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FORM 20-F



UNITED STATES  SECURITIES AND EXCHANGE COMMISSION
  Washington, D.C. 20549

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|(Mark
      One) |                                                                                                                                           | 
|---------------- | ----------------------------------------------------------------------------------------------------------------------------------------- | 
|                 | REGISTRATION STATEMENT PURSUANT TO
      SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934                                      | 
|                 |                                                                                                                                           | 
|OR              
|                 |                                                                                                                                           | 
|                 | ANNUAL REPORT PURSUANT TO SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
      For the fiscal year ended March 31, 2002 | 
|                 |                                                                                                                                           | 
|OR              
|                 |                                                                                                                                           | 
|                 | For the transition period fromto
      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934     | 

Commission file number 000-28994



(incorporated with limited
    liability in England and Wales with registered number 2501949)
    (Exact name of Registrant as specified in its charter)

England and Wales
    (Jurisdiction of incorporation or organization)

Wimbledon Bridge House, 1,
    Hartfield Road, Wimbledon, London SW19 3RU, 44 208 636 3000
    (Address and telephone number of principal executive offices)

Securities registered or to
    be registered pursuant to Section 12(b) of the Act.

|Title
        of each class                                                                                                                   |  | Name
        of each exchange on which registered
|--------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------
|American
        Depositary Shares, each representing 
        one Ordinary Share of the Company, and the 
        underlying Ordinary Shares |  | Nasdaq National
        Market                   

Securities registered or to
    be registered pursuant to Section 12(g) of the Act.n/a
    (Title of Class)

Securities for which there
    is a reporting obligation pursuant to Section 15(d) of the Act.n/a
    (Title of Class)

As of March 31, 2002, there were outstanding
    4,397,443 American Depositary Shares and 139,652,515 Ordinary Shares of the
    Company (including the Ordinary Shares underlying the outstanding American
    Depositary Receipts).

---

Indicate by check mark whether the registrant
    (1) has filed all reports required to be filed by Section 13 or 15(d) of the
    Securities Exchange Act of 1934 during the preceding 12 months (or for such
    shorter period that the registrant was required to file such reports), and
    (2) has been subject to such filing requirements for the past 90 days.

Yes               No

Indicate by check mark which financial statement
    item the registrant has elected to follow.

Item 17            Item
    18

In this document, Eidos plc is referred
    to as the "Company" and the Company and its consolidated subsidiaries are
    together referred to as the "Group."

Cautionary Statement With Respect to
    Forward-Looking Statements

Statements made in this annual report with
  respect to the Group's plans, strategies and beliefs and other statements that
  are not historical facts are forward-looking statements that involve risks and
  uncertainties because they relate to events and depend on circumstances that
  will occur in the future. There are a number of factors that could cause actual
  results and developments to differ materially from those expressed or implied
  by these forward-looking statements, including without limitation, general economic
  conditions in the Group's markets, particularly levels of consumer spending;
  exchange rates, particularly between the pound sterling and the U.S. dollar,
  in which the Group makes significant sales; and the Group's ability to continue
  to win acceptance of its products, which are offered in highly competitive markets
  characterized by continual new product introductions, rapid developments in
  technology and subjective and changing consumer preferences (particularly in
  the entertainment business); and those factors identified under "Item 3 –
  Key Information – Risk Factors."





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TABLE
  OF CONTENTS

|               |               | Page                                                            
|-------------- | ------------- | ----------------------------------------------------------------
|Part
      I   | Item
      3  | Key Information                                                 
|               |               |                                                                 
|               | Item 4        | Information on the Group                                        
|               |               |                                                                 
|               | Item 5        | Operating and Financial
      Review and Prospects              
|               |               |                                                                 
|               | Item 6        | Directors,
      Senior Management and Employees                
|               |               |                                                                 
|               | Item 7        | Major Shareholders and
      Related Party Transactions         
|               |               |                                                                 
|               | Item 8        | Financial Information                                           
|               |               |                                                                 
|               | Item 9        | The Offer and Listing                                           
|               |               |                                                                 
|               | Item 10       | Additional Information                                          
|               |               |                                                                 
|               | Item 11       | Quantitative and Qualitative
      Disclosures about Market Risk
|               |               |                                                                 
|Part II        | Item 15       | Controls and Procedures                                         
|               |               |                                                                 
|Part
      III | Item 18       | Financial Statements                                            
|               |               |                                                                 
|               | Item
      19 | Exhibits                                                        

|                                          
|------------------------------------------
|                                          
|Note: Omitted items are
      inapplicable

Please Note: Eidos plc changed
  its year end to June 30 during the year. In the United Kingdom it will file
  15 month accounts for the period ended June 30, 2002.

A transitional report on Form 20-F
  for the three months to June 30, 2002 will also be filed in the United States
  of America by September 30, 2002.

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PART I

ITEM 3 – KEY INFORMATION

General

Eidos is one of Europe's largest developers
    and publishers of entertainment software. The Group's primary focus is on
    the development of its own content through its internal development resources,
    augmented by relationships with external development studios. The Group has
    a broad based publishing portfolio built around key franchises such as Tomb
    Raider, Championship Manager, Soul Reaver and Commandos, and original titles
    which it believes have franchise potential. Tomb Raider is one of the most
    successful video game franchises in the world owned by an independent publisher
    with total sales currently exceeding 28 million units.

Selected Financial Data

The following selected consolidated financial
    data should be read in conjunction with "Item 5, Operating and Financial
    Review and Prospects" and the Consolidated Financial Statements and Other
    Financial Information included in Item 8. The Group prepares its financial
    statements in accordance with U.K. GAAP, which differs in certain material
    respects from U.S. GAAP. These differences have a material effect on net income
    and shareholders' equity and are described in Note 32 of the Notes to the
    Consolidated Financial Statements of the Company.

The selected consolidated financial data
    presented below for the Company in accordance with U.K. GAAP for the years
    ended March 31, 2000, 2001 and 2002 and at March 31, 2001 and 2002 are derived
    from the audited Consolidated Financial Statements included elsewhere in this
    report. The selected consolidated financial data presented below for the Company
    in accordance with U.K. GAAP for the years ended March 31, 1998 and 1999 and
    at March 31, 1998, 1999 and 2000 are derived from audited financial statements
    of the Company not included in this report.

The selected consolidated financial data
    presented below for the Company in accordance with U.S. GAAP for the years
    ended March 31, 1998, 1999, 2000, 2001 and 2002 and at March 31, 1998, 1999,
    2000, 2001 and 2002 are derived from the Company's audited financial statements,
    but are unaudited except for the amounts covered by the reconciliation set
    forth in Note 32 of the Notes to the Consolidated Financial Statements of
    the Company.



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U.K. GAAP

Consolidated Statement of Operations Data:

|                                                                                             | Year
      ended March 31, |         
|-------------------------------------------------------------------------------------------- | -------------------------- | --------
|In
          thousands, except per share data                                                | 1998                       |         
|                                                                                             |                            |         
|                                                                                             | £'000                      |         
|Turnover(4)                                                                                  |                            | £137,234
|Cost
          of sales                                                                      |                            | 47,263  
|                                                                                             |                            |         
|Gross
          profit                                                                       |                            | 89,971  
|Operating
          expenses:                                                                |                            |         
|Selling
        and marketing(3)(4)                                                          |                            | 23,141  
|Research
        and development(3)                                                          |                            | 28,744  
|General
        and administrative(3)                                                        |                            | 18,633  
|                                                                                             |                            |         
|Income/(loss)
          from operations                                                      |                            | 19,453  
|Income
          from joint ventures                                                         |                            | —       
|Joint
          venture goodwill amortization                                                |                            |         
|Income/(loss)
          from sale of investments                                             |                            | (1,577  
|Loss
          from termination of operations                                                |                            | (275    
|Income
          from investments                                                            |                            | —       
|Interest
          income/(expense), net                                                     |                            | (1,094  
|                                                                                             |                            |         
|Profit/(loss)
          before income taxes                                                  |                            | 16,507  
|Provision
          for income taxes                                                         |                            | (5,642  
|                                                                                             |                            |         
|Net
          profit/(loss)                                                                  |                            | £10,865 
|                                                                                             |                            |         
|Earnings/(loss)
          per share(2)                                                       |                            | 11.5p   
|Diluted
          earnings/(loss) per share(2)                                               |                            | 11.0p   
|                                                                                             |                            |         
|Weighted
          average number of shares used to compute net earnings/(loss) per share(2) |                            | 94,182  
|                                                                                             |                            |         

Consolidated Balance Sheet Data:

|                                | March
        31, |         | March
        31, |  | March
        31, |  | March
        31, |         | March
        31, | 
|------------------------------- | ----------------- | ------- | ----------------- |  | ----------------- |  | ----------------- | ------- | ----------------- | 
|                                |                   |         |                   |  |                   |  |                   |         |                   | 
|In
          thousands          | 1998              |         | 1999              |  | 2000              |  | 2001              |         | 2002              | 
|                                |                   |         |                   |  |                   |  |                   |         |                   | 
|                                | £'000             |         | £'000             |  | £'000             |  | £'000             |         | £'000             | 
|Working
          capital(1)    |                   | £52,074 |                   |  | £53,574           |  |                   | £54,424 |                   | 
|Goodwill                        |                   | —       |                   |  | 25,939            |  |                   | 28,305  |                   | 
|Total
          assets          |                   | 96,717  |                   |  | 155,394           |  |                   | 268,648 |                   | 
|Long-term
          liabilities |                   | 29,454  |                   |  | 30,813            |  |                   | 2,253   |                   | 
|Shareholders'
          equity  |                   | 40,936  |                   |  | 66,532            |  |                   | 126,419 |                   | 

