subscribed to in this way (excluding directors)
0
0
0
0
14/11/08
06/12/09
17/04/11
18/04/11
16.76
36
29
29
1
2
3
4
Subscription or share purchase options allocated by the
company to each of the ten employees with the greatest
number of options allocated in this way (excluding directors)
17/04/01 plan
1 employee
1 employee
2 employees
1 employee
5 employees
18/04/01 plan
1 employee
1 employee
1 employee
1 employee
3 employees
1 employee
2 employees
Subscription or share purchase options exercised during
the financial year
The remaining options allow for the potential creation of a maximum of 296,466 new shares,
representing 4.7% of the total number of shares of which the company’s share capital was comprised at
August 31, 2001, in addition to these new shares.
59
B.
Date
01/09/1997
01/08/1998
24/11/1998
Share capital evolution from company creation date
Transaction type
Number
of shares
Cumulative
number of
shares
Amount of share capital
increase
FRF 20
FRF 10
FRF 10
FRF
671,300
FRF 10
FRF
467,750
FRF 5
FRF 5
FRF
21,009,922
FRF 24,201,300
FRF 24,669,050
4,934,032 FRF 1,110
-
FRF 5
FRF
64,420
FRF 24,670,160
953,831
5,887,863
-
FRF 5
5,908,681
FRF 5
128,750
6,037,431
-
6,037,431
-
FRF
104,090
FRF
643,750
-
FRF
321,206,020
FRF
4,675,409
FRF
28,915,312
-
FRF 29,439,315
20,818
FRF
4,769,155
-
67,130
2,420,130
FRF
3,530,000
-
23/02/2000
17/05/2000
2 for 1 split
Increase in share capital as a
result of bond conversion
2,420,130
93,550
4,840,260
4,933,810
-
17/05/2000
result of exercise of share
subscription warrants
result of new share issue
Conversion of share capital
into euros and removal of the
nominal value
222
11/09/2001
11/09/2001
FRF 20,000,000
FRF 20,000,000
FRF 23,530,000
-
1,000,000
2,000,000
2,353,000
13/09/2000
FRF
98,840,000
FRF
30,152,775
Total share
capital
Through
conversion
1,000,000
1,000,000
353,000
17/05/2000
Share issue or
conversion
premium
Through
share issue
Company creation
2 for 1 split
result of public offering
23/02/2000
Share
nominal
value
-
FRF 5
-
FRF 24,201,300
FRF 29,543,405
FRF 30,187,155
EUR 4,602,002.11
There have been no changes to share capital since September 11, 2001.
C.
Share capital ownership evolution over the last three years
Date
Transaction type
11/1998
07/1999
Public share offering
Transfer
of
shares
to
Guillemot Participations SA
2 for 1 share split
result of new share issue
Increase in share capital
through bond conversion
Increase in share capital
through bond conversion
02/2000
05/2000
08/2000
08/2001
Percentage owned
by Guillemot
Participations
SA(1)
Percentage selfcontrolled (2)
Total
83.39 %
41.99 %
Percentage
owned by
employees and
the general
public
16.61 %
18.01 %
40%
-
100 %
100 %
40.75%
26.09%
20.36%
41.94%
38.89%
31.97%
-
100%
100%
26%
42.14%
31.86%
-
100%
26.45%
41.78%
21.98%
9.79%
100%
Percentage
directly owned by
the Guillemot
family
(1) 100% controlled by the Guillemot family.
(2) At August 31, 2001, Guillemot Corporation SA held 7.46 % of the number of shares comprising its share capital and its
subsidiary, Guillemot Ventures SA, held 2.33%, for a total of percentage of 9.79% self-controlled shares. This holding of
treasury stock takes place within the context of the treasury stock purchase program authorized by the Combined General
Meeting of December 21, 2000.
60
D.
Company share capital ownership and voting rights at August 31, 2001
Shareholders
Claude GUILLEMOT
318,355
5.27%
595,446
% voting
rights
ownership
7.3%
Michel GUILLEMOT
318,358
5.27%
595,452
7.3%
Yves GUILLEMOT
318,358
5.27%
595,452
7.3%
Gérard GUILLEMOT
318,363
5.27%
595,458
7.3%
Christian GUILLEMOT
318,354
5.27%
595,446
7.3%
5,800
0.10%
6,600
0.08%
Sub-total directly held by the GUILLEMOT
family
1,597,588
26.45%
2,983,854
36.58%
GUILLEMOT PARTICIPATIONS SA(1)
1,327,298
21.98%
2,648,698
32.48%
Sub-total directly or indirectly held by the
GUILLEMOT family
2,924,886
48.43%
5,632,552
69.06%
GUILLEMOT CORPORATION SA(2)
450,152
7.46%
0
0
GUILLEMOT VENTURES SA(2)(3)
140,634
2.33%
0
0
Sub-total directly or indirectly held by the
GUILLEMOT family and company selfcontrolled interests
3,515,672
58.22%
5,632,552
69.06%
Public
2,521,759
41.78%
2,522,660
30.94%
Total
6,037,431
100%
8,155,212
100%
Other members of the Guillemot family
Number
of shares
% share
ownership
Number of
voting rights
(1) 100% controlled by the Guillemot family
(2) Treasury shares without voting rights
(3) 99.99% controlled by Guillemot Corporation SA
The company is not aware of any shareholders holding in excess of 5% of the company’s share capital
at August 31, 2001 other than the five Guillemot brothers, Guillemot Participations SA and the
Company itself; nine shareholders held more than 1% of Guillemot Corporation’s share capital at this
date:
- FCP ULYSSE
3.05%
- GUILLEMOT VENTURES
2.33%
- GROUPAMA VIE-EPARGNE FRANCS ACTI
1.78%
- GAN INCENDIE ACCIDENTS
1.60%
- MIZUHO TRUST AND BANKING
1.49%
- AXA SECOND MARCHE COMPTANT
1.42%
- SIC CARDIF ACTIONS OPPORTUNITES
1.33%
- MMA PERSPECTIVES
1.29%
- FERRI SA
1.14%
61
E.
Shareholders and their commitments
There are no shareholder commitments.
F.
Share capital pledges
There are no share capital pledges.
G.
Shareholders’ agreement
There is no shareholders’ agreement.
III. DIVIDENDS
Dividend distribution policy
Guillemot Corporation plans to distribute dividends to its shareholders for upcoming financial years
starting with the year begun September 1, 2001, under conditions that the economic conditions for
distribution are met.
No dividends have been distributed since the creation of the company.
Statute time delay limitation
Dividends and interim dividends not collected within five years are paid to the French Government, in
accordance with regulations.
62
IV. COMPANY STOCK EXCHANGE INFORMATION
General information
SICOVAM code: 6672
Stock exchange: Paris Stock Exchange – Nouveau Marché (New Market)
Number of shares in circulation: 6,037,431 shares
Stock market capitalization at August 31, 2001: FRF 724,733,217.24 (EUR 110,484,987.30);
(at FRF 120.04/EUR 18.3 per share)
Public offering share price at November 27, 1998: FRF 290. In February 2000, the nominal value was
halved as a result of a 2 for 1 share split.
Guillemot Corporation share price performance since its public offering (EUR)
90,00
80,00
70,00
60,00
50,00
40,00
30,00
20,00
10,00
27/10/01
63
26/11/01
27/09/01
27/08/01
27/07/01
27/06/01
27/05/01
27/04/01
27/03/01
27/02/01
27/01/01
27/12/00
27/11/00
27/10/00
27/09/00
27/08/00
27/07/00
27/06/00
27/05/00
27/04/00
27/03/00
27/02/00
27/01/00
27/12/99
27/11/99
27/10/99
27/09/99
27/08/99
27/07/99
27/06/99
27/05/99
27/04/99
27/03/99
27/02/99
27/01/99
27/12/98
27/11/98
-
Total share
volume
traded
Daily average
share volume
traded
Opening share
Monthly
price on the last
high share
day of the month price (EUR)
(EUR)
Monthly low
share price
(EUR)
2000
May
June
July
August
September
October
November
December
301,320
124,902
24,777
160,716
69,502
56,835
50,960
83,732
9,151
5,948
1,239
6,988
3,310
2,706
2,316
4,407
57.00
55.20
47.00
58.00
54.00
51.45
41.52
39.00
57.45
59.00
56.00
64.85
62.00
54.90
52.80
44.50
47.15
53.00
47.00
45.00
47.00
46.50
39.50
37.75
2001
January
February
March
April
May
June
July
August
September
October
November
December
118,512
190,251
110,825
60,870
78,594
292,309
298,733
113,447
183,296
116,392
247,053
338,042
5,387
9,513
5,038
3,204
3,572
14,615
13,579
4,932
9,165
5,084
10,741
18,780
47.02
31.10
32.65
37.50
37.38
20.19
21.37
18.07
10.56
16.05
19.20
16.20
49.75
48.60
36.50
39.00
40.00
37.00
23.90
23.30
19.00
19.50
19.89
25.89
38.00
30.60
29.30
26.40
32.50
19.52
20.15
18.00
9.50
10.60
15.20
16.13
59,449
2,702
17.95
19.38
17.00
2002
January
Source: Société de Bourse ING Barings
64
♦
UDITED A
NN
AL F
INANCIAL
♦A
AUDITED
AN
NU
UAL
FINANCIAL
SSTATEMENTS
TATEMENTS
65
I. GUILLEMOT CORPORATION AUGUST 31, 2001 YEAR-END
CONSOLIDATED FINANCIAL STATEMENTS
All data is in FRF K and/or EUR K.
A.
Consolidated balance sheet at August 31, 2001 year-end
ASSETS
FRF
Net
31.08.01
EUR
Net
31.08.01
FRF
Net
31.08.00
Pro forma
EUR
Net
31.08.00
Pro forma
FRF
Net
31.08.00
Published
EUR
Net
31.08.00
Published
Acquisition excess fair market values (E.4.a)
Intangible fixed assets (E.4.b)
Tangible fixed assets (E.4.c)
Financial fixed assets (E,4.d)
9 749
247 733
70 034
49 333
1 486
37 767
10 677
7 521
10 322
237 252
49 711
77 185
1 574
36 169
7 578
11 767
10 322
237 252
49 711
77 185
1 574
36 169
7 578
11 767
Total fixed assets
376 849
57 450
374 470
57 088
374 470
57 088
Stocks
Trade accounts receivable (E.4.e)
Other receivables and adjustment accounts
(E.4.f)
Securities (E.4.g)
Cash and deposits
420 666
198 026
64 130
30 189
310 632
424 379
47 356
64 696
310 632
424 379
47 356
64 696
93 218
10 765
45 177
14 211
1 641
6 887
235 096
0
105 789
35 840
0
16 127
238 835
0
105 789
36 410
0
16 127
767 852
117 058
1 075 896
164 019
1 079 635
164 589
Total assets
1 144 701
174 509
1 450 366
221 107
1 454 105
221 677
LIABILITIES AND
SHAREHOLDERS' EQUITY
FRF
31.08.01
Share capital (1)
Premiums (1)
Reserves and consolidated net income (2)
Other
Group shareholders' equity (E.4.h)
Minority interests
Shareholders' equity
EUR
31.08.01
FRF
31.08.00
Pro forma
EUR
31.08.00
Pro forma
FRF
31.08.00
Published
EUR
31.08.00
Published
30 187
503 458
84 415
-105 555
512 505
0
512 505
4 602
76 752
12 869
-16 092
78 131
0
78 131
29 543
462 082
80 951
3 932
576 508
0
576 508
4 504
70 444
12 341
599
87 888
0
87 888
29 543
462 082
78 888
632
571 145
0
571 145
4 504
70 444
12 026
96
87 070
0
87 070
7 591
1 157
12 287
1 873
12 988
1 980
Financial liabilities (3) (E.4.j)
Trade accounts payable
373 427
171 136
56 929
26 090
263 039
435 382
40 100
66 374
263 039
435 382
40 100
66 374
Other liabilities and adjustment accounts (E.4.k)
Total liabilities
80 042
624 605
12 202
95 220
163 150
861 571
24 872
131 346
171 551
869 972
26 153
132 626
1 144 701
174 509
1 450 366
221 107
1 454 105
221 677
Provisions for liabilities and expenses (E.4.i)
Total liabilities and shareholders' equity
(1) of the consolidating parent company
(2) net income for the financial year: FRF 15,766 K (EUR 2,404 K)
(3) including FRF 133,947 K (EUR 20,420 K) maturing in more than one year from now
including FRF 239,480 K (EUR 36,509 K) maturing in less than one year from now
66
B.
Consolidated statement of income at August 31, 2001 financial year-end
FRF
31.08.01
EUR
31.08.01
FRF
31.08.00
Pro forma
EUR
31.08.00
Pro forma
FRF
31.08.00
Published
EUR
31.08.00
Published
Net sales
Other operating revenues (E.5.a)
1 560 153
65 592
237 844
9 999
1 458 185
55 396
222 299
8 445
1 458 185
55 396
222 299
8 445
Cost of sales ( purchases, inventory charges and expenses) (E.5.b)
Personnel expenses
Other operating expenses
Taxes and duties
-1 317 244
-161 956
-22 929
-5 231
-200 813
-24 690
-3 496
-797
-1 226 520
-114 195
-61 492
-4 550
-186 982
-17 409
-9 374
-694
-1 226 520
-114 195
-61 492
-4 550
-186 982
-17 409
-9 374
-694
Depreciation, amortization and other charges (E.5.c)
-45 338
-6 912
-35 741
-5 449
-36 313
-5 536
Operating income
73 047
11 136
71 083
10 837
70 511
10 749
Financial expenses and income (E.5.d)
-46 676
-7 116
-5 524
-842
-8 685
-1 324
Income of integrated businesses before exceptional items
26 371
4 020
65 559
9 994
61 826
9 425
Exceptional expenses and income (E.5.e)
11 784
1 796
309
47
309
47
Corporate income taxes (E.5.f)
-21 817
-3 326
-17 440
-2 659
-16 312
-2 487
Net income of integrated businesses
16 338
2 491
48 428
7 383
45 823
6 986
-572
-87
-572
-87
0
0
15 766
2 404
47 856
7 296
45 823
6 986
0
0
0
0
0
0
15 766
FRF 2.62
FRF 2.58
2 404
EUR 0.40
47 856
FRF 9.41
FRF 6.7
7 296
EUR 1.43
45 823
FRF 9.01
FRF 6.41
6 986
EUR 1.37
Depreciation, amortization and excess fair market value charges
Net income before minority interests
Minority interests
Net income per share
Diluted net income per share (1)
EUR 0.39
EUR 1.02
EUR 0.98
(1) The income used to calculate the diluted net income per share is that stipulated in OEC notice no.27.
This was divided by the theoretical maximum number of shares to be created.
C.
Selected consolidated performance results
The principal consolidated performance results are as follows:
FRF
31.08.01
Gross profit margin
Added value
Gross operating income
Operating income
408 020
268 895
106 171
73 047
EUR
31.08.01
62 202
40 993
16 186
11 136
FRF
31.08.00
Pro forma
369 711
246 664
130 418
71 083
EUR
31.08.00
Pro forma
56 362
37 604
19 882
10 837
FRF
31.08.00
Published
369 711
246 664
130 418
70 511
EUR
31.08.00
Published
56 362
37 604
19 882
10 749
67
D.
Consolidated cash flow for the August 31, 2001 financial year-end
FRF
31.08.01
Cash and cash equivalents linked to activities
Net income of integrated companies
Amortization and depreciation
Excess fair market values amortization
Amortization, depreciation and other provisions recovery
Net gains and losses on disposals
Deferred tax change
Other income and expenses not included in cash flow
Cash and cash equivalents provided by operations of
integrated companies
15 766
55 790
572
EUR
31.08.01
FRF
EUR
FRF
EUR
31.08.00
31.08.00
31.08.00
31.08.00
Pro forma Pro forma Published Published
2 404
47 856
7 296
45 823
6 986
8 505
38 104
5 809
41 843
6 379
87
-572
-87
-572
-87
-28 259
-16 682
-2 525
-14 123
-4 308
-2 543
-385
-2 153
-12 269
7
707
0
-1 870
1
108
0
-13 464
7
-421
0
-2 053
1
-64
0
10 539
1 607
73 833
11 256
73 216
11 162
2 484
379
1 213
185
1 213
185
Decrease in working capital requirements
Decrease in non-working capital requirements
-6 852
-14 252
-1 045
-2 173
-238 851
-18 857
-36 413
-2 875
-242 251
-14 840
-36 931
-2 262
Cash and cash equivalents applied to operating
activities
-21 104
-3 217
-257 708
-39 287
-257 091
-39 193
-8 081
-1 232
-182 662
-27 847
-182 662
-27 847
-34 674
-45 204
-5 286
-6 891
-93 421
-27 365
-14 242
-4 172
-93 421
-27 365
-14 242
-4 172
31 939
0
-352
27 723
0
4 869
0
-54
4 226
0
556
472
-77 413
13 595
-1 219
85
72
-11 802
2 073
-186
556
472
-77 413
13 595
-1 219
85
72
-11 802
2 073
-186
-20 568
-3 136
-184 795
-28 172
-184 795
-28 172
0
183 476
-2 892
-64 377
0
27 971
-441
-9 814
313 828
31 328
-2 388
-57 357
47 843
4 776
-364
-8 744
313 828
31 328
-2 388
-57 357
47 843
4 776
-364
-8 744
116 207
17 716
285 411
43 511
285 411
43 511
-107 471
-16 384
0
0
0
0
-1 195
-182
1 054
161
1 054
161
-21 108
31 777
10 669
-3 218
4 844
1 626
-80 992
112 769
31 777
-12 347
17 192
4 844
-80 992
112 769
31 777
-12 347
17 192
4 844
Cash and cash equivalents provided by operations translation adjustment
Net cash and cash equivalents linked to activities
Investment activities
Intangible fixed asset acquisitions
Tangible fixed asset acquisitions
Intangible and tangible fixed asset disposals
Investment grant receipts
Financial fixed asset acquisitions
Financial fixed asset disposals
Deferred expenditures
Net cash and cash equivalents linked to investment
activities
Financing activities
Debt issuance
Debt repayments
Shareholders' current account repayments
Net cash and cash equivalents provided by financing
activities
Acquisition of consolidated parent company shares
Forex translation adjustment
Cash and cash equivalents net decrease
Opening balance
Closing balance
68
E.
Appendix to August 31, 2001 year-end consolidated financial statements
1)
SSiignificant events
During the course of the financial year, the Guillemot Corporation Group made a strategic move to
end its software distribution activities. These activities ended completely on August 31, 2001.
Growth in the PC and console accessory markets in both Europe and the United States slowed during
the year; nevertheless, market share of both the Hercules and Thrustmaster brands increased in the
main countries in which they are distributed.
The Guillemot Corporation consolidated financial statements were prepared in accordance with
regulation 99-02 for the first time this year. The effects of this change in method are outlined here
below.
2)
Financial accounting and reporting policies and methods
The Guillemot Corporation consolidated financial statements are prepared in accordance with the
conditions of regulation 99-02 of the Comité de la Réglementation Comptable, effective as of the
2000/2001 financial year.
The preferential methods stipulated have been applied, with the exception of the evaluation of
retirement commitments and assimilated benefits, owing to their non-significant nature.
Acquisition and disposal operations carried out prior to September 1, 2000 were not implemented
retrospectively. The effect of changes in accounting methods put in place retrospectively is calculated
on shareholders’ equity at the opening of the financial year.
In order to allow for comparison between the current and preceding financial years, information
pertaining to the year ended August 31, 2000 is presented here in the form of pro forma accounts.
Effects of changes in accounting methods on balance sheet:
FRF
31.08.00
FRF
Adjustments
FRF
31.08.00
Pro forma
EUR
31.08.00
EUR
Adjustments
EUR
31.08.00
Pro forma
Fixed assets
Inventories
Trade accounts receivable
Cash and marketable securities
Total assets
374 470
310 632
424 379
238 835
105 789
1 454 105
0
0
0
-3 739
0
-3 739
374 470
310 632
424 379
235 096
105 789
1 450 366
57 088
47 356
64 696
36 410
16 127
221 677
0
0
0
-570
0
-570
57 088
47 356
64 696
35 840
16 127
221 107
Share capital
Premiums
Reserves
Consolidated reserves / net income
Forex translation adjustment
Government grants
Group shareholders' equity
Provisions for liabilities and expenses
Financial liabilities
Trade accounts
Other liabilities and adjustment accounts
Total liabilities and shareholders' equity
29 543
462 082
32 533
45 823
532
632
571 145
12 988
263 039
435 382
171 551
1 454 105
0
0
562
2 033
3 400
-632
5 363
-701
0
0
-8 401
-3 739
29 543
462 082
33 095
47 856
3 932
0
576 508
12 287
263 039
435 382
163 150
1 450 366
4 504
70 444
4 960
6 986
81
96
87 070
1 980
40 100
66 374
26 153
221 677
0
0
86
310
518
-96
818
-107
0
0
-1 281
-570
4 504
70 444
5 045
7 296
599
0
87 888
1 873
40 100
66 374
24 872
221 107
69
Effects of changes in accounting methods on statement of income accounts:
FRF
31.08.00
FRF
Adjustments
FRF
31.08.00
Pro forma
EUR
31.08.00
EUR
Adjustments
EUR
31.08.00
Pro forma
Operating revenues
Operating expenses
Depreciation, amortization and other charges
Operating income
1,513,581
-1,406,757
-36,313
70,511
0
0
572
572
1,513,581
-1,406,757
-35,741
71,083
230,744
-214,459
-5,536
10,749
0
0
87
87
230,744
-214,459
-5,449
10,837
Financial expenses and income
Depreciation, amortization and other charges
-4,377
-4,308
617
2,544
-3,760
-1,764
-667
-657
94
388
-573
-269
61,826
309
-16,312
45,823
0
45,823
3,733
0
-1,128
2,605
-572
2,033
65,559
309
-17,440
48,428
-572
47,856
9,425
47
-2,487
6,986
0
6,986
569
0
-172
397
-87
310
9,994
47
-2,659
7,383
-87
7,296
Income before exceptional items of integrated
businesses
Exceptional expenses and income
Corporate income tax
Net income of integrated businesses
Excess fair market values amortization
Net income
In particular, unrealized foreign exchange gains at August 31, 2000 amounting to FRF 7,498 K were
not taken into account in the results for the preceding financial year nor for this year, but are held over
in reserve for the opening of the current financial year.
Consolidation principles
All companies controlled directly or indirectly by the Guillemot Corporation Group are fully
consolidated.
Companies in which the Group does not have a significant influence are not consolidated.
All consolidated companies closed their accounts on August 31, 2001.
The Guillemot Corporation Group does not have joint control in or significant influence on its
investments.
Results of companies within the Group’s sphere of consolidation are consolidated from the date on
which control was assumed or from the company’s creation date.
Accounts of autonomous foreign subsidiaries not situated in high inflation zones are converted from
foreign currencies according to the currencies’ value at closing.
Accounts of non-autonomous foreign subsidiaries are converted taking into account the historical value
of their respective currencies.
Inter-company transactions between consolidated companies are eliminated in accordance with
accepted accounting practices.
All significant transactions between consolidated companies are eliminated including unrealized internal
results on fixed assets and stock in consolidated companies.
Foreign exchange differences for significant amounts which account for an integral part of a
subsidiary’s net investment are accounted for as translation adjustments.
Purchased company goodwill
Goodwill results from excess earnings ability acquired with a purchased company as a result of its
customer base, market share, expertise and so on.
The accounting of purchased company goodwill specified in the consolidated financial statements is
consistent with that specified in individual statements. Purchased company goodwill is not subject to
amortization and is calculated based on a range of elements, rather than on aggregation of individual
element values.
70
The criteria used to calculate the value of goodwill are reviewed on an annual basis. The different
elements taken into account are net sales, clientele, agreements with major distribution networks within
the market radius zones in question, and future prospects.
A provision for depreciation will be implemented at closing if the fair value of goodwill falls below the
book value.
Brands
The brands acquired are reviewed annually based on their contribution to the commercial activities of
the Group. This contribution is evaluated against criteria such as whether or not a brand ranks among
the highest sellers in its field and net sales generated.
Excess fair market values
When a subsidiary is acquired, its identifiable assets and liabilities are recorded in the consolidated
balance sheet at their acquisition fair market values. A positive residual amount between the cost of
stock acquisition and the true value of these assets is accounted for as “excess fair market values”.
When the allocated fair market value of an asset exceeds or is less than its book value at acquisition, the
excess fair market value asset/deficit is recognized and recorded, and is amortized on a straight-line
basis over a period of up to 20 years; the amount of time is based on an estimate of the duration of a
given asset or deficit at the time of acquisition and is reviewed and revised periodically.
At the end of each financial year, the time remaining for each excess fair market value amount is
compared to the most recent estimation; the amount in question may then be subject to an exceptional
amortization, if need be.
Research and development costs
Development production costs are determined in accordance with the Conseil National de la
Comptabilité (National Accounting Advisory Board) pronouncement of April 1987. Applied research
and development costs relating to clearly identifiable projects with a very strong chance of commercial
success are capitalized as intangible fixed assets on an ongoing basis as the project is developed.
Amortization of these intangible fixed asset costs begins when the related product is commercially
released and continues over the commercial life of the product, normally a period of between one and
three years (maximum). Amortization is ordinarily on a straight-line basis; however, where sales are
below forecast, incremental amortization is recorded.
Tangible fixed assets are recorded at their acquisition or transfer cost and depreciation is calculated on a
straight-line basis over their estimated economic lives:
Buildings:
20 years
Fixtures and fittings:
10 years
Technical installations:
between 5 and 10 years
Vehicles:
4 or 5 years
Office and computer equipment:
between 3 and 5 years
Office furniture:
10 years
Tangible fixed assets - leased
Material tangible fixed assets acquired through capital leases are reported on the consolidated financial
statements at cost, and amortized as described above. The corresponding debt is recorded as a liability.
Financial securities are recorded as assets at their acquisition cost. This amount is compared to the
inventory value at the end of each financial year, and a provision is made if necessary.
71
Inventories
Inventories of Group companies are evaluated at their base cost, and exclude any inter-company
holding gains and losses.
Financing costs are not included in inventory evaluation.
When the inventory’s net realizable value is less than its carrying cost, an obsolete inventory allowance
is recorded for the amount of the difference.
Prepayments
The company pays license fees in advance to third parties for distribution and production rights.
It can happen that guaranteed amounts must be paid upon signature. When billed for by third parties,
these amounts are registered in a prepayment account and amortized on a pro rata basis according to
product sales. When guaranteed amounts have not yet been billed for in their entirety, a commitment
of balance sheet is written and is not registered on the balance sheet.