---

|(1) | Working Capital includes stock, debtors
        and cash at bank less creditors falling due less than one year.
|--- | ---------------------------------------------------------------------------------------------------------------
|   

|(2) | In accordance with FRS14, all earnings
        per share figures have been restated for the Rights Issue that occurred
        during the year to March 31, 2002.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

|(3) | The figures for research and development,
        selling and marketing and general and administrative expenses for the
        periods ended March 31, 1998, 1999, 2000 and 2001 have been reclassified
        for a change in the classification of certain expenses that occurred in
        those periods. (see table below for effects of the changes)
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

|(4) | Certain co-operative advertising expenses
      that were previously charged against Turnover have now been reclassified
      as an expense within selling and marketing costs and the 2001 comparatives
      have been reclassified to reflect this. (see table below for the effects
      of the changes)
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

Effects of reclassifications

|                                     | March
        31, |        | March
        31, |  | March
        31, |   | March
        31, |        | March
        31, | 
|------------------------------------ | ----------------- | ------ | ----------------- |  | ----------------- | - | ----------------- | ------ | ----------------- | 
|                                     |                   |        |                   |  |                   |   |                   |        |                   | 
|                                     | 1998              |        | 1999              |  | 2000              |   | 2001              |        | 2002              | 
|                                     |                   |        |                   |  |                   |   |                   |        |                   | 
|In
          thousands               | £'000             |        | £'000             |  | £'000             |   | £'000             |        | £'000             | 
|Turnover                             |                   | —      |                   |  | —                 |   |                   | —      |                   | 
|Selling
          and marketing      |                   | (556   | )                 |  | (739              | ) |                   | (1,073 | )                 | 
|Research
          and development   |                   | (1,154 | )                 |  | (1,198            | ) |                   | (903   | )                 | 
|General
          and administrative |                   | 1,710  |                   |  | 1,937             |   |                   | 1,976  |                   | 





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U.S. GAAP

Consolidated Statement of Operations Data:

|                                                                                             | Year
      ended March 31, |         
|-------------------------------------------------------------------------------------------- | -------------------------- | --------
|In
          thousands, except per share data                                                | 1998                       |         
|                                                                                             |                            |         
|                                                                                             | £'000                      |         
|Turnover(4)                                                                                  |                            | £137,234
|Cost
          of sales                                                                      |                            | 47,263  
|                                                                                             |                            |         
|Gross
          profit                                                                       |                            | 89,971  
|Operating
          expenses:                                                                |                            |         
|Selling
        and marketing(3)(4)                                                          |                            | 23,142  
|Research
        and development(3)                                                          |                            | 38,986  
|General
        and administrative(3)                                                        |                            | 26,693  
|                                                                                             |                            |         
|Income/(loss)
          from operations                                                      |                            | 1,150   
|Income/(loss)
          from sale of investments or termination of operations                |                            | (52     
|Losses
          from interests in associates                                                |                            | 118     
|Income
          from investments                                                            |                            | —       
|Interest
          expense, net                                                              |                            | (1,094  
|                                                                                             |                            |         
|Income
          /(loss) before incomes taxes and minority interests                         |                            | 122     
|Provision
          for income taxes                                                         |                            | (5,642  
|Minority
          interests                                                                 |                            | —       
|                                                                                             |                            |         
|Net
          income/(loss)                                                                  |                            | £(5,520 
|                                                                                             |                            |         
|Earnings/(loss)
          per share(2)                                                       |                            | (5.8p   
|Diluted
          earnings/(loss) per share(2)                                               |                            | (5.8p   
|                                                                                             |                            |         
|Weighted
          average number of shares used to compute net earnings/(loss) per share(2) |                            | 94,182  
|                                                                                             |                            |         

Consolidated Balance Sheet Data:

|                                | March
        31, |         | March
        31, |  | March
        31, |  | March
        31, |         | March
        31, | 
|------------------------------- | ----------------- | ------- | ----------------- |  | ----------------- |  | ----------------- | ------- | ----------------- | 
|                                |                   |         |                   |  |                   |  |                   |         |                   | 
|In
          thousands          | 1998              |         | 1999              |  | 2000              |  | 2001              |         | 2002              | 
|                                |                   |         |                   |  |                   |  |                   |         |                   | 
|                                | £'000             |         | £'000             |  | £'000             |  | £'000             |         | £'000             | 
|Working
          capital(1)    |                   | £54,077 |                   |  | £55,567           |  |                   | £39,122 |                   | 
|Goodwill                        |                   | 7,217   |                   |  | 26,733            |  |                   | 28,773  |                   | 
|Total
          assets          |                   | 105,937 |                   |  | 157,316           |  |                   | 312,655 |                   | 
|Long-term
          liabilities |                   | 29,454  |                   |  | 30,813            |  |                   | 2,253   |                   | 
|Shareholders'
          equity  |                   | 50,156  |                   |  | 68,454            |  |                   | 154,489 |                   | 

---

|(1) | Working Capital includes stock, debtors
        and cash at bank less creditors falling due less than one year.
|--- | ---------------------------------------------------------------------------------------------------------------
|   

|(2) | In accordance with SFAS No. 128, all
      earnings per share figures have been retrospectively adjusted for the Rights
      Issue that occurred during the year.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

|(3) | The figures for research and development,
      selling and marketing and general and administrative expenses for the periods
      ended March 31, 1998, 1999, 2000 and 2001 have been reclassified for a change
      in the classification of certain expenses that occurred in those periods.
      (see table under the UK GAAP results for the effects of the changes)
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(4) | Certain co-operative advertising expenses
        that were previously charged against Turnover have now been reclassified
        as an expense within Sales and marketing costs and the 2001 comparatives
        have been adjusted to reflect this. (see table under the UK GAAP results
        for the effects of the changes)                                        
|   



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Exchange Rates

The following table sets forth certain information
    with respect to the Noon Buying Rate for pounds sterling expressed in U.S.
    dollars per pound sterling. These translations should not be construed as
    a representation that the pound sterling amounts actually represent such U.S.
    dollar amounts or could be converted into U.S. dollars at such rate. Such
    rates are not used by the Company in the preparation of its Consolidated Financial
    Statements included elsewhere herein. See Note 2 of the Notes to the Consolidated
    Financial Statements of the Company.

Fiscal Year Ended March 31,

|     | Average(1) |     
|---- | ---------- | ----
|1998 |            | 1.65
|1999 |            | 1.65
|2000 |            | 1.61
|2001 |            | 1.47
|2002 |            | 1.43

---

|(1) | Represents the average of the Noon
        Buying Rates on the last day of each month during the relevant period.
|--- | -----------------------------------------------------------------------------------------------------------------
|   

Monthly exchange rates for the previous
    six months

|                      | High |       | Low | 
|--------------------- | ---- | ----- | --- | 
|                      |      |       |     | 
|March
          2002  |      | $1.43 |     | 
|April
          2002  |      | $1.46 |     | 
|May
          2002    |      | $1.47 |     | 
|June
          2002   |      | $1.53 |     | 
|July
          2002   |      | $1.58 |     | 
|August
          2002 |      | $1.57 |     | 

On August 30, 2002 the Noon Buying Rate was
  $1.55 for each £1.00.

Risk Factors

In addition to the other information contained
    and incorporated by reference in this Report, the following risk factors should
    be considered carefully in evaluating the Group and its business. Also see
    "Cautionary Statement with Respect to Forward-Looking Statements" at the
    beginning of this report.

Changing product platforms and formats
    may lead to consumer uncertainty and reduced demand

The entertainment software market has evolved
  rapidly in recent years, primarily as a result of significant ongoing technological
  development. This is particularly true of the market for proprietary video game
  hardware and software, which has historically operated on a four to six year
  cycle, and which has recently undergone a major transition with the introduction
  of next generation consoles such as the Sony PlayStation 2, Microsoft's Xbox
  and Nintendo's GameCube. The introduction of new technologies and new hardware
  platforms can create instability in the market for entertainment software as
  a result of consumer uncertainty and fluctuations in demand for software for
  both old and new hardware systems. This in turn may lead to a deterioration
  in competitiveness and consequential losses.

As more technological advances are made,
    the Group will have to plan its development activities to ensure that it has
    what it believes to be an appropriate mix of software available to publish
    as further new hardware platforms or technologies come to market. In order
    to do this the Group must predict certain key factors over which it exercises
    little or no control, such as the timing of the launch of new consoles and
    technologies, the pricing models which the new hardware and



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software markets will sustain and the levels of market share and penetration
  which may be achieved. If these projections prove to be inaccurate, the Group
  might not realize the full potential of its product development program and
  may fail to recoup its investment in new product development.

The predicted levels of market growth
    associated with the successful introduction of new hardware platforms may
    not be achieved

All of the current range of next generation
    consoles have now been launched in all of the major commercial markets in
    which the Group operates. Many commentators continue to forecast a period
    of significant growth for the industry as these new hardware platforms achieve
    mass-market penetration. There remains however some uncertainty as to what
    degree these platforms will achieve the forecast levels of sales penetration
    either collectively or individually. The Group has invested considerable sums
    in developing games for these new platforms and the financial performance
    of the Group may be adversely affected if these platforms do not achieve the
    degrees of market acceptance that the Group has forecast. In addition, the
    Group has also entered into arrangements with The Sony Computer Entertainment
    Company under which certain titles based on the Group's Tomb Raider franchise,
    will be exclusive to PlayStation 2 on the videogame console format. There
    is no guarantee that this hardware platform will achieve the sales penetration
    that the Group has forecast and consequently the Group's ability to meet its
    revenue and profitability forecasts for this title and as a whole, may be
    adversely affected.