At year-end, the unamortized amounts are reviewed against the related products’ sales potential, and
where sales prospects are not sufficient, additional amortization is recorded.
Prepayments made to suppliers are also included under this heading.
Trade accounts receivable are recorded at their book value. A bad-debt allowance is established at the
financial year-end based on an assessment of collection probabilities of the trade accounts receivable.
Other receivables
Other receivables include loan issuance and fixed asset acquisition fees.
Issuance costs are amortized over the duration of the loan and acquisition fees are amortized over a
period of five years.
Deferred tax
Deferred tax is provided on temporary differences arising from the different treatment of items for
accounting and tax purposes. It is calculated using the liability method. Deferred tax assets are accrued
in full when they are considered to be recoverable in the short term.
Tax credit benefits relating to tax losses, whether current losses or arising from deferred amortization,
are accrued in full in the consolidated financial statements provided that it is very probable that they
can be offset against future taxable income in the short term.
In applying the liability method, the effect of possible variations in taxation rates on deferred taxes
recorded earlier is charged to net income for the financial year in which the rate changes took place.
Securities
Parent company shares acquired by Group on the stock market with a view to price stabilization are
included in this category.
A provision is made for unrealized potential depreciation.
Cash
Cash is comprised of accounts at banks and other financial institutions.
72
Foreign exchange translation
Foreign currency denominated transactions are translated at their transaction rate or, where applicable,
at their foreign exchange hedge contract rate. Foreign currency denominated assets and liabilities not
covered are translated at the closing rate. In accordance with the preferred method stipulated in
regulation 99-02, translation adjustments for monetary assets and liabilities are incorporated into the
consolidated net income figure for the period to which they relate.
Provisions for deferred tax, net acquisition fair market values and commercial liabilities and disputes are
included under this heading.
Pension benefits
Upon retiring, company employees are entitled to pension benefits calculated on the applicable
collective agreement. In the light of the relatively young average age of the company’s workforce, the
establishment for a pension benefits provision would be insignificant and is thus deemed to be
unnecessary at this point in time.
3)
Listing of consolidated companies
Companies consolidated in the Guillemot Corporation SA consolidated financial statements at August
31, 2001
Company
SIREN number
Country
414 196 758 France
Consolidation
accounting method
Consolidated
Ownership
stake
Yes
Full consolidation
GUILLEMOT France SA
399 595 644 France
Yes
Parent
company
100%
GUILLEMOT Recherche et Développement SARL
414 638 387 France
Yes
100%
Full consolidation
GUILLEMOT Conditionnement SARL
419 853 296 France
Yes
100%
Full consolidation
GUILLEMOT Administration SARL
419 853 429 France
Yes
100%
Full consolidation
GUILLEMOT Support Technique SARL
414 150 417 France
Yes
100%
Full consolidation
GUILLEMOT Logistique SARL
419 852 926 France
Yes
100%
Full consolidation
GUILLEMOT Conditionnement France SARL
414 215 780 France
Yes
100%
Full consolidation
GUILLEMOT Logistique France SARL
414 638 056 France
Yes
100%
Full consolidation
GUILLEMOT Studio Graphique SARL
424 092 351 France
Yes
100%
Full consolidation
GUILLEMOT Ventures SA
430 477 042 France
Yes
100%
Full consolidation
THRUSTMASTER SA
431 760 164 France
Yes
100%
Full consolidation
HERCULES Technologies SA
431 759 299 France
Yes
100%
Full consolidation
Full consolidation
GUILLEMOT Ltd
England
Yes
100%
Full consolidation
LOGICOSOFTWARE SA
GUILLEMOT Inc
Switzerland
Canada
Yes
Yes
100%
100%
Full consolidation
Full consolidation
GUILLEMOT GmbH
Germany
Yes
100%
Full consolidation
GUILLEMOT Ltd
Hong Kong
Yes
100%
Full consolidation
GUILLEMOT BV
The
Netherlands
Spain
Yes
100%
Full consolidation
Yes
100%
Full consolidation
GUILLEMOT SA
GUILLEMOT Recherche et Développement Inc
Canada
Yes
100%
Full consolidation
GUILLEMOT Inc
United States
Yes
100%
Full consolidation
GUILLEMOT SA
Belgium
Yes
100%
Full consolidation
GUILLEMOT Manufacturing Ltd
England
Yes
100%
Full consolidation
GUILLEMOT Logistic Ltd
England
Yes
100%
Full consolidation
GUILLEMOT Logistik GmbH
Germany
Yes
100%
Full consolidation
GUILLEMOT Logistica S.L
Spain
Yes
100%
Full consolidation
GUILLEMOT Logistique INC
Canada
Yes
100%
Full consolidation
73
GUILLEMOT Logistics Ltd
Hong Kong
Yes
100%
Full consolidation
The financial year of all consolidated companies ends on August 31.
Companies consolidated for the first time in the August 31, 2001 financial statements
- HERCULES Technologies SA
- GUILLEMOT Logistique INC
This change in the consolidation perimeter does not impact on balance sheet entries or on the
statement of income in a significant manner.
Balance sheet accounts explanatory notes
4)
a)
Excess fair market values:
Excess fair market values at August 31, 2001 were as follows:
Acquired companies
Acquisition
date
Guillemot Ltd (Hong Kong)
Guillemot Ltd (England)
Logicosoftware (Switzerland)
Guillemot SA (Belgium)
Guillemot Inc (United States)
TOTAL
b)
FRF gross
31.08.01
01.09.97
01.09.97
01.12.97
01.10.98
01.02.99
FRF
amortization
31.08.01
185
10
2,934
1,526
6,781
11,436
EUR
FRF net
31.08.01
37
2
549
223
876
1,687
148
8
2,385
1,303
5,905
9,749
net 31.08.01
EUR
FRF net
31.08.00
23
1
364
199
900
1,486
net 31.08.00
157
9
2,531
1,381
6,244
10,322
24
1
386
211
952
1,574
Intangible fixed assets:
Guillemot Corporation Group companies which produce Research and Development intangible fixed
assets:
- GUILLEMOT Recherche et Développement SARL
- GUILLEMOT Recherche et Développement INC
- THRUSTMASTER SA
- HERCULES Technologies SA
Intangible fixed assets are broken down as follows:
Gross book values
Purchased goodwill
Brands
R&D - in progress
Information systems - in progress
R&D
Incorporation costs
Concessions, patents, licenses…
Other intangible fixed assets
TOTAL
FRF
Perimeter
31.08.00
mvt
140,767
0
71,563
0
9,674
0
0
0
14,775
0
4,000
0
3,540
0
3,046
0
247,365
0
FRF
increase
0
285
25,734
7,788
13,961
0
1,947
3
49,718
FRF
Excess fair
decrease market values
13,729
0
57
0
13,851
0
0
0
625
0
1,539
0
5
-23
0
-1
29,806
-24
FRF
31.08.01
127,038
71,791
21,557
7,788
28,111
2,461
5,459
3,048
267,253
EUR
31.08.01
19,367
10,944
3,286
1,187
4,285
375
832
465
40,742
During the financial year, the Group began to make changes to its information systems.
Computer user licenses, contracts acquired and capitalized production are included under fixed assets in
progress at closing.
74
A progressive implementation is projected over the course of the next few years.
Accumulated amortization
FRF
Perimeter
31.08.00
mvt
6,560
0
2,354
0
1,176
0
24
0
10,114
0
R&D costs
Incorporation costs
Concessions, patents, licenses…
Other intangible fixed assets
TOTAL
FRF
increase
7,706
595
1,517
577
10,395
FRF
decrease
0
1,027
2
0
1,029
Excess fair
market values
0
0
-2
42
40
FRF
31.08.01
14,266
1,922
2,689
643
19,520
EUR
31.08.01
2,175
293
410
98
2,976
As the value of these intangible elements was not less than the goodwill gross book value, no provision
for amortization has been established at August 31, 2001 year-end.
c)
Tangible fixed assets are broken down as follows:
Gross book values
Land
Buildings
Technical installations
Other tangible fixed assets
Under development
TOTAL
Accumulated depreciation
FRF
Perimeter
FRF
31.08.00
mvt
increase
1,723
20,135
8,957
23,569
12,938
67,322
FRF
31.08.00
Buildings
Other tangible fixed assets
TOTAL
d)
0
50
0
1,003
0
1,053
Perimeter
mvt
3,154
3,663
10,794
17,611
6
0
448
454
FRF
decrease
3,923
18,806
8,685
10,666
8,152
50,232
Excess fair
market values
0
47
33
2,747
14,198
17,025
FRF
increase
FRF
decrease
2,065
6,369
6,839
15,273
FRF
31.08.01
0
-1
-8
-86
0
-95
Excess fair
market values
15
75
1,815
1,905
EUR
31.08.01
5,646
38,943
17,601
32,405
6,892
101,487
FRF
31.08.01
0
-3
23
20
861
5,937
2,683
4,940
1,051
15,472
EUR
31.08.01
5,210
9,954
16,289
31,453
794
1,517
2,483
4,795
Gross book value
FRF
31.08.00
Equity-accounted investments
Cost-accounted investments
Other financial fixed assets
TOTAL
Perimeter
mvt
75,566
33
1,586
77,185
0
0
40
40
FRF
increase
1,271
0
352
1,623
Excess fair
FRF
decrease market values
0
0
-9
25,738
0
721
26,459
FRF
31.08.01
-9
EUR
31.08.01
51,099
33
1,248
52,380
7,790
5
190
7,985
The provision for financial fixed assets is FRF 3,047 K (EUR 464 K).
Information concerning the Group’s main equity-accounted investments:
FRF
Name
Gameloft.com SA (1)
Students-life.com SA
SAS financière Yaccom
Wokup! SA (2)
Ludigames SA
Wingmen Alliance SA
Net values
20,541
1,250
4,236
9,000
12,050
1,000
FRF
EUR
Net values
3,131
191
646
1,372
1,837
152
% of capital
held
15%
14%
12%
13%
20%
20%
Shareholders'
equity
-53,144
243
16,106
Not available
16,762
3,076
FRF
FRF
Share price at
Last year's result
31.08.01
-434,757
-2,506
26
Not available
-41,382
-843
5.24
NA
NA
NA
NA
NA
EUR
Share price at
31.08.01
0.80
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
75
(1) On November 30, 2001, GameLoft SA announced a financial result of EUR –66.2 million and is in the process of
reorienting its activities. This result shows the depreciation of the company’s Internet assets. The company’s founders have
announced that they will ensure alone a recapitalization of the company.
As the book value of Gameloft shares was less than their stocklist value at August 31, 2001, no provision was established.
(2) December 31, 2001 represented the end of Wokup! SA’s first financial year.
The companies in which the Group does not have a significant influence are not included within its
consolidation perimeter.
Other companies not included within the consolidation perimeter are excluded because their operations
are not significant within the Group context.
e)
FRF
gross
31.08.01
Total
217,958
f)
FRF
provision
31.08.01
FRF
net
31.08.01
19,932
EUR
net
31.08.01
198,026
FRF
net
31.08.00
30,189
424,379
EUR
net
31.08.00
64,696
FRF
31.08.01
Advances and payments on account
Deferred tax assets
Current account receivables
Other
Prepaid expenses
Deferred expenses
Translation differences
Redemption premiums
TOTAL
EUR
31.08.01
FRF
31.08.00
Pro forma
EUR
31.08.00
Pro forma
3,256
10,820
1,383
60,251
11,333
3,916
0
2,259
496
1,649
211
9,185
1,728
597
0
344
114,158
10,414
4,969
87,859
7,935
5,943
0
3,818
17,403
1,588
758
13,394
1,210
906
0
582
93,218
14,211
235,096
35,840
FRF
31.08.00
Published
EUR
31.08.00
Published
114,158
10,414
4,969
87,859
7,935
5,943
3,739
3,818
238,835
17,403
1,588
758
13,394
1,210
906
570
582
36,410
These represent guaranteed advances on licensing contracts and payments on orders made to suppliers.
Operating licenses are charged against the product sales to which they relate on a pro rata basis.
Bond redemption premiums
Bond redemption premiums are amortized over the life of the bond. During the year, 64,375 bonds
were converted, resulting in a decrease in bond premiums for the amount of FRF 1,035 K (EUR 158 K)
and a recovery of previous amortization for an amount of FRF 229 K (EUR 35 K).
g)
Cash and marketable securities
Net cash at the end of the financial year amounted to FRF 10,669 K (EUR 1,626 K).
Securities comprised exclusively of shares were not taken into account in calculating the net cash.
h)
Shareholders’ equity
The share capital of Guillemot Corporation SA at August 31, 2001 comprised 6,037,431 shares with a
nominal value of FRF 5 each.
At the end of the financial year, 585,786 shares of the consolidated parent company had been
repurchased by the company itself or by its subsidiaries, within the context of its treasury stock
purchase program without express intention, and were deducted from the Group’s shareholders’ equity
for an amount of FRF 107,470 K (EUR 16,384 K).