New product releases may fail to achieve
    market acceptance

A key aspect of the Group's strategy is
    to focus on a relatively small number of high quality entertainment software
    products based around a number of existing internally generated franchise
    properties and the development of new properties with franchise potential.
    Due to this dependence on a limited number of products, the Group may be adversely
    affected if one or more principal entertainment software products fail to
    achieve anticipated results. Furthermore, whilst the focus on franchise properties,
    if successful, results in extending product life cycles, there can be no assurance
    that the Group's existing franchise titles can continue to be exploited as
    successfully as in the past. In addition, new products that the Group believes
    will have potential value as franchise properties may not achieve market acceptance
    and therefore may not be a basis for future releases.

The Group's success depends on the timely
    introduction of new products and new iterations of franchise titles of sufficiently
    high quality to replace declining revenues from older products. Notwithstanding
    the Group's strategy of focusing on franchise and high quality original titles
    with future franchise potential, few entertainment software products achieve
    sustained market acceptance and there can be no assurance that new products
    will be introduced on schedule or that they will achieve widespread market
    acceptance or generate significant revenues. Due to the highly seasonal nature
    of the entertainment software market and the substantial revenues that can
    be generated in the initial months after a new title launch, it is important
    to choose and achieve an appropriate launch date. A poorly timed launch could
    jeopardize the potential success of a title and thus the results of the Group.

If the Group is unable to develop and publish
    titles that are capable of achieving market acceptance then it may continue
    to report operating losses and it's prospects for future growth may be limited.

Product release dates are frequently
    difficult to predict

The Group's success depends on the timely
    introduction of new products to replace declining revenues from older products.
    The bulk of revenues generated from entertainment software products are generally
    realized in the first few months following release. Consequently because of
    the boost to revenues typically associated with the initial shipments of a
    new product, delaying



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a product introduction beyond the end of a financial reporting period may materially adversely  affect operating results for that period.

The process of developing entertainment software products such as those offered by the Group is complex and is  becoming more so as new hardware platforms and technologies are introduced. In the past, the Group has experienced  significant delays in the introduction of certain new products. Whilst every effort has been made by the Group to  minimize delays in intended release dates and progress achieved, there remains a risk that such delays will occur again in  the future and that this might have an adverse impact on the Group's financial results.

Financial forecasting is difficult

There is a high degree of inherent uncertainty in certain key factors in the forecasting process. These include but are not  limited to, the degree to which consumers will accept both new hardware platforms and the Group's own new software  releases, the timing of new software releases and the general economic conditions in the major markets in which the  Group operates. As a consequence financial forecasting is difficult and there is a risk that the Group may fail to meet its  financial forecasts for any given reporting period. There is also a risk that the Group may fail to accurately estimate its  working capital requirements.

The Group's business is highly seasonal

The market for entertainment software is highly
  seasonal and historically the Group has earned a significant proportion of its
  annual revenues and profits in the quarter to December 31. Due to the seasonal
  nature of the demand for entertainment software any slippage in new product
  release dates may mean that titles fail to reach their revenue and profitability
  forecasts and that the Group's reported results as a whole, may be adversely
  affected. The Group recently announced that it was changing it's year end to
  June 30 and that in future, it would no longer report it's quarterly results,
  only those at the half year and the year-end. Failure to meet new product release
  dates may also mean that the Group falls short of analyst's expectations for
  these reporting periods.

The seasonal nature of the entertainment software industry and the Group's release schedule, together with the terms on  which the Group carries on its business, gives rise at certain times to a pronounced working capital requirement. If the  Group does not have access to sufficient working capital during such periods, it may not be able to take full advantage of  the commercial opportunities available to it.

The Group operates in a highly competitive market

The entertainment software market is highly competitive and is characterized by rapidly changing technology, evolving  industry standards and frequent new product introductions. Accordingly, the Group is always at risk from competitors  achieving product selection, price, shelf access, marketing support, distribution or other selling advantages. There is a  possibility that market forces, over which the Group has little or no control, may result in an unanticipated fall in the retail  price of entertainment software. This could materially adversely affect the Group's projected profit margins.

Unexpected levels of returns may be experienced

The Group accepts returns and provides markdowns or other credits in the event that a retailer holds excess inventory of  the Group's entertainment software products. When entertainment software is dispatched into the retail channel, the  Group establishes reserves, which estimate future potential returns, based on historical return rates, seasonality of sales,  retailer and distributor inventories and other factors. Although the Group believes that it maintains adequate reserves, there can be no  assurance that actual returns or price reductions will not exceed such reserves, particularly where entertainment software  products fail to achieve widespread market acceptance.





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The unauthorized copying and piracy of software is becoming more commonplace

The entertainment software industry suffers increasingly from the effects of unauthorized copying and piracy. Whilst the  Group takes such measures as it believes are appropriate to protect its entertainment software products, it cannot be  certain that these measures will be sufficient, and this may result in a loss of revenue.

Complex entertainment software products may contain undetected errors

Entertainment software products as complex as those offered by the Group may contain undetected errors when first  introduced or when new versions are released. The Group has in the past discovered errors in certain of its product  offerings after their introduction and has experienced delays or lost revenues during the period required to correct those  errors. In particular, the PC hardware environment is characterized by a wide variety of non-standard peripherals (such as  sound cards and graphics cards) and configurations that make pre-release testing for programming or compatibility  errors very difficult. The Group has experienced delays and significant technical support expenses in the past. There can  be no assurance that, despite testing by the Group, programming or compatibility errors will not be found in new  products or releases after commencement of commercial shipments. Any such errors could result in the loss of, or delay  in, achieving market acceptance, which could have a material adverse effect on the Group's business, results of  operations and financial condition.

The effect of on-line gaming on the entertainment software business is difficult to predict

The Group has adopted a cautious approach to on-line gaming. It does not currently derive any material revenue streams  from on-line gaming and it has taken a selective approach to investing in the development of the software and  infrastructure required to support on-line gaming. The Group believes that the market for on-line gaming is not  sufficiently mature or predictable enough to warrant more significant levels of investment at this time. It is not clear what  effect any increase in the demand for on-line gaming will have on the demand for the conventionally packaged software  that the Group currently sells through its existing retail channels.

The Group is dependent upon the protection of its intellectual property and proprietary rights, and could become subject  to costly and time-consuming intellectual property litigation

The Group relies primarily on a combination of patent, copyright, trademark and trade secret laws, employee and third  party non-disclosure and non-competition agreements and other methods to protect its proprietary rights. Although the  Group is not currently the subject of any intellectual property litigation which would have a material effect on the Group,  there has been substantial litigation regarding copyright, trademark and other intellectual property rights involving  computer software companies.

There can be no assurance that third parties will not assert infringement claims in the future with respect to current or  future products of the Group. Any claims or litigation, with or without merit, could be costly and could require a  significant amount of management's attention and result in adverse determinations, each of which could have a material  adverse effect on the Group's business, results of operations and financial condition. Policing unauthorized use of the  Group's products and trademarks is difficult and, while the Group is unable to determine the extent to which infringement  of its proprietary products and marks occurs, software piracy and trademark infringement can be expected to be  persistent problems.

The Group relies on hardware manufacturers that are also the Group's competitors

The Group publishes products subject to master license agreements with console manufacturers including Sony,  Nintendo and Microsoft. Pursuant to these agreements the Group is permitted to use the proprietary information of the  manufacturers in connection with the development of products for their platforms.





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Although the Group has successfully negotiated agreements for the publication of its products in the past, there can be no  assurance that it will be able to obtain publishing rights for all of its products in the future.

Prior to release for manufacturing, the hardware
  manufacturer has the right to review, evaluate and approve, under standards
  established by it, each title for its proprietary platform and the right to
  inspect and evaluate all promotional materials in connection with such title.
  The inability of the Group to obtain timely approvals or the rejection by the
  hardware manufacturer of titles or related promotional materials could materially
  adversely affect its future results of operations or result in variations in
  operating results if a product scheduled for release in any quarter is delayed.

Changes in international regulatory regimes may restrict the Group's operations

Recent developments in the U.S. and elsewhere have led the authorities to consider introducing tighter legislation against  so-called ''violent videos''. Any such regulations could have an impact on the Group, in common with other publishers of  video games, which is difficult to measure accurately.

The Group is heavily reliant on key personnel

The continued success of the Group depends, to a significant extent, upon the performance and contribution of its senior  management, together with its ability to continue to attract, motivate and retain highly qualified and creative employees.  The loss of key management and employees, or the failure by the Group to attract additional qualified employees or to  retain the services of key personnel, could materially adversely affect the Group's business, results of operations or  financial condition.

The results of the Group's international operations are subject to currency fluctuations

Currently, the Group's products and services are marketed in over 35 countries, covering primarily Europe and the U.S.  Sales of the Group's products in such markets are subject to risks inherent in international business activities, including  general economic conditions in each country, overlap of differing tax structures, management of an organization spread  over various jurisdictions, unexpected changes in regulatory requirements, compliance with a variety of foreign laws and  regulations and varying accounts receivable cycles.

The Company publishes its consolidated financial statements in pounds sterling. A significant portion of the Group's  assets and net revenues are generated in foreign currencies, primarily Euros and U.S. dollars. In translating the results of  its overseas operations the Group is subject to fluctuations in the exchange rates between pound sterling and the  overseas currency. Accordingly, depreciation in the weighted average value of the overseas currency against pound  sterling could decrease reported revenues and appreciation in the weighted average value of the overseas currency  against pound sterling could increase reported revenues. As a result of the foregoing, results of operations can be  expected to fluctuate significantly from period to period.

World events

Events such as the terrorist attacks of September 11, 2001 may trigger un-foreseen economic conditions and cause the  demand for computer entertainment software to fluctuate in an un-predictable manner.



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ITEM 4 – INFORMATION ON THE GROUP

History and development of the Group

The legal and commercial name of the Company, which was incorporated on May 14, 1990 under the laws of England and  Wales, is Eidos plc. The Company's Ordinary Shares are traded on the London Stock Exchange and American Depositary  Shares (each representing one ordinary share) are traded on the Nasdaq National Market.

The Company's registered office is located
  at Wimbledon Bridge House, 1 Hartfield Road, Wimbledon, London SW19 3RU, United
  Kingdom and its main telephone number + (0) 44 208 636 3000.

The Group develops and publishes advanced
  entertainment software products. The Group was formed in May 1990 to develop
  video editing systems and subsequently expanded its activities to include developing
  proprietary, software- based video compression technology to be used in CD-ROM
  and video telephony applications. Sales of video compression products were not
  significant, and the Company broadened its strategic focus to include developing
  and publishing entertainment software. To implement this strategy, the Group
  effected a number of acquisitions which resulted in a substantial expansion
  of the Group's operations. In October 1995, the Group acquired three entertainment
  software companies (Domark Group Limited, Simis Limited and The Big Red Software
  Company Limited) for aggregate consideration, including costs, of £13.8
  million. In April 1996, the Group acquired CentreGold plc, an entertainment
  software company, for consideration, including costs, of £17.6 million.
  The consideration for each of these acquisitions consisted primarily of newly
  issued Eidos shares. As contemplated at the time of the CentreGold acquisition,
  in June 1996 the Company disposed of CentreSoft Limited and PDQ Limited, the
  distribution arms of CentreGold, for £7.5 million in cash, the net book
  value of such companies at the date of acquisition by the Group. Subsequently
  CentreSoft Limited was acquired by Activision, Inc. resulting in an additional
  £0.5 million deferred consideration recognized in fiscal 1999.

In November 1998 the Group acquired Crystal Dynamics, Inc. for $49.1 million including costs. During the year ended  March 31, 2000, the Group acquired 75% and 25% holdings in Proein SL and Pyro Studios SL, respectively. During the  same year the Group licensed certain of its video compression technologies to Forbidden Technologies plc, a company  formed by one of the Group's original founders. The Group divested itself of its remaining non core activities during the  year ended March 31, 2001 to concentrate on developing and publishing high quality entertainment software.

The Group's future success is dependant upon its ability to develop and publish new entertainment software titles that  are capable of achieving widespread market acceptance and driving sustainable growth in revenues and operating  profits. The Group currently derives a significant proportion of its revenues from the market for videogames. This market  has been through a period of transition during the past 18 months as consumers waited for the next generation of  videogame consoles to be released into the market. In common with many other publishers of entertainment software  the Group experienced fluctuating and un-predictable levels of demand for its titles during this period, which contributed  significantly to it's poor operating results during the years ended March 31, 2000 and 2001.

In July 2001 the Group successfully completed a 1 for 3 Rights Issue raising £51.6 million, net of costs. All of the next  generation of videogame consoles had been launched by March 31, 2002.

Acquisitions, investments and disposals in the last three fiscal years

Express.com, Inc.

On November 11, 1999, the Group acquired 19.96% of Maximum Holdings, Inc. an internet company for $55 million.  Following the acquisition, Maximum Holdings, Inc. merged with another internet company, DVD Express, Inc. and  changed its name to Express.com, Inc. This



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diluted the Group's holding to 12.6%. Express.com experienced significant financial difficulties  during the year ended March 31, 2001, and on March 7, 2001, Express.com filed for federal  bankruptcy protection under Chapter 11 of the U.S. bankruptcy code. The investment of $55  million was written off in the year ended March 31, 2001.

Vision Park Entertainment AB

The Group had a 39.54% investment in Innerloop Technologies AS, an entertainment software developer. On September  1, 2000, the whole of the share capital of Innerloop Technologies AS was acquired by Vision Park Entertainment AG  (publ.), conditional upon the subsequent listing of Vision Park Entertainment AB (publ.) in Sweden. As part of the  acquisition, the Group's 39.54% holding was converted at the ratio of 1 to 12 into 585,198 Vision Park shares. Vision Park  Entertainment AB (publ.) subsequently listed its share on OM Stockholmborsens O-lista in November 2000.

Within the Group accounts, this investment was carried at nil. In November 2000, the Group sold 206,000 shares in Vision  Park Entertainment AB (publ.) for £519,000. The Group sold it's remaining shares in October 2001 for £122,900.

Opticom

In 1998, the Group made a series of investments
  in Opticom for a total of £11.2 million. Opticom is a Norwegian based
  company listed on the Norwegian stock exchange and is a leader in the research
  and development of polymer based storage and processing devices and has significant
  interests in internet technologies. In March 2000, the Group sold the majority
  of its holding in Opticom for £91.5 million, excluding costs. The Group
  sold its remaining stake in the company in a series of open-market transactions
  during November and December 2001, for net proceeds of £11.0 million.

Proein SL

In July 1999, the Group acquired 75% of Proein SL, a Spanish distributor and an effective holding of 25% in the related  games developer, Pyro Studios SL for $28 million. Both acquisitions are being accounted for as joint ventures because of  the joint control arrangements, and are being proportionally consolidated.

Ion Storm Inc

In June 2001, the Group took its holding in Ion Storm LP to 89.6% of the issued partnership units for a nominal sum. The  89.6% holding has been built up over a series of step acquisitions for which the fair value of the total consideration was  $536.

Business Overview

The Group is one of Europe's largest independent developers and publishers of entertainment software. The Group's  publishing activities date from 1995 when it acquired the Domark Group Ltd with the Championship Manager franchise.  The following year it acquired the CentreGold Group plc, which included Core Design Limited, the developer of the Tomb  Raider franchise.

Tomb Raider is one of the most successful entertainment software franchises in the world owned by an independent  publisher. With five iterations to date, total unit sales currently exceed 28 million. In addition to Tomb Raider, the Group  has developed a broadly based publishing portfolio which includes a number of other franchise titles such as  Championship Manager, Soul Reaver, Commandos, Deus Ex, TimeSplitters and Hitman.

The Group's market share amongst all independent publishers in the calendar year 2001, based on independent data  supplied by ChartTrack in the U.K., GfK in France and Media Control in Germany, was 6 per cent. in the U.K., 7 per cent. in  Germany and 5 per cent. in France. This gave the Group the No.3 position in the U.K., the No.4 position in Germany and  the No.5 position in France. In the U.S., based on independent data provided by NPD, the Group's market penetration



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in the calendar year 2001 was 1.1 per cent., giving it a No.20 position; in relation to PlayStation  and PlayStation 2 sales, the market penetration was 2.5 per cent. giving it a No.10 position.

The Group's core activity of publishing entertainment software has become increasingly orientated towards the creation  and development of its own content. Historically, the particular publishing strengths of the Group have been in the action  adventure, strategy and sports management genres and the Directors expect this will continue to be the case in the short  to medium-term based on the titles currently in development. In the past the Group has taken a selective approach to  sports action titles and the Directors also expect this to continue.

The Directors have promoted a ''developer friendly'' culture within the business and currently the Group has over 300  development staff working within 13 teams in 4 studios, which are wholly-owned or partly-owned. This resource is  augmented by an external development programme. Of total sales of £120.3 million in the year ended March 31, 2002, 60  per cent. was derived from internally-generated product.

The Group has focused on becoming a pure development and publishing house. Unlike a number of other independent  entertainment software publishers, the Group does not seek to own its channel to market since the Directors consider this  to be a low margin activity. The Group maintains close contact with the retail channel. In Europe the Group has direct  relationships with over 500 retailers operating approximately 17,000 outlets in three countries and in the U.S. with 50  retailers and distributors with approximately 10,600 outlets. Distribution to the retail channel is primarily undertaken  through fulfillment houses.

The Group sells its products mainly in the
  United States and Europe. See Item 8, Note 3 for a full breakdown of revenues
  and profits by activity and geographic market for the last 3 fiscal years. The
  Group's sales are highly seasonal with most of the revenue being earned in the
  quarter ended December 31, due to an increase in sales in the lead-up to year
  end holiday buying season. See ''Item 3 – Risk Factors – The Group's
  Business is Highly Seasonal''.

The Group markets its products by targeting the retail and end-user customers through a marketing strategy, which  includes retail promotions, public relations campaigns, consumer advertising, web-based marketing and direct  marketing.

Retail promotions include sending product information to major industry buyers and selected retail store managers. The  mailings include game descriptions, preliminary pricing information, ordering information, product merchandise and  available press coverage. The Group also carries out ''co-operative'' marketing campaigns with major retailers to improve  store presence and participate in the retailer's own advertising. Public relations campaigns include personal visits to  magazine publishers, trade show appearances, and weekly and monthly mailings to the video game press, on-line  publications, lifestyle and sports press, national dailies and broadcast media. Consumer Advertising generally begins two  to three months prior to launch of a product. The advertising may include: print, television, radio, outdoor, on-line  advertising, cinema advertising, direct mail, co-marketing ventures and creative packaging. In-store promotions may  include videos, window displays, product signage and/or product demonstrations. Current Web exposure is focused on  bringing the Group closer to its customers by the provision of technical support on its web-site and by providing demos  and samples to stimulate interest in products. In relation to direct marketing, the Group holds a considerable database of  customers built from the return of warranty cards. The database is used for profiling exercises and segmented direct  marketing campaigns. Campaigns are extended via physical mailings and, wherever possible, electronic mailing. The  Group also participates in direct marketing activities using databases built by retailers' loyalty schemes.