76
Shareholders’ equity evolution
Other
Share
capital
Balance at 98-99 year-end
Movements
- share capital increase - new shares issuance
with share premiums
- share capital increase - warrant exercise
- share capital increase - bond conversion
Premiums
23,530
91,613
4,769
14,135
25,376
Total
shareholders'
equity
Other
-482
Total
shareholders'
equity
(EUR)
23,503
321,206
325,975
49,695
1
64
65
10
1,243
55,838
57,081
8,702
-12,213
-12,213
-1,862
-1,654
-1,654
-252
0
6,986
289
- 98-99 net income allocation
- net income
- other
7,228
18,711
-25,938
45,823
1,014
632
1
45,823
1,895
45,261
532
632
571,145
87,070
-2,153
3,400
1,247
190
4,748
0
-632
4,116
627
47,856
3,932
0
576,508
87,888
249
29,543
462,082
33,095
Adjustments arising from changes to
accounting regulation § 322 R.99-02
Adjustments arising from changes to
accounting regulations other than § 322 R.9902
Net opening balance after adjustments
Net
income
Translation
adjustments
154,172
- calculation of capital increase fees on
issuance premiums
- calculation of loan issuance fees on
conversion premium
Balance at 99-00 year-end
Consolidated
reserves
29,543
462,082
33,095
644
28,915
29,559
4,506
-443
-443
-68
0
15,766
-107,415
-1,470
0
2,404
-16,375
-224
512,505
78,131
Movements
- share capital increase - bond conversion
- calculation of loan issuance fees on
conversion premium
- 99-00 net income allocation
- 00-01 net income
- shares of consolidated business
- other
Balance at 00-01 year-end in FRF K
12,904
34,952
-47,856
15,766
602
30,187
503,458
68,649
15,766
55
-2,072
-107,470
1,915
-107,470
Bond issuance fees corresponding to bonds converted during the financial year, assimilated into capital
increase fees, were calculated on issuance premiums for their net tax values.
Number of Guillemot Corporation shares
77
At 01/09/99
bond conversion
02/2000 division of nominal value
bond conversion
creation of new shares
share subscription options exercised
At 31/08/00
bond conversion
At 31/08/01
2,353,000
67,130
2,420,130
114,368
953,831
222
5,908,681
128,750
6,037,431
Maximum number of shares to be created:
Through bond conversion
Through option exercise
Through subscription rights exercise
481,490
296,466
429,212
In the context of the bonds issued during the 98/99 financial year, subscription options with the
following characteristics were attached to bonds:
1 warrant is attached to each share, bestowing upon its holder the right to subscribe to a Guillemot
Corporation share of FRF 5 nominal value. The subscription price is EUR 45.
No warrants were exercised during the course of the financial year. 429,212 exercisable warrants remain
in circulation.
Stock option plans:
1st plan
2nd plan
96,466
100,000
FRF 5
FRF 5
EUR 16.76 EUR 36
(FRF
(FRF 110)
236.14)
27.11.03
06.12.04
to 14.11.08
to 06.12.09
Number of shares
Nominal value
Subscription price
Effective dates
Options not yet exercised
at 31.08.01
i)
96,466
3rd plan
28,000
FRF 5
EUR 29
(FRF 190.22)
17.04.05
to 17.04.11
4th plan
72,000
FRF 5
EUR 29
(FRF 190.22)
18.04.02
to 18.04.11
28,000
72,000
100,000
Provisions for liabilities and expenses are as follows:
Published
31.08.00
Other liability provisions
Negative acquisition adjustments
Forex loss provision
Deferred taxes provision
TOTAL
4,423
4,826
3,739
0
12,988
Pro forma
31.08.00
4,423
4,826
0
3,038
12,287
Increases
31.08.01
1,650
0
0
923
2,573
Recoveries
31.08.01
3,446
282
0
3,268
6,996
Translation
adjustments
31.08.01
-272
0
0
-1
-273
FRF
31.08.01
EUR
31.08.01
2,355
4,544
0
692
7,591
359
693
0
105
1,157
The negative acquisition adjustment relates to Guillemot GmbH (FRF 5,623 K gross value).
This adjustment is amortized against consolidated net income on a straight-line basis over a period of
twenty years.
Liabilities in the form of deferred taxes were previously presented as tax liabilities and are thus affected
to provisions for liabilities and expenses by the implementation of regulation 99-02.
No provision for Forex losses now appears.
78
j)
Financial liabilities:
FRF
31.08.01
Financial institution loans
Bonds
Loans arising from lease reinstatement
Medium-term bank liabilities
Bank overdrafts and currency advances
Other
Remaining debt to be paid in FRF K
Remaining debt to be paid in EUR K
EUR
31.08.01
FRF
31.08.00
23,095
114,412
459
200,500
34,508
453
373,427
3,521
17,442
70
30,566
5,261
69
56,929
14,113
145,005
782
28,000
74,012
1,127
263,039
within 1 yr.
239,480
36,509
between 1-5 yrs
127,197
19,391
in 5+ years
6,750
1,029
EUR
31.08.00
2,152
22,106
119
4,269
11,283
172
40,100
The Group has fixed-rate loans with financial institutions worth FRF 5,463 K (EUR 832 K) and
variable-rate loans worth FRF 17,631 K (EUR 2,687 K).
At August 31, 2001, the breakdown of financial liabilities by currency type was as follows:
Currency
31.08.01
BEF
CHF
USD
ESP
FRF
Amount
31.08.01
FRF
Equivalent
31.08.01
1,440
2,002
2,738
43,296
343,219
234
8,658
19,609
1,707
343,219
373,427
EUR
31.08.01
36
1,320
2,989
260
52,323
56,929
Guillemot Corporation issued bonds during the 98/99 financial year with the following characteristics,
taking into account the two-for-one common share split of February 2000:
Issue price:
Effective settlement date:
Duration:
Annual interest:
Conversion
of bonds into shares:
Premium amortization:
429,434 convertible bond strips issued with a nominal value of
EUR 70 each
EUR 70 per bond
July 13, 1999
5 years and 50 days
2.75% per year, or EUR 1.925 per bond, payable as of August 31,
1999
1 converted bond gives the holder the right to 2 Guillemot
Corporation shares with a nominal value of FRF 5 each.
3.38 % (in the event of non-conversion)
Full amortization by August 31, 2004 through redemption at
EUR 72.45, amounting to 103.5% of the issue price
64,375 bonds were converted during the financial year, resulting in the creation of 128,750 Guillemot
Corporation shares. 240,745 bonds now remain in circulation, allowing for the potential creation of
481,490 shares.
The Group has a net overall debt load of FRF 317,485 K (EUR 48,400 K).
79
k)
Other liabilities and adjustment accounts
FRF
31.08.01
Social security liabilities
Tax liabilities
Other liabilities
Adjustment accounts
TOTAL
EUR
31.08.01
15,931
32,147
30,738
1,226
80,042
FRF
31.08.00
Pro forma
2,429
4,901
4,686
187
12,202
EUR
31.08.00
Pro forma
12,014
38,874
111,532
730
163,150
FRF
31.08.00
Published
1,832
5,926
17,003
111
24,872
12,014
39,893
111,529
7,596
171,032
EUR
31.08.00
Published
1,832
6,082
17,002
1,158
26,074
Other liabilities include the current accounts of partners.
5)
Statement of income explanatory notes
a)
Other operating income
Other operating income is broken down as follows:
FRF
31.08.01
Capitalized production
Grants
Expense transfers
Provisions recovery
Other
TOTAL
b)
EUR
31.08.01
25,986
4,463
28,259
6,844
40
65,592
FRF
31.08.00
3,962
680
4,308
1,043
6
9,999
EUR
31.08.00
14,999
2,499
12,841
14,066
10,991
55,396
2,287
381
1,958
2,144
1,676
8,445
Purchases, inventory variation and external expenses
The cost of goods sold is broken down as follows:
FRF
31.08.01
Purchases and inventory variations
Other external expenses
TOTAL
c)
EUR
31.08.01
1,077,906
239,338
1,317,244
FRF
31.08.00
164,326
36,487
200,813
EUR
31.08.00
1,035,860
190,660
1,226,520
157,916
29,066
186,982
Depreciation, amortization and provision
Depreciation, amortization and provisions are broken down as follows:
FRF
31.08.01
Fixed assets depreciation and
amortization
Current assets provision
Deferred expenses
Liabilities and expenses provision
TOTAL
25 154
18 312
701
1 171
45 338
EUR
31.08.01
3 835
2 792
107
179
6 912
FRF
31.08.00
Pro forma
15 501
19 249
658
333
35 741
EUR
31.08.00
Pro forma
2 363
2 934
100
51
5 449
FRF
31.08.00
Published
16 073
19 249
658
333
36 313
EUR
31.08.00
Published
2 450
2 934
100
51
5 536
80
d)
Net financial expense is broken down as follows:
FRF
31.08.01
Financial income:
Forex gains
Interest
Provisions recoveries
Other
Financial expenses:
Forex losses
Interest
Amortization charges
Loss on securities disposal /
Total financial expense
EUR
31.08.01
FRF
31.08.00
Pro forma
EUR
31.08.00
Pro forma
FRF
31.08.00
Published
EUR
31.08.00
Published
57 843
2 032
0
417
60 292
8 818
310
0
64
9 191
46 630
9 020
0
853
56 503
7 109
1 375
0
130
8 614
43 469
9 020
1 195
853
54 537
6 627
1 375
182
130
8 314
70 320
31 050
4 666
932
106 968
10 720
4 734
711
142
16 307
35 334
24 929
1 764
0
62 027
5 387
3 800
269
0
9 456
32 790
24 929
5 503
0
63 222
4 999
3 800
839
0
9 638
-46 676
-7 116
-5 524
-842
-8 685
-1 324
The net financial expense is largely comprised of net Forex losses worth FRF 12.6 M and a FRF 15.9 M
increase in borrowing costs compared to the previous financial year.
Forex and market risks:
The Guillemot Corporation Group had Forex hedge sales and purchase contracts still in place at
August 31, 2001 year-end.
Forex gains or losses resulting from contracts relating to receivables and liabilities are included in the
net financial expense amount.
At August 31, 2001, the Guillemot Corporation Group had Forex hedge sales contracts not allocated to
current liabilities. The short-term value of these contracts is compared against the closing value of each
currency concerned. The corresponding potential amount of gain or loss is not included in the net
financial expense but is indicated instead in off balance sheet commitments.
Application of regulation 99-02:
As a result of the implementation of regulation 99-02, the balance of translation adjustment accounts
(assets and liabilities) included in the Group’s financial statements at August 31, 2000 year-end do not
affect its net financial expense for the current year.
These unrealized Forex gains worth FRF 7,498 K (EUR 1,143 K) have therefore been shown in the
current year’s opening reserve.
Translation adjustments arising from the implementation of the conversion method applicable to nonautonomous subsidiaries are registered under financial income for FRF 13,278 K (EUR 2,024 K).
e)
Net exceptional income
Net exceptional income is income which is not derived through the standard operations of a business.
This classification is made according to the capital and operating income account plan.
FRF
31.08.01
Exceptional income/expense - capital transactions
Exceptional income/expense - operating transactions
Other exceptional income/expenses
TOTAL
16,682
-136
-4,762
11,784
EUR
31.08.01
2,543
-21
-726
1,796
FRF
31.08.00
-7
240
76
309
EUR
31.08.00
-1
37
12
47
Net exceptional income is due mainly to the ending of software activities.
81
f)
Corporate income taxes are broken down as follows:
FRF
31.08.01
Deferred tax
Income taxes payable
TOTAL
EUR
31.08.01
-2,525
24,342
21,817
FRF
31.08.00
Pro forma
-385
3,711
3,326
EUR
31.08.00
Pro forma
1,325
16,115
17,440
FRF
31.08.00
Published
202
2,457
2,659
EUR
31.08.00
Published
-179
16,490
16,311
-27
2,514
2,487
Corporate income taxes correspond to the total income taxes of all Group companies.
Taxes are calculated based on temporary differences relating to tax adjustments, consolidation
adjustments and losses carried forward.
Income taxes for the financial year:
FRF
31.08.01
Income before taxes
Non-taxable income and expenses
Theoretical tax (35.33%)
EUR
31.08.01
12,649
-13,559
-322
1,928
-2,067
-49
Non-deductible expenses
Use of non-included deferrable losses
Non-included fiscal year losses
Unused included losses
Income taxes before adjustments
592
-6,161
26,536
1,531
22,176
90
-939
4,045
233
3,381
Rate differences
Rate variation
Other
TOTAL
-632
435
-162
21,817
-96
66
-25
3,326
Deferred taxes are broken down as follows:
31.08.00
Published
Deferred taxes - assets
Deferred taxes - liabilities
TOTAL
31.08.00
Pro forma
10,414
-1,536
8,878
FRF
Variation
10,414
-3,038
7,376
Translation
adjustment
437
2,346
2,783
FRF
31.08.01
-32
1
-31
EUR
31.08.01
1,649
-105
1,544
10,819
-691
10,128
Nature of deferred taxes:
FRF
31.08.01
Nature of deferred taxes
Operating lease adjustments
Temporary differences
Profits on inventory
Elimination of internal income
Losses carried forward
Other consolidation entries
Homogenization
TOTAL
6
419
11,025
176
0
682
-2,180
10,128
EUR
31.08.01
1
64
1,681
27
0
104
-332
1,544
FRF
31.08.00
Pro forma
2
3,088
3,694
115
3,487
-1,910
-1,100
7,376
EUR
31.08.00
Pro forma
0
471
563
18
532
-291
-168
1,124
FRF
31.08.00
Published
2
3,088
3,694
115
3,487
-408
-1,100
8,878
EUR
31.08.00
Published
0
471
563
18
532
-62
-168
82
1,353
Deferred losses at August 31, 2001 are broken down as follows:
FRF
31.08.01
included
not included
Guillemot Corporation SA
Guillemot GmbH (Germany)
Guillemot INC (Canada)
Guillemot SA (Spain)
TOTAL
g)
0
0
0
0
0
0
EUR
31.08.01
included
not included
50,897
978
124,903
8,634
8,399
193,811
0
0
0
0
0
0
7,759
149
19,041
1,316
1,280
29,546
Sectorial information
Fixed asset localization
- by geographic zone:
Breakdown of fixed assets
FRF
31.08.01
EUR
31.08.01
FRF
31.08.00
EUR
31.08.00
Europe
North America
Asia
248 751
118 027
322
37 922
17 993
49
247 179
116 724
245
37 682
17 794
37
Total
367 100
55 964
364 148
55 514
Breakdown of net sales
- by geographic zone:
FRF
31.08.01
EUR
31.08.01
FRF
31.08.00
EUR
31.08.00
Europe
North America
Asia
1 138 144
356 068
65 941
173 509
54 282
10 053
1 132 728
308 501
16 957
172 683
47 031
2 585
Total
1 560 153
237 844
1 458 186
222 299
- by business segment:
Image
Sound
PC accessories
Console accessories
Other
Total
FRF
31.08.01
EUR
31.08.01
830,812
97,050
129,891
167,633
334,767
126,656
14,795
19,802
25,555
51,035
1,560,153
237,844
For the financial year ended August 31, 2000, sales were made up of 33% software, 51% hardware and
16% accessories.
83
h)
Pro forma financial statements
The pro forma financial statements do not include software activities.
FRF
31.08.01
Operating revenues
Purchases and inventory change
Personnel expenses
Other operating expenses
Operating revenues before taxes,
depreciation, amortization and
provisions charges
EUR
31.08.01
FRF
31.08.00
EUR
31.08.00
1,328,376
-873,087
-149,101
-213,002
202,510
-133,101
-22,730
-32,472
1,159,926
-826,242
-93,922
-149,140
176,830
-125,960
-14,318
-22,736
93,186
14,206
90,622
13,815
i)
Assorted information
1. Off balance sheet commitments
Value of guarantees given:
FRF 15,667 K (EUR 2,388 K)
Rental commitments:
FRF 14,553 K (EUR 2,218 K)
Value of pledges given:
Building mortgage for FRF 8,651 K (EUR 1,319 K) and
share pledges worth FRF 10,065 K (EUR 1,534 K) by Logicosoftware.
Value of guarantees received:
0
Pension retirement benefits:
The amount is insignificant due to the young average age
of the workforce.
Value of outstanding
documentary credits:
FRF 35,448 K (EUR 5,404 K)
Value of non-matured discounted notes:
FRF 2,773 K (EUR 422 K)
Minimums guaranteed on licenses:
EUR 37 K and USD 334 K
Uninsured customer inventories financed through factoring: FRF 19,790 K (EUR 3,017 K).
Short-term Forex hedge purchase contracts attached to orders, as opposed to liabilities, for USD 21 M.
Comparing the hedge rate to the USD value at year-end, potential losses amount to FRF 8.2 M.
2. Executive management remuneration
The amount of gross remuneration paid to executive management of the parent company and its
subsidiaries between September 1, 2000 and August 31, 2001 was FRF 900 K (EUR 137 K).
No directors’ fees were paid.
3. Workforce
At August 31, 2001 the Group had 636 employees worldwide, of which 191 were managers. 75% of the
workforce was based in Europe, 23% in North America and 2% in Asia.
4. Switch to the Euro
Companies within the Euro zone were working in euros as of the first day of the 2001/2002 financial
year.
The consequences of the switch have been evaluated, and there will be no significant financial impact
on the activities of the coming financial year.
5. Post-closure events
Since the end of the financial year, the price of Guillemot Corporation shares decreased to levels
beneath their worth at August 31, 2001. On December 3, 2001, one Guillemot Corporation share was
worth EUR 21.
84
6)
Independent Auditors’ Report
On the consolidated financial statements for the August 31, 2001 year-end
To the Board of Directors and Shareholders of Guillemot Corporation,
In compliance with the assignment entrusted to us by your Annual General Meeting, we hereby report
to you on the August 31, 2001 financial year-end and the audit of the accompanying consolidated
financial statements expressed in French francs.
The Annual General Meeting of February 15, 2002 decided not to vote on the year’s statements and to
delay their approval, thus allowing the Board of Directors to approve a revised version.
The consolidated financial statements have now been approved by the Board of Directors.
Our role is to express our opinion on these consolidated statements based on our audit.
We have conducted our audit in accordance with generally accepted auditing standards.
These standards require due diligence in order to ascertain with reasonable certainty that the annual
financial statements are free of material misstatement. An audit consists of an examination, on a
sampling basis, of evidence relevant to the amounts and disclosures made in the financial statements.
An audit also includes an assessment of the accounting principles applied, as well as of the significant
estimates made in the presentation of the financial statements and of their overall presentation. It is
our view that the audit we have carried out forms a true and fair basis for the opinion expressed below.
In our opinion, the company’s consolidated financial statements give a true and fair view of the
consolidated financial position, assets and liabilities and net income of Guillemot Corporation and its
subsidiaries, with the following observations:
- Deferred tax assets linked to financial deficits, which may be calculated against future income, were
re-examined in a very prudent and restrictive manner; as a result, no deferred tax assets have been
accounted for in relation to the year’s deficits.
- Treasury stock has been accounted for as financial fixed assets in the financial statements.
Consolidated shareholders’ equity has been thereby reduced, and the provision for depreciation of
these shares has been abolished, in accordance with article 271 of regulation 99-02.
We have also performed, in accordance with professional standards, the specific verifications required
by law regarding the information in the management report. We have no observations to make
concerning the fairness of the information and its consistency with the consolidated financial
statements.
INDEPENDENT AUDITORS
André METAYER
Roland TRAVERS
85
II. GUILLEMOT CORPORATION AUGUST 31, 2001 YEAR-END
FINANCIAL STATEMENTS
All entries are in FRF and EUR K.
A.
Balance sheet at August 31, 2001 year-end
ASSETS
Gross
31.08.01
Amort/Dep
31.08.01
Net
31.08.01
EUR
31.08.01
Net
31.08.00
EUR
31.08.00
138 381
44 471
369 495
15 440
12 563
21 483
122 941
31 908
348 012
18 742
4 864
53 054
96 704
25 790
287 279
14 742
3 932
43 795
Fixed assets
552 347
49 486
502 861
76 661
409 773
62 469
Inventories
Other receivables
Securities
Cash
254 420
3 207
395 788
108 024
923
5 065
767 427
14 345
0
0
0
224
0
14 569
240 075
3 207
395 788
108 024
699
5 065
752 858
36 599
489
60 337
16 468
107
772
114 772
180 360
14 346
430 192
133 798
0
69 150
827 846
27 496
2 187
65 582
20 397
0
10 542
126 204
18 876
0
18 876
2 878
16 684
2 543
1 338 650
64 055
1 274 595
194 311
1 254 303
191 217
Prepaid expenses and accrued income
TOTAL ASSETS
LIABILITIES AND
Share capital
Reserves
Net income
Shareholders' equity
Tax and social security liabilities
Fixed asset liabilities
Other liabilities
Total liabilities
Adjustment accounts
TOTAL LIABILITIES AND
FRF
31.08.01
EUR
31.08.01
FRF
31.08.00
EUR
31.08.00
30,187
503,216
8,600
-45,059
496,944
4,602
76,715
1,311
-6,869
75,759
29,543
462,082
7,921
13,584
513,130
4,504
70,444
1,208
2,071
78,226
4,306
656
4,124
629
357,889
162,156
1,670
10,298
239,836
771,849
54,560
24,721
255
1,570
36,563
117,668
232,313
201,548
6,634
19,458
269,575
729,528
35,416
30,726
1,011
2,966
41,096
111,216
1,496
228
7,521
1,147
1,274,595
194,311
1,254,303
191,217
86
B.
Statement of income at August 31, 2001 year-end
FRF
31.08.01
Net sales
Other operating revenues and
expense transfers
Total operating revenues
EUR
31.08.01
FRF
31.08.00
EUR
31.08.00
1 108 077
168 925
970 760
147 991
7 385
1 115 462
1 126
170 051
20 642
991 402
3 147
151 138
976 195
-65 592
131 701
1 426
11 063
9 911
148 820
-9 999
20 078
217
1 687
1 511
920 104
-90 812
96 636
1 370
13 783
8 900
140 269
-13 844
14 732
209
2 101
1 357
23 989
1 088 693
3 657
165 970
19 015
968 996
2 899
147 722
Operating income
26 769
4 081
22 406
3 416
Net gain on
securities disposal
Interest and other financial income
Provisions recoveries
Forex gains
Total financial income
61
12 902
3 462
22 110
38 535
9
1 967
528
3 371
5 875
323
10 941
1 189
37 947
50 400
49
1 668
181
5 785
7 683
Financial provisions charges
Interest and other financial expense
Forex losses
Total financial expenses
26 566
30 687
39 456
96 709
4 050
4 678
6 015
14 743
5 229
17 035
32 355
54 619
797
2 597
4 932
8 327
Financial provisions charges
Income before exceptional items
Net exceptional expense
Income before taxes
Net income
-58 174
-31 405
-13 654
-45 059
0
-45 059
-8 869
-4 788
-2 082
-6 869
0
-6 869
-4 219
18 187
-165
18 022
4 438
13 584
-643
2 773
-25
2 747
677
2 071
Purchases
Inventory change
External expenses
Taxes and duties
Personnel expenses
Other expenses
Depreciation, amortization and
provisions charges
Total operating expenses
C.
Selected performance results
The principal performance results are as follows:
FRF
31.08.01
Gross profit margin
Added value
Gross operating income
Operating income
182,948
65,774
53,285
26,769
EUR
31.08.01
27,890
10,027
8,123
4,081
FRF
31.08.00
132,287
44,833
29,679
22,406
EUR
31.08.00
20,167
6,835
4,525
3,416
87
D.
Cash flow statement
FRF
31.08.01
EUR
31.08.01
FRF
31.08.00
EUR
31.08.00
Operating activities
Net income
Amortization, depreciation and other provisions charges
Amortization, depreciation and other provisions recovery
Net gains and losses on disposals
Cash and cash equivalents provided by operations
-45 059
50 555
-4 124
0
1 372
-6 869
7 707
-629
0
209
13 583
24 243
-5 926
-8
31 892
2 071
3 696
-903
-1
4 862
Increase in working capital requirements
Increase in non-working capital requirements
Cash and cash equivalents applied to operating activities
-68 370
-12 121
-80 491
-10 423
-1 848
-12 271
-68 741
-4 994
-73 735
-10 479
-761
-11 241
Investment activities
Intangible fixed asset acquisition
Tangible fixed asset acquisition
Intangible and tangible fixed asset disposals
Financial fixed asset acquisitions
Financial fixed asset disposals
Deferred expenses
Cash and cash equivalents applied to investment activities
-34 420
-23 664
0
-82 216
0
0
-140 300
-5 247
-3 608
0
-12 534
0
0
-21 389
-92 171
-18 497
97
-263 569
13 565
-1 219
-361 794
-14 051
-2 820
15
-40 181
2 068
-186
-55 155
Financing activities
Debt issuance
Debt repayment
Shareholders' current account repayment
Cash and cash equivalents provided by financing activities
0
174 916
0
0
174 916
0
26 666
0
0
26 666
313 828
30 211
-1 080
-53 066
289 893
47 843
4 606
-165
-8 090
44 194
Cash and cash equivalents net decrease
Opening balance
Closing balance
-44 503
20 079
-24 424
-6 784
3 061
-3 723
-113 744
133 823
20 079
-17 340
20 401
3 061
E.
Appendix to August 31, 2001 year-end financial statements
The notes and tables below, presented in thousands of French Francs and Euros, are an integral part of
the parent company financial statements and represent an appendix to the balance sheet, which
amounted to FRF 1.275 B (EUR 194.37 M) before allocation for the August 31, 2001 year-end, and to
the income statement which showed a net loss of FRF 45,059,444 (EUR 6,869,268).
The financial year is for a period of twelve months, covering the period from September 1, 2000 to
August 31, 2001.
1)
SSiignificant events
The Guillemot Corporation Group made a strategic move over the course of the financial year to end
its software distribution activities, which came to a halt on August 31, 2001.
The console and PC accessories markets in both Europe and the United States experienced slowdowns
in growth over the course of the year. Nonetheless, market share for the Hercules and Thrustmaster
brands still managed to increase in the main countries in which their respective products are distributed.
Tech companies experienced significant financial declines right across the board. Guillemot
Corporation registered a provision for the depreciation of its treasury stock at year-end.
88
2)
Financial and accounting reporting policies and methods
a)
Financial accounting reporting principles
Generally accepted, accounting practices are applied in accordance with the principle of conservatism
and following other accounting principles:
- going concern
- consistency of application of accounting policies and methods
- clearly identifiable accounting periods
- other generally recognized principles regarding the preparation and presentation of financial
statements.
All items are recorded in financial statements on the basis of their historic costs.
b)
Financial accounting reporting policies and methods
Goodwill
Goodwill results from excess earnings ability acquired with a purchased company as a result of its
customer base, market share, expertise and so on.