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Organizational Structure

The Company is the holding company of the Group. The Company has the following principal subsidiaries and joint  ventures:

|Name                                          | Date of
      incorporation |  | % of share
      capital held
      as at August 31,
      2002 |        | Nature of Business                                      | 
|--------------------------------------------- | --------------------------- |  | --------------------------------------------------------------- | ------ | ------------------------------------------------------- | 
|                                              |                             |  |                                                                 |        |                                                         | 
|Principal
        Subsidiaries of the Company |                             |  |                                                                 |        |                                                         | 
|Eidos
        Interactive Limited             | 03/24/84                    |  | 100                                                             |        | Developer and
      publisher of entertainment software | 
|Core
        Design Limited                   | 05/13/88                    |  | 100                                                             | (1)    | Developer of
      entertainment software               | 
|Eidos
        Interactive, Inc.               | 08/15/92                    |  | 100                                                             | (1)    | Developer and
      publisher of entertainment software | 
|Crystal
        Dynamics, Inc.                | 07/08/92                    |  | 100                                                             | (1)    | Developer of
      entertainment software               | 
|Eidos
        Interactive France SARL         | 12/10/85                    |  | 100                                                             | (1)    | Publisher of
      entertainment software               | 
|Eidos
        Interactive (Deutschland) GmbH  | 02/08/96                    |  | 100                                                             | (1)    | Publisher of
      entertainment software               | 
|Eidos
        Interactive KK                  | 07/30/98                    |  | 100                                                             |        | Publisher of
      entertainment software               | 
|Eidos
        Interactive Pte Limited         | 11/17/98                    |  | 100                                                             |        | Publisher of
      entertainment software               | 
|Ion
        Storm LLP                         | 12/3/96                     |  | 89                                                              | (1)(2) | Developer of
      entertainment software               | 
|                                              |                             |  |                                                                 |        |                                                         | 
|Joint
        Ventures                        |                             |  |                                                                 |        |                                                         | 
|Proein
        SL                             | 08/12/76                    |  | 75                                                              | (1)    | Publisher of
      entertainment software               | 
|Pyro
        Studios SL                       | 03/11/97                    |  | 25                                                              | (1)    | Developer of
      entertainment software               | 

With the exception of the companies marked(1), the share capital of the above companies is held directly by the Company.  In the case of Ion Storm(2), the holding is in the form of partnership units rather than Ordinary Shares.

The registered office of Eidos Interactive Limited is Wimbledon Bridge House, 1 Hartfield Road, Wimbledon, London  SW19 3RU, United Kingdom. The registered office of Core Design Limited is 2 Roundhouse Road, Pride Park, Derby DE24  8JE, United Kingdom. The registered office of Eidos Interactive, Inc. is 651 Brannan Street, 4th Floor, San Francisco,  California 94107, United States of America. The registered office of Crystal Dynamics is 2468 Embarcadero Way, Palo Alto,  California 94025-3691, United States of America. The registered office of Eidos Interactive France SARL is 8th Floor, 6  Boulevard du General Leclerc, 92115 Clichy, France. The registered office of Eidos Interactive (Deutschland) GmbH is  Grosse Elbstrasse 145d, 22767, Hamburg, Germany. The registered office of Eidos Interactive KK is Etsuzan LK Building  4F, 1-10-4, Hiroo, Shibuya-Ku, Tokyo 150-0012, Japan. The registered office of Eidos Interactive Pte Limited is 15b Circular  Road, Singapore 049371. The registered office of Ion Storm LLP is CT Corporation System, 350 North St Paul Street,  Dallas, Texas, TX 75021 United States of America. The registered office of Proein SL and Pyro Studios SL is Euromor  Building, Avenida de Burgos 16-D, Madrid, Spain

Eidos Interactive, Inc., Crystal Dynamics, Inc., and Ion Storm LLP are incorporated and operate in the United States. Eidos  Interactive France SARL, is incorporated, and operates in France. Eidos



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Property, Plant and Equipment

The Group maintains an aggregate of approximately
  128,352 square feet of office and commercial studio space in London and Derby,
  England; in Hamburg, Germany; in Paris, France; in San Francisco and Palo Alto,
  California, and Austin, Texas, U.S.; in Tokyo, Japan and in Singapore.

Details of the principal establishments of the Group are as follows:

|Property                                                                                                                               | Tenure                                                       |  | Description |  | Approximate
      Area Occupied
      (square feet) | 
|-------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ |  | ----------- |  | --------------------------------------------------- | 
|                                                                                                                                       |                                                              |  |             |  |                                                     | 
|Eidos plc
      Eidos Interactive Limited
      Part 2nd Floor
      Wimbledon Bridge House
      Hartfield Road
      London SW19 3RU | Leasehold
      10 years from November 22, 1996              |  | Office      |  | 19,000                                              | 
|Core Design Limited
      2 Roundhouse Road
      Pride Park
      Derby DE24 8JE                                                      | Leasehold 15
      years from October 15, 1999               |  | Office      |  | 12,320                                              | 
|Eidos Interactive, Inc.
      651 Brannan Street
      4th Floor,
      San Francisco
      California 94107                           | Leasehold 5
      years from May 12, 2002                    |  | Office      |  | 15,000                                              | 
|Crystal Dynamics, Inc.
      64 Willow Place
      Menlo Park
      California 94025-3691                                              | Leasehold from
      January 1, 1999 to
      March 31, 2007 |  | Office      |  | 26,788                                              | 
|Eidos Interactive France SARL
      8th Floor
      6 Boulevard du General Leclerc
      Clichy                                        | Leasehold 9
      years from September 21, 1994              |  | Office      |  | 3,422                                               | 
|Eidos Interactive (Deutschland) GmbH
      145d Grosse Elbstrasse,
      22767 Hamburg                                                 | Leasehold 3
      years from October 15, 1999                |  | Office      |  | 10,764                                              | 
|Eidos Interactive KK
      Etsuzan LK Building 4F,
      1-10-4, Hiroo,
      Shibuya-Ku,
      Tokyo 150-0012, Japan                  | Leasehold 2
      years from June 25, 2002                   |  | Office      |  | 2,337                                               | 
|Eidos Interactive Pte Limited
      15b Circular Road
      Singapore 049371                                                           | Leasehold 2
      years from June 15, 2002                   |  | Office      |  | 1,024                                               | 
|Ion Storm LLP
      8303 Mopac,
      Austin, Texas                                                                                    | Leasehold 4
      years from October 30, 2000                |  | Office      |  | 19,915                                              | 
|Pyro Studios SL
      1st Floor,
      Avenida de Burgos 16-D,
      Madrid                                                            | Leasehold 5
      years from August 19, 1998                 |  | Office      |  | 8,073                                               | 
|Proein SL
      3rd Floor,
      Avenida de Burgos 16-D,
      Madrid                                                                  | Leasehold 5
      years from May 30, 2001                    |  | Office      |  | 4,036                                               | 
|Proein SL
      Poligono Casablanca-2,
      Doctor Severo Ochoa,
      37-Alcobendas, Madrid                                          | Owned                                                        |  | Warehouse   |  | 5,673                                               | 

The principal place of business of each of the above companies is the first relevant address shown above.



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ITEM 5 – OPERATING AND FINANCIAL
  REVIEW AND PROSPECTS

The following discussion of the financial condition and results of operations of the Group should be read in conjunction  with the Group's Consolidated Financial Statements and Notes included elsewhere in this report. The following  discussion contains forward-looking statements that involve risks and uncertainties. See ''Cautionary Statement with  Respect to Forward-Looking Statements'' at the beginning of this report.

Overview

The Group's future success is dependent upon it developing and publishing additional entertainment software titles and  such titles achieving significant market acceptance. The Group maintains its accounting records and reports its results in  pounds sterling in accordance with U.K. GAAP. There are material differences between U.K. GAAP and U.S. GAAP (these  are discussed in Note 32 of the Consolidated Financial Statements).

Following a protracted transitional phase in the video game industry, all of the next generation consoles have now been  launched in the major commercial markets in which the Group operates. Based on the reported increases in the installed  bases of the next generation systems and on independent projections of future installed base numbers, the prospects for  growth in the entertainment software market are believed to be strong.

Due to the slippage of a small number of titles and to the relative underperformance of certain other titles released in the  year, turnover for the year ended March 31, 2002 is down on the prior year. Gross margins have however improved  significantly over the same period and the Group has reduced its fixed cost base. These factors combined with  exceptional income on the sale of an investment during the period (see Exceptional Items below) meant that the Group  was able to reduce its net loss from £97.3 million in the prior year to £14.2 million in the current year.

The Group has experienced, and expects to continue to experience, significant fluctuations in operating results due to a  variety of factors including, among others: (i) the timing and success of product introductions; (ii) market acceptance of  the Group's products; (iii) delays in product completion; (iv) higher than expected product returns; (v) projected and  actual changes in platforms; (vi) changes in pricing policies by the Group and its competitors; (vii) costs associated with  the write-off of discontinued development projects; (viii) development and promotional expenses relating to the  introduction of new products or new versions of existing products; and (ix) the size and rate of growth of the consumer  software market. In response to competitive pressures, the Group may take certain pricing or marketing actions that could  materially adversely affect the Group's business, results of operations and financial condition. Products are generally  shipped as orders are received; accordingly, the Group operates with little backlog. The Group's expense levels are based,  in part, on its expectations regarding future sales, and, as a result, operating results would be disproportionately and  adversely affected by a decrease in sales or a failure to meet the Group's sales expectations. Furthermore, the  entertainment software business is highly seasonal. Net revenues are typically significantly higher during the fourth  calendar quarter, due primarily to the increased demand for entertainment software products during the year-end holiday  buying season. Net revenues in other quarters are generally lower and vary significantly as a result of new product  introductions and other factors. As a result of the foregoing, results of operations can be expected to fluctuate  significantly from period to period.