Purchased company goodwill is not subject to amortization and is calculated based on a range of
elements, rather than on aggregation of individual element values.
The criteria used to calculate the value of goodwill are reviewed on an annual basis. The different
elements taken into account are net sales, clientele, agreements with major distribution networks within
the market radius zone in question, and future prospects.
A provision for depreciation will be implemented at closing if the fair value of goodwill falls below the
book value.
Brands
The brands acquired are reviewed annually based on their contribution to the commercial activities of
the Group. This contribution is evaluated against criteria such as whether or not a brand ranks among
the highest sellers in its field and net sales generated.
Research and development costs
Development production costs are determined in accordance with the Conseil National de la
Comptabilité (National Accounting Advisory Board) pronouncement of April 1987. Applied research
and development costs relating to clearly identifiable projects with a very strong chance of commercial
success are capitalized as intangible fixed assets on an ongoing basis as the project is developed.
Amortization of these intangible fixed asset costs begins when the related product is commercially
released and continues over the commercial life of the product, normally a period of between one and
three years (maximum). Amortization is ordinarily on a straight-line basis; however, where sales are
below forecast, incremental amortization is recorded.
Office automation software
Office automation software is amortized straight-line over a period of three years.
Tangible fixed assets are recorded at their historic cost and depreciated on a straight-line basis over
their economic lives:
- construction:
20 years
- leasehold improvements:
10 years
- computer equipment:
3 years
89
- office equipment:
- office furniture:
- vehicles :
5 years
5 years
4 years
Financial fixed asset securities, including company shares, are recorded at their acquisition costs
including related costs. The value of each financial fixed asset is reviewed taking into account the
Group’s pro rata share of any asset re-evaluation, as well as its future growth potential. When this
value is less than the recorded value, an allowance is recorded for the amount of the difference.
Quoted company shares are evaluated at the average price for the last month, so long as this is greater
than the previous value.
Treasury stock obtained in the context of the company’s share buyback program without express
intention is registered as financial securities.
Inventories
Inventories are evaluated at their supply cost. The gross value of inventory includes the purchase price
and accessory fees.
Depreciation provisions are recorded when the cost of inventory is greater than its probable resale
value.
Advances and prepayments on account
The company pays license fees in advance to third parties for distribution and production rights.
Once a contract is signed, guaranteed amounts must be paid. When billed for by third parties, these
amounts are registered in a prepayment account and amortized on a pro rata basis according to product
sales. When guaranteed amounts have not yet been billed for in their entirety, an agreement is recorded
for the balance and is not registered on the balance sheet.
At year-end, the unamortized amounts are reviewed against the related products’ sales potential, and
where sales prospects are insufficient, additional amortization is recorded.
Trade accounts receivable are recorded at their book value. A bad-debt allowance is established at the
financial year-end based on an assessment of collection probabilities of the trade accounts receivable.
Translation of foreign currency denominated receivables and payables
Foreign currency denominated receivables and payables not covered by short-term Forex hedge sales or
purchase contracts are converted at their rate at August 31, 2001, with the resulting loss or gain
recorded in the balance sheet under a separate heading. A provision for foreign exchange loss is
established where a loss is deemed likely to occur.
Forex gains or losses resulting from short-term Forex hedge sales or purchase contracts attached to
receivables and liabilities are included in the net financial expense.
Securities
Parent company shares acquired by Group on the stock market with a view to price stabilization are
included in this category.
A provision is made for unrealized potential depreciation.
Provisions for Forex losses relating to the conversion of receivables and debts into foreign currencies,
as well as commercial liabilities and disputes, are included under this heading.
90
3)
a)
Balance sheet accounts explanatory notes
Intangible fixed assets are broken down as follows:
Gross book values
FRF
31.08.00
R&D current marketing costs - R&D
R&D current production costs - R&D in progress
Information systems
Brands and goodwill
TOTAL
FRF
Increase
15 220
9 799
0
77 645
1 297
103 961
FRF
Decrease
13 516
25 694
7 824
219
803
48 056
FRF
31.08.01
0
13 636
0
0
0
13 636
EUR
31.08.01
28 736
21 857
7 824
77 864
2 100
138 381
4 381
3 332
1 193
11 870
320
21 096
During the financial year, the company began to make changes to its information systems.
Computer user licenses, contracts acquired and capitalized production are included under fixed assets in
progress at closing. A progressive implementation is projected over the course of the next few years.
Accumulated amortization
FRF
31.08.00
R&D current marketing costs
TOTAL
b)
FRF
Increase
6,807
450
7,257
FRF
Decrease
7,609
574
8,183
FRF
31.08.01
0
0
0
EUR
31.08.01
14,416
1,024
15,440
2,198
156
2,354
Tangible fixed assets are broken down as follows:
Gross book values
Land
Buildings and leasehold improvements
Vehicles
Computer equipment and furniture
Fixed assets under construction
TOTAL
Accumulated depreciation
Land
Buildings and leasehold improvements
Vehicles
Computer equipment and furniture
Fixed assets under construction
TOTAL
FRF
31.08.00
543
6 454
6 379
107
3 545
12 938
29 966
FRF
31.08.00
0
339
2 726
68
1 042
0
4 175
FRF
Increase
895
8 592
7 638
0
3 431
8 224
28 780
FRF
Increase
0
834
5 845
27
1 682
0
8 388
FRF
31.08.01
FRF
Decrease
0
5
0
0
0
14 270
14 275
FRF
Decrease
1 438
15 041
14 017
107
6 976
6 892
44 471
FRF
31.08.01
0
0
0
0
0
0
0
0
1 173
8 571
95
2 724
0
12 563
EUR
31.08.01
219
2 293
2 137
16
1 063
1 051
6 780
EUR
31.08.01
0
179
1 307
14
415
0
1 915
91
Fixed assets under construction are comprised of buildings currently under construction, as well as
manufacturing equipment currently being manufactured on 31st August 2000.
c)
Financial fixed assets are broken down as follows:
FRF
31.08.00
Financial securities
Deposits and guarantees
TOTAL
FRF
Increase
287,226
53
287,279
FRF
Decrease
82,195
49
82,244
FRF
31.08.01
EUR
31.08.01
369,421
74
369,495
0
28
28
56,318
11
56,329
A depreciation provision for FRF 1,576 K has been registered for Guillemot SA (Spain) shares.
A provision has been registered for FRF 19,907 K (EUR 3,035 K) for the own shares held by the
company.
d)
Inventories
Inventories are broken down as follows:
FRF
Gross
31.08.01
Merchandise
Finished goods
Goods in progress and new materials
TOTAL
e)
FRF
Provision
31.08.01
16 444
34 197
203 779
254 420
FRF
Net
31.08.01
0
5 868
8 477
14 345
EUR
Net
31.08.01
16 444
28 329
195 302
240 075
2 507
4 319
29 774
36 599
Advances and payments on account are comprised primarily of operating licenses.
These are charged against the products to which they relate on a pro rata basis.
f)
Trade accounts receivable are broken down as follows:
FRF
Gross
31.08.01
Customers
TOTAL
395,788
395,788
FRF
Provision
31.08.01
FRF
Net
31.08.01
0
0
395,788
395,788
EUR
Net
31.08.01
60,337
60,337
FRF
Net
31.08.00
430,192
430,192
EUR
Net
31.08.00
65,582
65,582
92
g)
Receivables and debts/liabilities
RECEIVABLES STATEMENT
Gross value
at 31.08.01
Fixed assets receivable
Other financial fixed assets
Current assets receivable
Advances
State (VAT and other receivables)
Intercompany
Other
Prepaid expenses
TOTAL
DEBTS/LIABILITIES STATEMENT
Due in less
than 1 year
Due in 1
year or more
74
0
74
3,208
395,788
21,155
83,530
3,338
9,235
516,328
3,208
395,788
21,155
83,530
3,338
9,235
516,254
0
0
0
0
0
0
74
Gross value
at 31,08,01
Financial institution loans
Bonds
Medium-term bank debt
Bank overdrafts and currency advances
Tax and social security liabilities
Other liabilities
Fixed asset liabilities
Intercompany
TOTAL
12 388
114 412
200 500
30 413
162 156
1 670
8 245
10 298
230 405
770 487
Loans entered into during the fiscal year
Repaid during the fiscal year through bond conversion
Loans repaid during the fiscal year
Loans received from individuals
176 500
30 593
1 549
0
Due in less
than 1 year
2 925
0
200 500
30 413
162 156
1 670
8 069
10 298
230 405
646 436
Due in 1
year or more
9 463
114 412
0
0
0
0
176
0
0
124 051
The company has fixed-rate loans worth FRF 3,704 K (EUR 565 K) and variable-rate loans worth FRF
239,597 K (EUR 36,526 K). Currency loans amount to USD 2,738 K.
Guillemot Corporation issued bonds during the 1998/99 financial year with the following specifications,
taking into account the two-for-one common share split which took place in February 2000:
Issue price:
Effective settlement date:
Duration:
Annual interest:
Conversion
of bonds into shares:
429,434 convertible bond strips issued at a nominal value of
EUR 70 each
EUR 70
July 13, 1999
5 years and 50 days
2.75% per year, amounting to EUR 1.925 per bond strip payable
on August 31 of each year as of August 31, 1999.
1 converted bond gives the holder the right to 2 Guillemot
Corporation shares with a nominal value of FRF 5 each.
3.38% (when not converted)
93
Premium amortization:
Full amortization by August 31, 2004 through redemption at
EUR 72.45, amounting to 103.5% of issue price.
64,375 bonds were converted into shares during the course of the financial year, giving rise to the
creation 128,750 Guillemot Corporation shares. 240,745 bonds remain in circulation, allowing for the
potential creation of 481,490 shares.
h)
Securities
This heading includes Guillemot Corporation shares acquired within the context of price stabilization.
FRF
Gross
31.08.01
FRF
Provision
31.08.01
FRF
Net
31.08.01
EUR
Net
31.08.01
FRF
Net
31.08.00
EUR
Net
31.08.00
Securities
923
224
699
107
0
0
TOTAL
923
224
699
107
0
0
i)
Adjustment accounts
- Asset accounts:
FRF
31.08.01
Prepaid expenses
Deferred expenses allocated over a number
of fiscal years
Bond redemption premium
Translation adjustment
TOTAL
EUR
31.08.01
FRF
31.08.00
EUR
31.08.00
9,235
1,408
3,460
527
3,917
2,259
3,465
18,876
597
344
528
2,878
5,943
3,818
3,462
16,683
906
582
528
2,543
- Deferred expenses allocated over a number of years relate primarily to bond issuance costs, which are
amortized over the life of the bond, and the Thrustmaster and Hercules brand acquisition expenses,
which are amortized over five years.
- The bond redemption premium is amortized pro rata over the life of the bond. 64,375 bonds were
converted during the financial year, resulting in a decrease in the gross value of the premium of FRF
1,035
K (EUR 158 K), as well as a recovery of prior amortization of FRF 229 K
(EUR 35 K).
- Translation adjustments arise from the translation at closing rates of receivables and liabilities which
are denominated in foreign currencies. A provision for unrealized losses has been established.
- Liabilities accounts:
FRF
31.08.01
Deferred revenues
Translation adjustments
TOTAL
1,179
317
1,496
EUR
31.08.01
FRF
31.08.00
180
48
228
54
7,467
7,521
EUR
31.08.00
8
1,138
1,147
- Translation adjustments arise from the translation, at closing rates, of receivables and liabilities
denominated in foreign currencies.
94
j)
Accrued revenues
EUR
31.08.01
FRF
31.08.01
Various debtors
Suppliers' credit to be received
Accrued interest on current accounts
Accrued revenues
TOTAL
k)
l)
1,664
497
0
948
3,109
254
76
0
145
474
Balance at
31.08.00 after
net income
allocation
99/00
Share capital
increase:
shares
issuance
FRF
net income
allocation
99/00
2,357
4,606
0
4,211
11,174
359
702
0
642
1,703
Share capital
increase:
bond
conversion
Net
income
FRF
allocation balance
at
at
31.08.01
31.08.01
EUR
balance
at
31.08.01
29,543
0
29,543
0
644
0
30,187
4,602
462,081
758
7,164
13,584
513,130
12,905
679
0
-13,584
0
474,986
1,437
7,164
0
513,130
0
0
0
0
0
28,230
0
0
0
28,874
0
0
0
-45,059
-45,059
503,216
1,437
7,164
-45,059
496,945
76,715
219
1,092
-6,869
75,759
Accrued expenses
FRF
31.08.01
Financial institution loans - accrued interest
Accrued expenses - expected invoices
Customer credits to be issued
Accrued taxes and social security benefits
Other
TOTAL
m)
EUR
31.08.00
Shareholders’ equity
FRF
balance
at
31.08.00
Share capital
Share issuance/
conversion premium
Legal reserve
Other reserves
Net income
TOTAL
FRF
31.08.00
597
19,343
5,930
1,305
2,080
29,255
EUR
31.08.01
FRF
31.08.00
91
2,949
904
199
317
4,460
1,016
7,712
3,170
1,795
1,877
15,570
EUR
31.08.00
155
1,176
483
274
286
2,374
Related companies’ financial year transactions and financial year-end balances
Marketable securities
FRF 265,650 K (EUR 40,498 K)
Current assets
Other receivables
FRF 342,949 K (EUR 52,282 K)
FRF 83,302 K (EUR 12,699 K)
Liabilities
Other liabilities
FRF 49,233 K (EUR 7,506 K)
FRF 230,781 K (EUR 35,182 K)
95
Financial income
Financial expenses
n)
FRF 12,082 K (EUR 1,842 K)
FRF 13,406 K (EUR 2,044 K)
Balance sheet provisions and allowances
FRF
at 31.08.00
Charges
at 31.08.01
Recoveries
at 31.08.01
FRF
at 31.08.01
EUR
at 31.08.01
Risk provisions
Foreign exchange
Expenses
Total
3 462
661
4 123
3 465
841
4 306
3 462
661
4 123
3 465
841
4 306
528
128
Depreciation provisions
Inventories
Bad debts
Securities
Total
0
8 468
0
0
8 468
1 576
5 877
0
20 131
27 584
0
0
0
0
0
1 576
14 345
0
20 131
36 052
240
2 187
0
3 069
656
5 496
96
Share capital
Number of shares
Nominal value
Amount (FRF)
Amount (EUR)
At 31/08/00
5,908,681
5
29,543,405
4,503,863
Capital increase
. bond conversion
. new shares issuance
. exercise of warrants
At 31/08/01
128,750
0
0
6,037,431
5
5
5
5
643,750
0
0
30,187,155
98,139
0
0
4,602,002
In the context of the bonds issued during the 1998/99 financial year, share subscription warrants were
attached to bonds, each of which had the following attributes:
One warrant is attached to each bond; one warrant gives its holder the right to subscribe to one
Guillemot Corporation share with a nominal value of FRF 5. The subscription price is EUR 45.
No share subscription warrants were exercised during the financial year. 429,212 remain available for
exercise.
Stock option plans:
1st plan
2nd Plan
96,466
100,000
FRF 5
FRF 5
EUR 16.76 EUR 36
(FRF
(FRF 110)
236.14)
27.11.03
06.12.04
through 14.11.08
through 06.12.09
Number of shares
Nominal value
Subscription price
Period of validity
Options not yet exercised
at 31.08.01
o)
96,466
100,000
3rd plan
4th plan
28,000
72,000
FRF 5
FRF 5
EUR 29 EUR 29
(FRF
190.22)
(FRF 190.22)
17.04.05
18.04.02
through 17.04.11
through 18.04.11
28,000
72,000
Advances and loans to executive management
No loans or advances have been made to executive management, in accordance with Article L.225-43
of the Commercial Code.
97
p)
Shareholders’ equity analysis (Article 135 of the decree of March 23, 1967)
Fiscal year
00/01
Share capital
Number of ordinary shares (1)
Number of preferred shares
Maximum number of potential new shares through
Bond conversion
Stock option plan
Exercise of subscription rights
Net sales (excluding VAT)
Income before income taxes, profit sharing, amortization
Corporate income taxes
Employees' profit-sharing plan
Net income
Distributed dividends
4)
a)
97/98
29 543
5 908 681
0
1 235 918
610 240
196 466
429 212
970 760
36 339
4 438
0
13 583
0
23 530
2 353 000
0
692 384
429 434
48 233
214 717
462 985
23 806
4 625
0
13 171
0
20 000
2 000 000
0
0
0
0
0
130 254
5 807
1 672
0
1 978
0
0,23
5,40
8,15
2,06
-7,46
0
37
7 429
3 635
2,30
0
46
9 576
4 372
5,60
0
36
8 278
3 211
0,99
0
43
6 153
2 749
Statement of income explanatory notes
Net sales analysis by geographic region and business segment
France
231,926
35,357
International
876,151
133,568
Hardware
808,896
Accessories
299,181
123,315
45,610
FRF at 31.08.01
EUR at 31.08.01
FRF au 31.08.01
EUR at 31.08.01
b)
98/99
30 187
6 037 431
0
1 207 168
481 490
296 466
429 212
1 108 078
1 372
0
0
-45 059
0
Earnings per share - after income taxes and before
amortization (FRF)
Earnings per share - after income taxes and after
amortization (FRF)
Dividends per share
Average number of employees
Payroll expense
Social contributions
99/00
FRF
31.08.01
Provision and allowance increases
Forex gains/losses
Interest and other financing expense
Other financial income
TOTAL
-23,102
-17,347
-17,785
60
-58,174
EUR
31.08.01
-3,522
-2,645
-2,711
9
-8,869
FRF
31.08.00
-4,040
5,591
-6,094
323
-4,220
EUR
31.08.00
-616
852
-929
49
-643
Foreign exchange and market risk:
The Guillemot Corporation Group had short-term Forex hedge sales and purchase contracts still in
place at August 31, 2001 year-end.
Forex gains or losses resulting from contracts relating to receivables and liabilities are included in the
net financial expense amount.
98
At August 31, 2001, the Guillemot Corporation Group had Forex hedge sales contracts not allocated to
current liabilities. The short-term value of these contracts is compared against the closing value of each
currency concerned. The corresponding potential amount of gain or loss is not included in the net
financial expense but is indicated instead in off balance sheet commitments.
c)
Net exceptional expenses
FRF
31.08.01
Operating transactions net charges
Asset disposals - net income
Exceptional net charges - transfers
TOTAL
EUR
31.08.01
FRF
31.08.00
-2,082
0
0
-2,082
-13,654
0
0
-13,654
EUR
31.08.00
-184
8
11
-165
-28
1
2
-25
Net exceptional expenses are comprised primarily of additional amortization on software licenses after
use.
d)
FRF
31.08.01
Taxes on normal income
Taxes on exceptional income
Total
EUR
31.08.01
0
0
0
FRF
31.08.00
4,497
-59
4,438
0
0
0
EUR
31.08.00
686
-9
677
The deferrable financial loss will include:
- The deduction of capital increase fees calculated on issuance premiums.
- The net decrease/increase in future income tax liability:
- Organic provision
- Forex changes
e)
FRF 380 K (EUR 58 K)
FRF 317 K (EUR 48 K)
FRF 697 K
Other information
1. Average workforce
Total
31.08.01
Management
37
Employees
14
23
2. Financial commitments
Value of guarantees given:
Value of guarantees received:
Value of non-matured discounted notes:
Value of pledges:
Value of outstanding documentary credits:
Pension retirement benefits:
FRF 25,000 K (EUR 3,811 K)
DEM 10,000 K (EUR 5,113 K)
FRF 15,667 K (EUR 2,388 K)
0
0
0
FRF 35,448 K (EUR 5,404 K)
The amount is insignificant, due to the young average age
of the workforce.
99
Minimums guaranteed on licenses:
EUR 37 K and USD 334 K
Operating leases:
Balance sheet acct
Payments (excl. taxes)
Current FY
To date
Other tangible fixed
assets
EUR 31.08.01
253,622
38,664
Balance sheet
Acquisition
account
date
Other tangible fixed
assets
21/07/2000
EUR 31.08.01
Payments outstanding (excl. taxes)
to 1 yr
1-5 years
5+ yrs Total
295,904
45,110
253,632
38,666
Amortization
period
3 years
211,360
32,222
Acquisition
cost
704,058
107,333
0
0
Total
Residual purchase
payments price (excl. taxes)
464,992
70,888
760,896
115,998
7,040
1,073
Amortization charges
Prior FYs
Current FY
To date
27,005
4,117
234,686
35,778
261,691
39,895
Net
value
442,367
67,438
Short-term Forex hedge purchase contracts attached to orders, as opposed to liabilities, are held for
USD 21 M. Comparing the hedge rate to the USD value at year-end, potential losses amount to FRF
8.2 M.
3. Executive management remuneration
Executive management remuneration amounted to FRF 900 K (EUR 137 K) for the financial year
between September 1, 2000 and August 31, 2001.
4. Switch to the Euro
The company began working in Euros from the first day of the 2001/2002 financial year.
The consequences of the switch have been evaluated, and there will be no significant financial impact
on the activities of the coming financial year.
100
Listing of subsidiaries and investments
Currency Registered
office
Financial information (local currency K)
Share
capital
Book value of shares
owned (FRF K)
Other
Share Net income Net income
of last
share- ownerof last
holders' ship completed completed
equity
fiscal year fiscal year
(net
(before
taxes)
income
incl.)
Gross
Guillemot France S.A
Guillemot Ventures S.A
Guillemot Administration SARL
Guillemot Conditionnement SARL
Guillemot Logistique SARL
Guillemot Recherche et Développement SARL
Guillemot Studio Graphique SARL
Guillemot Support Technique SARL
Thrustmaster SA
Hercules Technologies SA
Guillemot S.A (Belgium)
Logicosoftware S.A (Switzerland)
Guillemot S.A (Spain)
Guillemot GmbH (Germany)
Guillemot BV (Holland)
Guillemot Limited (Hong Kong)
Guillemot Inc (United States)
Hercules Technologies Inc (United States)
Guillemot Online.com Inc (United States)
Thrustmaster Inc (United States)
Guillemot Inc (Canada)
GameLoft SA
FRF
FRF
FRF
FRF
FRF
FRF
FRF
FRF
FRF
FRF
GBP
BEF
CHF
ESP
DEM
NLG
HKD
USD
USD
USD
USD
CAD
FRF
Carentoir
Carentoir
Carentoir
Carentoir
Carentoir
Carentoir
Carentoir
Carentoir
Carentoir
Carentoir
Croydon
Brussels
Lausanne
Barcelona
Nüremberg
Huizen
27 808
230 000
50
50
50
50
50
67
250
250
100
7 000
150
40 000
1 000
Hong Kong
1
100
1
1
1
12 100
132 265
Walnut Creek
Walnut Creek
Walnut Creek
Walnut Creek
Montreal
Rennes
40
40 824
-115
1460
779
6 489
546
170
564
233
156
-611
45 277
3 765
-233 033
1 767
728
6 874
213
-30 773
-185 409
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0,08%
15%
291 964
7
16 831
12 990
87 568
11 248
2 904
16 122
9 923
7 003
10 856
371 775
26 300
1 490 063
73 352
17 985
45 470
653
74 380
NA
17 335
-922
342
474
1 674
163
77
170
182
161
-661
42 245
2 085
-224 690
782
1 324
2 259
19
3 484
-434 757
Value of
loans and
advances
to
company
(FRF K)
Value of pledges
and guarantees
given
Net
27 645
230 000
27 645
230 000
50
50
50
50
50
67
249
249
50
50
50
50
50
67
249
249
985
2 728
3 000
1 576
985
2 728
3 000
0
100
118
150
50
7
7
7
39
100
118
150
50
7
7
7
39
20 000
20 000
0
0
0
-
1 200
200
700
500
300
-
21 875
0
2 812
0
-
1 500
0
0 DEM 10,000 K
0
0 FRF 25,000 K
358
0
0
0
29 346
0
-
101
5)
Independent Auditors’ Report for the August 31, 2001
financial year-end
As part of our auditing duties, we hereby present you with our report for the financial year ended
August 31, 2001, covering:
- our audit of annual accounts for the company GUILLEMOT CORPORATION, as enclosed
with this report;
- the specific verifications and information required by law.
The annual financial statements have been prepared by the Board of Directors. It is our task to
give an opinion on these annual financial statements, on the basis of our audit.
The Annual General Meeting of February 15, 2002 decided not to vote on the year’s statements
and to delay their approval, thus allowing the Board of Directors to approve a revised version.
The Board of Directors’ meeting of February 25, 2002 approved the financial statements
contained in this document, having accounted for treasury stock as fixed assets as opposed to
investment shares.
I- Opinion on the annual financial statements
We have conducted our audit in accordance with generally accepted auditing standards. These
standards require due diligence in order to ascertain with reasonable certainty that the annual
financial statements are free of material misstatement. An audit consists of an examination, on a
sampling basis, of evidence relevant to the amounts and disclosures made in the financial
statements. An audit also includes an assessment of the accounting principles applied, as well as
of the significant estimates made in the presentation of the financial statements and of their
overall presentation. It is our view that the audit we have carried out forms a true and fair basis
for the opinion expressed below.
We hereby certify that the annual financial statements provide a true and fair view of the result
obtained for the period in question and of the financial situation and assets of the company at the
end of the accounting period.
II- Specific verifications and information
In accordance with accepted professional standards, we have also performed the specific
verifications required by law.
We have no observations to make concerning the accuracy of the information in the Board of
Directors’ report, or in the documents concerning the financial situation and annual accounts as
addressed to shareholders, or their conformity with the annual accounts.
André METAYER
Roland TRAVERS
102
6)
Independent Auditors’ special report on the regulated
agreements for the August 31, 2001 year-end
As Statuary Auditors, we hereby present to you our report on the regulated agreements.
Pursuant to Article 225-40 of the Commercial Code, we have been advised of the agreements
that have been subject to prior authorization by your Board of Directors.
It is not incumbent upon ourselves to look for other agreements that may exist, but on the basis
of the information given to us, it is our duty to inform you of the essential features and details of
those agreements that we have been made aware of, without having to pass judgment on their
usefulness and validity. According to the provision of Article 92 of the decree of March 23, 1967,
it is your duty to assess whether it is your interests to enter into these agreements before
approving them.
We have carried out our work in accordance with professional standards; these standards require
due diligence procedures in order to ascertain that the information provided to us corresponds to
the basic documents from which it comes.
A – RESOLUTIONS APPROVED DURING THE CURRENT FINANCIAL YEAR
1 – Lease established with Guillemot France SA on September 1, 2000
Directors involved: Claude, Michel, Gérard, Yves and Christian Guillemot
Terms: the monthly rent is fixed at FRF 6,020 Before Taxes (EUR 917.74); payment of a 3month rental deposit for FRF 18,060 BT (EUR 2,753.23).