The Group has historically recorded a significant proportion of its costs in pounds sterling. In the year ended March 31,  2002, 48% of the Groups total costs (excluding goodwill) were in sterling and 52% were paid in currencies other than  sterling. This represents a 5% increase in the level of the Group's non-sterling expenditure over the year. As in previous  years, a higher proportion of turnover, 68%, is denominated in non-sterling currencies, primarily Euros and U.S. dollars.  These increases underline the level of savings which have been achieved in sterling denominated operating expenses  over the period. In addition the increasing exposure to trade in non sterling currencies reflects the Group's on going  commitment to building its overseas operations and in particular, its increasing level of investment in its wholly and  partially owned development



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studios,
the majority of which are based outside of the UK. The Group reports its results
in sterling; as a result, changes in the value of the pound sterling in relation
to other currencies will affect the Group's turnover and operating margins. The
impact of future exchange rate fluctuations between the pound sterling and other
currencies on the Group's turnover and operating margins cannot be accurately
predicted. Over the past several years, the Group has taken steps to reduce its
exposure to currency fluctuation through foreign exchange management aimed at
protecting margins and fixing future pound sterling cash flows. In particular,
the Group has adopted a policy of hedging against the devaluation of a portion
of its short-term foreign currency cash flows using forward contracts and currency
swaps issued by the Company's bankers. At March 31, 2002, unhedged currency net
assets totaled £11.7 million (predominantly U.S. dollars and Euros), and
there were no open derivative positions as at this date.

Exceptional Items

Under U.K. GAAP, the Group has disclosed its net profit on the disposal of certain investments during the year ended  March 31, 2002 as an ''exceptional,'' item for the period. Details of these disposals are explained below and in Note 13 to  the Consolidated Financial Statements. During the year ended March 31, 2001 the Group presented an alternative profit  and loss account format to show the effect of a number of unrelated exceptional charges. The exceptional items disclosed  in both years do not meet the definition of ''Extraordinary items'' under U.S. GAAP. Any commentary in this document  relating to ''exceptional items'' should therefore be read for U.S. GAAP purposes as an ''unusual item.''

Year ended March 31, 2002

Exceptional income on sale of investments

The Group disposed of its remaining shareholding in Opticom during the year ended March 31, 2002 realising net  proceeds of £11.0 million and a net profit of £8.5 million. This profit was partially off-set by write downs and losses on  other disposals of £4.1 million, which occurred following a review of the Group's other investments in the period.

Year ended March 31, 2001

Additional returns provisions for products released in prior fiscal year

During the six months ended September 30, 2000, trading conditions for the Group continued to be difficult as the  uncertainty persisted surrounding the release of new hardware platforms. Although sales of product launched in the half  year were in line with expectations, the sell through during the period of titles released in the previous fiscal year was  significantly lower than had previously been anticipated. Consequently, the provisions made at the end of the previous  fiscal year against stock then in the retail channel proved to be inadequate and a further £16.9 million exceptional charge  to turnover and profit was made.

Write down of investment in Express.com

In November 1999, the Company acquired an interest in Express.com (''Express'') an internet company, for $55 million.  During fiscal 2001, it became clear that Express was experiencing severe commercial difficulties in common with many  other internet companies and the Group consequently decided to make full provision against the carrying value of the  investment during the year. In March 2001, Express filed for federal bankruptcy protection under Chapter 11 of the U.S.  bankruptcy code.

Legal and professional fees in relation to aborted takeover talks

During the period £0.9 million legal and professional fees were incurred in respect of bid talks, previously disclosed in the  6-k filing for the quarterly period ended September 30, 2000.

Unless otherwise indicated, all financial results and analyses in this document refer to the Group's U.K. GAAP financial  statements.





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Results of Operations

The following table sets forth the actual selected statements of operations data of the Group as a percentage of turnover  for the periods presented:

Consolidated Statements of Operations Data:

|                                                                                                  | Year ended March 31, |       | Year ended March 31,      |  | Year ended March 31,    |    | Year ended March 31, |      
|------------------------------------------------------------------------------------------------- | -------------------- | ----- | ------------------------- |  | ----------------------- | -- | -------------------- | -----
|                                                                                                  |                      |       |                           |  |                         |    |                      |      
|As a percentage of turnover                                                                       | 2000                 |       | 2001                      |  | 2001                    |    | 2002                 |      
|                                                                                                  |                      |       |                           |  |                         |    |                      |      
|                                                                                                  |                      |       | Before  exceptional items |  | After
exceptional
items |    |                      |      
|Turnover                                                                                          |                      | 100.0 | %                         |  | 100.0                   | %  |                      | 100.0
|Cost of sales                                                                                     |                      | 45.1  | %                         |  | 49.8                    | %  |                      | 55.5 
|                                                                                                  |                      |       |                           |  |                         |    |                      |      
|Gross profit                                                                                      |                      | 54.9  | %                         |  | 50.2                    | %  |                      | 44.5 
|Operating expenses:                                                                               |                      |       |                           |  |                         |    |                      |      
|Selling and marketing                                                                             |                      | 23.3  | %                         |  | 25.3                    | %  |                      | 28.2 
|Research and development                                                                          |                      | 23.8  | %                         |  | 25.9                    | %  |                      | 28.9 
|Goodwill amortization                                                                             |                      | 5.1   | %                         |  | 6.6                     | %  |                      | 7.4  
|Other general and administrative                                                                  |                      | 14.9  | %                         |  | 13.8                    | %  |                      | 16.0 
|                                                                                                  |                      |       |                           |  |                         |    |                      |      
|Income/(loss) from operations                                                                     |                      | (12.2 | %)                        |  | (21.4                   | %) |                      | (36.0
|Income from joint ventures                                                                        |                      | 0.3   | %                         |  | 0.5                     | %  |                      | 0.6  
|Joint Venture goodwill amortization                                                               |                      | (1.8  | %)                        |  | (3.2                    | %) |                      | (3.5 
|Income/(loss) from sale of investments or termination of operations and write down of investments |                      | 41.2  | %                         |  | —                       |    |                      | (24.7
|Income from investments                                                                           |                      | —     |                           |  | 0.1                     | %  |                      | 0.1  
|Interest expense, net                                                                             |                      | (2.2  | %)                        |  | (1.7                    | %) |                      | (2.0 
|Provision for income taxes                                                                        |                      | (12.4 | %)                        |  | (0.6                    | %) |                      | (0.6 
|                                                                                                  |                      |       |                           |  |                         |    |                      |      
|Net income                                                                                        |                      | 12.9  | %                         |  | (26.3                   | %) |                      | (66.1

Year ended March 31, 2002 compared to the year ended March 31, 2001

Revenue: Turnover for the twelve months ended March 31, 2002 decreased 26.7% from £164.2 million (pre exceptional  charges) to £120.3 million.

In the twelve months ended March 31, 2002 we shipped twenty new titles (2001: twenty), including eleven for PlayStation  2 and two for Xbox. A number of key franchise titles such as Blood Omen 2, Soul Reaver 2, and the PC CD versions of  Commandos 2 and Championship Manager Season 01/02, all sold in excess of 350,000 units during the period.  Championship Manager Season 01/02 became the UK's fastest selling PC CD title of all time when it launched in October  2001, whilst Blood Omen 2 was a top five title on both PlayStation 2 and Xbox, when it shipped in the USA at the end of  March 2002. Whilst we were broadly satisfied with the performance of these particular titles the balance of our portfolio of  new releases did not meet expectations. Catalogue sales of earlier versions of franchise titles such as Tomb Raider and  TimeSplitters remained strong in the period.

Gross Margin and Cost of Sales: The gross margin for the year ended March 31, 2002 was 59.5% compared to 50.2% (pre  exceptional charges) for the corresponding period last year. Improved controls over channel and inventory exposures  contributed to the increase in margins in the period, whilst royalty costs were also greatly reduced. This was partly as a  result of the shift towards internally developed titles and the reduced reliance on licensed titles during the period. Gross  margins are forecast to fall slightly in the coming year as a result of a shift in the sales mix



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towards console titles, however they are nevertheless expected to remain significantly ahead of  the levels reported in the year ended March 31, 2001.

Operating expenses before goodwill fell by
  24.8% to £80.2 million for the year ended March 31, 2002, compared to
  £106.7 million for the same period last year (pre exceptional charges).
  Whilst improved controls over variable marketing expenses have contributed to
  this decrease, the majority of the savings have come from sustained downward
  pressure on the Group's fixed cost base. Overall fixed costs excluding goodwill
  and exceptionals were reduced by 28.7% in the year ended March 31, 2002 from
  £46.6 million to £33.2 million, on a like for like basis. Over a
  two-year period the Group has now exceeded its target for reducing the level
  of fixed costs, by achieving on-going savings of £22.7 million, on this
  basis. It is the Group's intention to actively manage its fixed costs at this
  lower level, after adjusting for one off costs and any effects of the change
  in year end.

Selling and Marketing:Improved controls over variable advertising costs were introduced into the Group's publishing  businesses during the period, with the aim of targeting annual expenditure more effectively. Advertising costs in the  twelve months ended 31 March 2002 were £12.3 million (10.3% of turnover) compared to £23.1 million (14.1% of pre  exceptional turnover) for the same period last year. During the period retail co-operative advertising expenses of £1.9  million incurred in the USA were reclassified from turnover to advertising costs (2001: £3.8 million). This treatment more  accurately reflects the nature of the expenditure and allows closer monitoring within the improved framework of controls  on variable advertising spend.

The fixed element of selling and marketing costs was down 55.4% to £8.2 million for the year ended March 31, 2002  compared to £18.4 million in the prior year. The significant reduction in expenditure is due to reduced exhibition  expenditure in the period and permanent savings arising from salary and licence amortisation costs in our publishing  businesses.