Rent paid out over the financial year amounted to FRF 72,240 BT (EUR 11,012.92).
Your Board of Directors approved this agreement on August 30, 2000.
2 – Lease established with Guillemot Administration SARL on September 1, 2000
Director involved: Christian Guillemot
Terms: the monthly rent is fixed at FRF 2,520 BT (EUR 384.17); payment of a 3-month rental
deposit for FRF 7,560 BT (EUR 1,152.51).
3 – Lease established with Guillemot Recherche et Développement SARL on September 1,
2000
Director involved: Claude Guillemot
Rent paid out over the financial year amounted to FRF 48,480 BT (EUR 7,390.73)
4 – Lease established with Thrustmaster SA on September 1, 2000
103
5 – Lease established with Guillemot Conditionnement France SARL on December 1,
2000
Terms: the monthly rent is fixed at FRF 29,930 BT (EUR 4,562.80); payment of a 3-month rental
Your Board of Directors approved this agreement on November 29, 2000.
6 – Lease established with Guillemot Logistique France SARL on December 1, 2000
Terms: the monthly rent is fixed at FRF 11,930 BT (EUR 1,818.72); payment of a 3-month rental
7 – Lease established with Hercules Technologies SA on December 1, 2000
Rent paid out over the financial year amounted to FRF 48,420 (EUR 7,381.58).
8– Acquisition of Guillemot Participations SA company shares
Nature and subject: purchase of Guillemot Participations company shares
Terms: On April 6, 2001 your company purchased 389,468 Guillemot Participations SA company
shares at EUR 27.40 each. The total amount of this transaction was EUR 10,671,423.20 (FRF
69,999,947.48).
Your Board of Directors approved this agreement on April 6, 2001.
9– Acquisition of Guillemot Ventures SA company shares
Nature and subject: purchase of Guillemot Ventures SA company shares from Yvette Guillemot
and Claude, Michel, Gérard, Yves and Christian Guillemot
Terms: on May 23, 2001 your company purchased 60 Guillemot Ventures SA shares at FRF 10
each from Yvette Guillemot and Claude, Michel, Gérard, Yves and Christian Guillemot.
The total amount of this transaction was FRF 600 (EUR 91.47).
Your Board of Directors approved this agreement on May 23, 2001.
10 – Sale of Guillemot Ventures SA company shares
Nature and subject: sale of Guillemot Ventures SA company shares to Yvette Guillemot and
Claude, Michel, Gérard, Yves and Christian Guillemot
Terms: on August 20, 2001, your company sold 60 Guillemot Ventures SA company shares at
FRF 10 each to Yvette Guillemot and Claude, Michel, Gérard, Yves and Christian Guillemot.
The total amount of this transaction was FRF 600 (EUR 91.47).
104
B – PREVIOUS YEARS’ APPROVED AGREEMENTS
1 – Interest on current account advances made by GUILLEMOT PARTICIPATIONS SA
Terms: Current account advances made by Guillemot Participations SA are paid out at an annual
rate of 5.5%.
The total amount of interest paid out over the course of the financial year amounted to FRF
1,084,493.06 (EUR 165,329.90).
Your Board of Directors approved this agreement on May 29, 2000.
2 – Interest on current account advances made by GUILLEMOT FRANCE SA
Terms: Current account advances made by Guillemot France SA are paid out at an annual rate of
5.5%.
The total amount of interest paid out over the course of the financial year amounted to FRF
3,923,577.78 (EUR 598,145.58).
3– Lease established with Guillemot Conditionnement France SARL on December 1,
1999
Terms: the monthly rent was fixed at FRF 3,500 BT (EUR 533.57); payment of a 3-month rental
The lease was terminated as of November 30, 2000; the rental deposit of FRF 10,500 BT was
refunded.
Your Board of Directors approved this agreement on September 29, 1999.
4– Lease established with Guillemot Conditionnement France SARL on October 1, 1999
Terms: the monthly rent was fixed at FRF 27,600 BT (EUR 4,207.59); payment of a 3-month
rental deposit for FRF 82,800 (EUR 12,622.77).
refunded.
5– Lease established with Guillemot Support Technique SARL on October 1, 1999
Director involved: Claude Guillemot
refunded.
6– Lease established with Guillemot Logistique SARL on October 1, 1999
Terms: the monthly rent was fixed at FRF 32,180 BT (EUR 4,905.81); payment of a 3-month
rental deposit for FRF 96,540 BT (EUR 14,717.43).
refunded.
105
7– Lease established with Guillemot Logistique SARL on October 1, 1999
deposit for FRF 5,100 BT (EUR 777.48).
refunded.
Rent paid out over the financial year amounted to FRF 5,100 BT (EUR 777.48).
Other current operations have been undertaken under normal conditions with companies within
the Group.
Rennes, January 31, 2002
André METAYER
Roland TRAVERS
106
♦
UILLEMOT C
ORPORATION G
ROUP
♦G
GUILLEMOT
CORPORATION
GROUP
B
OARD O
FD
IRECTORS A
ND E
XECUTIVE
BOARD
OF
DIRECTORS
AND
EXECUTIVE
M
ANAGEMENT
MANAGEMENT
107
I. GUILLEMOT CORPORATION GROUP BOARD
DIRECTORS AND EXECUTIVE MANAGEMENT
OF
GROUP DIRECTORS
President
Claude GUILLEMOT
Vice-Presidents
Michel GUILLEMOT
Yves GUILLEMOT
Gérard GUILLEMOT
Christian GUILLEMOT
Claude Guillemot
President and Chief Executive Officer
Michel Guillemot
Vice-President & Strategic Business Director
Yves Guillemot
Vice-President & Sales Director
Gérard Guillemot
Vice-President & Marketing Director
Christian Guillemot
Vice-President & Administration Director
Term of office
appointment date
September 1, 1997
Term of office
renewed
on
22/12/00
November 7, 1997
Term of office
renewed
on
22/12/00
November 7, 1997
Term of office
renewed
on
22/12/00
November 7, 1997
Term of office
renewed
on
22/12/00
September 1, 1997
Term of office
renewed
on
22/12/00
Term of office anticipated expiry date
End of the AGM approving the
August 31, 2006 year-end financial
statements
statements
statements
statements
statements
108
BOARD OF DIRECTORS
Claude Guillemot
Director
Michel Guillemot
Director
Yves Guillemot
Director
Gérard Guillemot
Director
Christian Guillemot
Director
Marcel Guillemot
Director
Term of office
appointment date
September 1, 1997
Term of office
renewed
on
22/12/00
September 1, 1997
Term of office
renewed
on
22/12/00
September 1, 1997
Term of office
renewed
on
22/12/00
September 1, 1997
Term of office
renewed
on
22/12/00
September 1, 1997
Term of office
renewed
on
22/12/00
October 22, 1998
Term of office anticipated expiry date
statements
statements
statements
statements
statements
statements
109
Positions held by the directors
Claude Guillemot
Director and Chairman of the Board of GUILLEMOT CORPORATION SA. His term of
office expires at the end of the Annual General Meeting approving the August 31, 2006 year-end
financial statements.
Other responsibilities:
President and CEO, Guillemot France SA
President and CEO, Hercules Technologies SA
President and CEO, Thrustmaster SA
President, Guillemot Inc (Canada)
President, Guillemot Recherche et Développement Inc (Canada)
President, Guillemot Inc (United States)
President, Guillemot Online.com Inc (United States)
President, Hercules Technologies Inc (United States)
President, Thrustmaster Inc (United States)
Director, Guillemot Recherche et Développement SARL
Director, Guillemot Studio Graphique SARL
Director, Guillemot Support Technique SARL
Director, Guillemot GmbH (Germany)
Director, Guillemot Limited (United Kingdom)
Director, Guillemot Logistic Limited (United Kingdom)
Director, Guillemot Manufacturing Limited (United Kingdom)
Director, Guillemot B.V. (Holland)
Director, Guillemot Limited (Hong Kong)
Director, Guillemot Ventures SA
Director, Guillemot SA (Belgium)
Director, Guillemot SA (Spain)
Director and CEO, Ubi Soft Entertainment SA
Director and CEO, GameLoft SA
Director and CEO, Ludigames SA
Director, Students-Life.com SA
Michel GUILLEMOT
Director and Vice-President & Strategic Business Director of GUILLEMOT CORPORATION
SA. His term of office expires at the end of the Annual General Meeting approving the August
31, 2006 year-end financial statements.
President and CEO, Ludigames SA
Director, Guillemot Inc (United States)
Director, Guillemot Online.com Inc (United States)
Director, Hercules Technologies Inc (United States)
Director, Thrustmaster Inc (United States)
Director, Guillemot France SA
Director, Hercules Technologies SA
Director, Thrustmaster SA
Director, Guillemot Inc (Canada)
110
Yves GUILLEMOT
Director and Vice-President & Sales Director of GUILLEMOT CORPORATION SA. His term
of office expires at the end of the Annual General Meeting approving the August 31, 2006 yearend financial statements.
President and CEO, Ubi Soft Entertainment SA
Gérard GUILLEMOT
Director and Vice-President & Marketing Director of GUILLEMOT CORPORATION SA. His
term of office expires at the end of the Annual General Meeting approving the August 31, 2006
year-end financial statements.
President and CEO, GameLoft SA
CEO, Ludigames SA
111
Christian GUILLEMOT
Director and Vice-President & Administration Director of GUILLEMOT CORPORATION
SA. His term of office expires at the end of the Annual General Meeting approving the August
31, 2006 year-end financial statements.
President and CEO, Guillemot Ventures SA
President, Guillemot Logistique Inc (Canada)
Director, Guillemot Administration SARL
Director, Guillemot Conditionnement SARL
Director, Guillemot Conditionnement France SARL
Director, Guillemot Logistique SARL
Director, Guillemot Logistique France SARL
Director, Guillemot Logistik GmbH (Germany)
Director, Guillemot Logistic Limited (United Kingdom)
Director, Guillemot Manufacturing Limited (United Kingdom)
Director, Guillemot Limited (Hong Kong)
Director, Guillemot Logistics Ltd (Hong Kong)
Director and CEO, Guillemot France SA
Director and CEO, Hercules Technologies SA
Director and CEO, Thrustmaster SA
Director, Guillemot Recherche et Développement Inc (Canada)
Director, Guillemot Logistica S.L. (Spain)
Marcel GUILLEMOT
Director of GUILLEMOT CORPORATION SA. His term of office expires at the end of the
Annual General Meeting approving the August 31, 2001 year-end financial statements.
Director, GameLoft SA
Director, Ludigames SA
112
II. WORKINGS OF ADMINISTRATIVE AND MANAGEMENT
BODIES
a) Number of Board of Directors meetings
The Board of Directors met approximately fifteen times during the 2000/2001 financial year.
b) Committees established by administrative and management bodies
0
c) Director interests in the issuer’s share capital
The additional percentage of companies’ shares set out on page 13 in Guillemot
Corporation’s organizational chart (apart from the “Investments” heading) is held by the
directors. These investments are all less than 1% of share capital (except for Guillemot
Logistik GmbH, where investment amounts to 5%).
Directors hold 100% of the share capital of the sales and marketing companies established in
Japan, Denmark, Italy, the Czech Republic, Sweden, Finland and Australia, either directly or
through Guillemot Participations SA.
d) Number of options bestowed upon the issuer’s shares to members of the
administrative and management bodies
0
e) Nature and importance of operations conducted with members of the administrative
and management bodies (apart from current operations conducted under normal
conditions)
These operations are set out in the Independent Auditors’ special report on page 116.
f) Loans and guarantees accorded to or constituted in favor of members of the
administrative and management bodies
0
g) Profit-sharing and investment/interest contracts
0
113
III. REMUNERATION OF MEMBERS OF ADMINISTRATIVE
AND MANAGEMENT BODIES
The gross salaries of the management team, composed of Claude, Michel, Yves, Gérard and
Christian Guillemot, paid out by the company during the financial year ended August 31, 2001
amounted to FRF 900,000 (EUR 137,204.10).
The management team did not receive any remuneration from other Group companies during
the financial year.
No natural advantage can be said to exist.
No directors’ fees were paid.
Breakdown of remuneration to each member of the management team
Member
Gross amount (FRF)
Gross amount (EUR)
Claude Guillemot
180,000
27,440.82
Michel Guillemot
180,000
27,440.82
Yves Guillemot
180,000
27,440.82
Gérard Guillemot
180,000
27,440.82
Christian Guillemot
180,000
27,440.82
Total
900,000
137,204.10
114
♦
ALENDAR O
FE
VENTS F
OR T
HE
♦C
CALENDAR
OF
EVENTS
FOR
THE
C
URR
NT F
INANCIAL Y
EA R
CUR
RE
ENT
FINANCIAL
YEAR
115
Calendar of publication dates of company figures and accounts for the current financial
year
January 10, 2002
Publication of net sales figures for the first quarter of 2001/2002.
March 29, 2002
Publication of net sales figures for the second quarter of 2001/2002.
June 20, 2002
Publication of consolidated net income for the first semester of
2001/2002.
June 28, 2002
Publication of net sales figures for the third quarter of 2001/2002.
October 1, 2002
Publication of annual net sales figures for 2001/2002.
December 19, 2002
Publication of annual consolidated net income for 2001/2002.
116

History of the Group

Transcription

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