Research and Development:Research and development represents the Company's total investment in product  development of £39.4 million (2001: £42.5 million). The reduction in expenditure reflects the continued move towards  internal development, which is one of the cornerstones of the Group's future development strategy. The Group intends to  maintain this level of investment in developing titles for future release.

General and Administrative:General
  and administrative costs before goodwill amortisation were £20.3 million
  for fiscal 2002, compared to £22.6 million (pre exceptional charges) for
  the prior year. The reduction in like for like expenditure reflects significant
  permanent savings in salary and other costs. Total general and administrative
  costs for the period were £27.2 million for fiscal 2002 including goodwill
  amortisation of £6.9 million, compared to £33.5 million including
  goodwill amortisation of £10.9 million (pre exceptional charges) for the
  prior year. The reduction in the amortisation charge resulted from the goodwill
  relating to the 1998 acquisition of Crystal Dynamics becoming fully amortised
  during the period.

Financing and Cashflow:The Group had net cash balances of £50.6 million at March 31, 2002 (2001: £9.5 million). The  strong closing cash position reflects the success of the Rights Issue in July 2001 and the disposal of the Group's  remaining stake in Opticom in November and December 2001. Enhanced working capital and tax management  procedures have also contributed to the improvement in the Group's cash position, which remains higher than following  the Rights Issue.

The net cash outflow from operating activities was £15.4 million for the year ended March 31, 2002 compared to a £1.9  million inflow in the corresponding prior period. This outflow reflects the operating loss incurred and the significant  number of new releases which shipped towards the end of the period.



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Exceptional items:The Group disposed of its remaining shareholding in Opticom during the year ended March 31, 2002,  realising net proceeds of £11.0 million and a net profit of £8.5 million. This profit was partially off-set by write downs and losses on other disposals of £4.1 million, which  occurred following a review of the Group's other investments in the period.

Taxation:Based on the level of losses sustained, there is no tax charge in the period. There are still significant brought  forward losses available within the Group to offset future trading profits. The Group has however reviewed the provisions  of FRS19 – Deferred Tax, and believes that no further amounts should be recognised in respect of these losses.

Financial Reporting Standard 19 Deferred Tax (FRS 19) has been adopted by the Group. Under FRS 19, deferred tax is  provided for on certain timing differences in full. FRS19 requires prior years to be restated. However the impact on net  income of the implementation of FRS 19 on the Group was nil for the years ended March 31, 2000, 2001 and 2002. In  accordance with FRS 19, deferred tax assets are regarded as recoverable to the extent that, on the basis of all available  evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future  reversal of the underlying timing differences can be deducted.

Net Loss: Operating losses pre goodwill and exceptional charges were reduced by 69.2% from £23.3 million for fiscal 2001  to £7.2 million for fiscal 2002. The net loss for the twelve months to March 31, 2002 was £14.2 million, compared to a loss  of £97.3 million in fiscal 2001 and net income of £25.2 million in fiscal 2000. The loss per share was 10.7p, or 1.6p  excluding goodwill, for the year ended March 31, 2002 compared to 84.5p and 70.5p respectively for the prior year, based  on a weighted average number of shares in issue during for the year ended March 31, 2002 of 132,514,410 (2001:  115,223,869). The 2001 comparatives for earnings per share have been restated for the Rights Issue that occurred during  the current period, in accordance with FRS14 – Earnings per share.

Year ended March 31, 2001 compared to the year ended March 31, 2000

(NB: This section has been reclassified since the Form 20-F for the year ended March 31, 2001 due to changes to U.K.  accounting policies in fiscal 2002, which effected turnover and the split of operating expenses.)

Revenue.Turnover for the full year decreased by 15.7% from £194.8 million to £164.2 million for the year ended March 31,  2001, before the exceptional charge incurred in respect of returns.

Twenty new games, only four fewer than in 2000, were released during the year ended March 31, 2001. Two titles sold  significantly in excess of one million units: ''Who Wants To Be A Millionaire?'' and Tomb Raider: Chronicles. ''Who Wants  To Be A Millionaire?'' became the fastest selling title to reach one million units sold in the U.K. A German version of ''Who  Wants To Be A Millionaire?'' was released in the fourth quarter of fiscal 2001. The Group shipped in excess of 200,000  units to that market, making it the biggest selling game on the PC and PlayStation formats in fiscal 2001.

The Group had further success with other titles during the year. Championship Manager and Sydney 2000 both shipped  in excess of 350,000 units during fiscal 2001.

Approximately 61% of the Group's game revenues were derived from console-based games in fiscal 2001 compared to  71% in fiscal 2000. This reflects the strength of certain PC titles released during the year relative to the previous year,  notably ''Who Wants to be a Millionaire?'' and Deus Ex.

Gross Margin and Cost of Sales. Cost of sales represents the manufacturing costs of the games, origination (design of  packaging and other printed material), storage, distribution and royalties. The manufacturing cost of PlayStation,  PlayStation 2 and Dreamcast games includes the royalties payable to Sony and Sega; this had the effect of reducing the  gross margin on these





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games. Before the exceptional charge to turnover, gross margin was 50.2% for fiscal 2001  compared to 54.9% in fiscal 2000.

The Group undertook a comprehensive program in the fourth quarter of fiscal 2001 to reduce its exposure to further write  downs of retail channel and warehouse inventories and this has contributed to reducing margins for the year.

Selling and Marketing. Selling and marketing expense consists of advertising costs and the cost of promotional licenses  and sales and marketing personnel. Advertising costs for fiscal 2001 were £23.1 million (14.0% of turnover excluding  exceptional charges) compared to £25.2 million (12.9% of turnover) in 2000.

The cost of promotional licenses and sales and marketing personnel decreased 8.0% to £18.5 million in fiscal 2001  compared to £20.1 million in the prior year. The lower amortization of promotional licenses reported earlier in the year  was reversed in the final quarter of fiscal 2001 with a £2.0 million charge arising from the accelerated amortization of  certain prepaid license fees. Overall, however, this one time charge was offset by savings generated from the disposal or  termination of non-core activities and by the imposition of tighter controls on expenditure in the remaining publishing  businesses.

Research and Development. Research and development represents the Company's investment in product development,  which was £42.5 million in fiscal 2001 (2000: £46.3 million). Included in this category is pure research and development  overhead of £0.3 million (2000: £2.1 million), which largely comprises staff costs. The reduction in research and  development expenditure reflected the Group's increasing emphasis on internally-developed titles and the leveraging of  established franchises onto new hardware platforms in the product pipeline. The termination of certain non-core activities  led to the decrease in pure research and development expenditure.

General and Administrative. Before amortization of goodwill of £10.9 million and excluding exceptional charges, general  and administrative costs were £22.6 million in fiscal 2001 (13.8% of turnover excluding exceptional charges), compared to  £29.2 million in fiscal 2000 (15.0% of turnover). This reduction is largely the result of the greater control of staff costs and  other corporate costs in the year.

Taxation.The taxation charge of £1.0 million in fiscal 2001 comprises £0.6 million in respect of income generated in fiscal  2001 and £0.4 million in respect of adjustments to prior year's taxation provisions. The current year's charge arises  entirely from the profitability of certain of the Group's overseas subsidiaries and joint ventures. Certain countries have  incurred losses for which no credit had been given in fiscal 2001, which may be available in future years.

Net Loss. The Group reported a net
  loss of £97.3 million (after exceptional charges of £54.1 million)
  in fiscal 2001 compared to net income of £25.2 million (after exceptional
  income of £80.2 million) for the previous fiscal year. Operating losses
  before exceptional charges were £39.5 million, after goodwill amortization
  of £16.1 million in fiscal 2001, compared to operating losses of £26.8
  million after goodwill amortization of £13.4 million in the previous year.
  After exceptional charges, the Group reported a loss per share of 84.5p in fiscal
  2001 (2000: earnings per share of 23.3p). Excluding goodwill and exceptional
  charges, the loss per share was 23.5p for fiscal 2001 (2000: loss per share
  of 38.5p).

Critical Accounting Policies

The Group prepares its consolidated financial
  statements in accordance with UK GAAP as described under the heading ''Item
  3 – Key Information – Selected Financial Data'' and reconciles such
  to US GAAP. In preparing the consolidated financial statements in accordance
  with both UK GAAP and US GAAP senior management have to make certain key assumptions
  and estimates that affect the reported amounts of assets and liabilities and
  disclosure of contingent liabilities at the date of the financial statements
  and the reported amounts of revenues and expenses during



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the reporting  periods. In doing so, they have to exercise considerable judgement in respect of matters which are inherently uncertain.  The accounting policies described below are considered critical by senior management because they provide the  framework within which the Group attempts to quantify and assess the assumptions and estimates which have the greatest bearing  on the consolidated financial statements. Any change in the estimates used could materially  affect the reported results and actual conditions may differ from those assumed.

Sales Returns and Allowances and Price Protection Reserves

The majority of the Group's reported revenue
  is derived from the sale of pre-packaged entertainment software. Revenue is
  recorded at the point of sale, net of taxes and provisions for future returns
  and price protection. In common with other publishers of entertainment software
  the Group operates a number of territory-specific programmes under which retailers
  may qualify to return unsold product, subject to certain qualifying conditions.
  Alternatively the Group may offer price protection programmes in certain markets,
  though again these are subject to the satisfaction of certain qualifying conditions.
  Typically the Group maintains a policy of issuing credits under such programmes.

By analysing historical rates of return and price protection in conjunction with a number of key variables including the  prevailing market and economic conditions at that time, the Group is able to estimate future expected rates of returns and  price protection. The adequacy of the reserves generated by these estimated rates is reviewed regularly in the light of  current market and economic conditions, considering in particular up to date patterns of sell-through, anticipated trends  in the hardware and software markets, seasonal factors, perceived consumer preferences and general economic  conditions.

In the past the Group has not always been able to accurately estimate the adequacy of its reserves and in the year ended  March 31, 2001 reported an exceptional charge of £16.9 million in respect of additional returns reserves required. At the  time the Group reported that this was caused by the sell through of products released in the previous year being less than  anticipated as a result of continuing consumer uncertainty surrounding the release of new video game hardware  platforms. Since then all of the new hardware platforms have now been successfully launched and senior management  have taken significant steps to impose new procedures and controls on the estimation of the Group's exposure to future  returns and price protection. In addition measures have been put in place to control the flow of new product into the  market place as over stocking in retail and distribution channels may also generate significant future exposures for the  Group. The senior management of the Group believes that the controls that they have put in place enable it to make a  more realistic estimation of the group's exposure to future returns and price protection. Nevertheless if the Group were to  change certain of the key estimates or assumptions that underpin its calculations, then the level of reserves carried at the  balance sheet date would be altered as would the reported net loss for the period. Similarly if actual credits issued for  returns and price protection are in excess of the level of reserves carried, then future reported revenues might be reduced  in the future. Conversely if the level of actual credits is less than the reserve, then this could increase future reported  revenues. The Group's total reserve in respect of future returns and price protection at March 31, 2002 was £16,383,000.  (March 31, 2001: £14,244,000).

Pre-paid license fees

The Group prepays certain licence fees paid
  to celebrities and professional sports organisations for the use of their name
  over a number of years or for a range of products. Prepaid royalties are charged
  to the profit and loss account as sales and marketing expenditure over the life
  of the licence. Management regularly reviews the carrying value of such licences
  and where it appears unlikely that any remaining prepaid amounts will be recovered
  through the sale of future licensed titles, then these remaining amounts will
  be expensed in full immediately. In reviewing the recoverability of prepaid
  royalties, senior management relies on forecasts of future revenues.





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If revised
  revenue forecasts fall below the original forecasts, then the charge to the
  profit and loss account may be greater than expected in any given reporting
  period.

The total amount of pre-paid royalties carried
  within debtors at March 31, 2002 was £2,819,000 (March 31, 2001: £3,855,000).

Taxes

The estimation of the Group's consolidated
  tax charge is a complex matter encompassing many different international tax
  jurisdictions. In calculating the Group charge management has to make certain
  estimates regarding individual exposures in different countries and assess the
  recoverability of deferred tax assets. It can often take many years to finalise
  individual tax charges and to reach agreement on areas of contention with the
  relevant tax authorities. There is no guarantee that the level of provision
  carried in respect of open tax items at any one time, will be sufficient to
  meet final liabilities as they are agreed and fall due. In reviewing the recoverability
  of deferred tax assets the Group has to estimate future taxable income for the
  relevant countries. To the extent that these estimations indicate that any such
  assets are not recoverable, then full provision will be made against their carrying
  value. Changes in the estimates used to assess the recoverability of deferred
  tax assets could affect the level of assets carried in the balance sheet at
  the period-end and also the level of tax charge in the profit and loss account
  for the period.

Valuation of Investments and Asset Impairment

The Group capitalises and amortises goodwill
  in respect of the acquisition of certain subsidiaries and associated undertakings
  in accordance with FRS10: Goodwill and Intangibles. Certain other investments
  in subsidiaries and associated undertakings are carried at cost. The Group makes
  certain estimates regarding the useful life of goodwill that take account of
  a number of factors including the future prospects for the entity concerned
  and the consequent projections for both net income and net cash-flow. To the
  extent that these projections no longer justify the carrying value of any remaining
  goodwill, then the amortisation charge will be accelerated to the degree required
  to reflect the revised estimate of the fair value of the goodwill. The carrying
  value of investments carried at cost are also reviewed in a similar fashion
  and to the extent that an investment's carrying value can be shown to be permanently
  impaired, then full provision will be made through the profit and loss account.

The estimates used in assessing the carrying value of both goodwill and investments carried at cost rely on assumptions  made about the performance and prospects of the entities themselves and also about the markets in which they operate.  Where the entities do not have an established track record or where they are operating in new or emerging markets then  the inherent uncertainty in forecasting future performance may be compounded.

To the extent that projections no longer substantiate the recorded values of either goodwill or investments carried at cost,  then net income may be adversely affected. The value of unamortised goodwill held within intangible assets at March 31,  2002 was £2,552,000. (March 31, 2001: £13,837,000). The carrying value of investments carried at cost within fixed asset  investments at March 31, 2002 was £2,887,000. (March 31, 2001: £5,063,000)

Valuation of inventory

The Group carries its inventory of finished
  goods at the lower of cost and net realisable value. In order to determine what
  this carrying value should be, management has to estimate the price that they
  expect to achieve on the future sale of the stock. This process involves reviewing
  current patterns of demand in the market and projecting these forward. It may
  also require an assessment of how future demand could be affected by changes
  in the wholesale price charged by the Group and by other factors that may be
  beyond the control of the group. In this way management will seek to determine
  the most realistic price that they believe can be achieved and hence the likelihood
  that inventories on hand can be sold at or above cost. Should





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management's estimates of current or future demand prove to be unrealistic, then the Group may fail  to achieve a wholesale price that is sufficient to cover the carrying value of the inventory and hence the charge to the  profit
and loss
account may be greater than expected.

The total amount of inventory on hand at March 31, 2002 was £3,928,000 (March 31, 2001: £3,115,000).

New Accounting Standards

New UK Accounting Standards and Pronouncements
  Applicable to the Group

There were no new UK accounting standards
  applicable to the Group.

New US Accounting Standards and Pronouncements
  Applicable to the Group

Goodwill and Intangible Assets

In July 2001, the Financial Accounting Standards Board ("FASB'') issued Statement of Financial Accounting Standard  ("SFAS'') No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141  requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as  well as all purchase method business combinations completed after June 30, 2001. SFAS No. 141 also specifies criteria  intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart  from goodwill, noting that any purchase price allocable to an assembled workforce may not be accounted for separately.  SFAS No. 142 will require that goodwill and intangible assets with indefinite useful lives no longer be amortized, but  instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142. SFAS No. 142 will also  require that
intangible a
ssets with definite useful lives be amortized over their respective estimated useful lives to their  estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, Accounting for the Impairment  of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.

The Group is required to adopt the provisions of SFAS No. 141 immediately and SFAS No. 142 is effective for fiscal years  beginning after December 15, 2001. Furthermore, any goodwill and any intangible asset determined to have an indefinite  useful life that are acquired in a purchase business combination completed after June 30, 2001 will not be amortized, but  will continue to be evaluated for impairment in accordance with the appropriate pre-SFAS No. 142 accounting literature.  Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 will continue to be  amortized prior to the adoption of SFAS No. 142.

SFAS No. 141 requires that the Group evaluate its existing intangible assets and goodwill that were acquired in a prior  purchase business combination, and to make any necessary reclassifications in order to conform with the new criteria in  SFAS No. 141 for recognition apart from goodwill. SFAS No. 142 requires the Group to reassess the useful lives and  residual values of all intangible assets acquired in purchase business combinations, and make any necessary  amortization period adjustments by the end of the first interim period after adoption. In addition, to the extent an  intangible asset is identified as having an indefinite useful life, the Group is required to test the intangible asset for  impairment in accordance with the provisions of SFAS No. 142 within the first interim period. Any impairment loss is  measured as of the date of adoption and recognized as the cumulative effect of a change in accounting principle.

In connection with the transitional goodwill
  impairment evaluation, SFAS No. 142 requires the Group to perform an assessment
  of whether there is an indication that goodwill and equity-method goodwill is
  impaired as of the date of adoption. To accomplish this the Group must identify
  its reporting units and determine the carrying value of each reporting unit
  by assigning the assets and liabilities, including the existing goodwill and
  intangible assets, to those reporting units as of the date of adoption. The
  Group has up to six months from the date of adoption to determine the fair value
  of each reporting unit and compare it to the reporting unit's carrying amount.
  To the extent a reporting unit's carrying amount exceeds its fair value, an
  indication



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exists that the reporting unit's goodwill
  may be impaired and the Group must perform the second step of the transitional
  impairment test. In the second step, the Group must compare the implied fair
  value of the reporting unit's goodwill, determined by allocating the reporting
  unit's fair value to all of it assets (recognized and unrecognised) and liabilities
  in a manner similar to a purchase price allocation in accordance with SFAS No.
  141, to its carrying amount, both of which would be measured as of the date
  of adoption. This second step is required to be completed as soon as possible,
  but no later than the end of the year of adoption. Any transitional impairment
  loss will be recognized as the cumulative effect of a change in accounting principle
  in the Group's statement of earnings.

And finally, any unamortized negative goodwill and negative equity-method goodwill existing at the date SFAS No. 142  was adopted must be written off as the cumulative effect of a change in accounting principle.

At March 31, 2002, the Group
  was required to segregate and specifically identify intangible assets into goodwill
  and other intangible assets recorded in our consolidated financial statements
  comprise only goodwill. In addition, because of the extensive effort required
  to comply with SFAS No. 141 and 142, it is not practicable to reasonably estimate
  the impact of any transitional impairment losses required to be recognised as
  the cumulative effect of a change in accounting principle at the date of this
  document.

Impairment or Disposal of Long-Lived Assets

SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, addresses financial accounting and  reporting for the impairment or disposal of long-lived assets. While SFAS No. 144 supersedes SFAS No. 121, Accounting  for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, it retains many of the fundamental  provisions of that Statement. SFAS No. 144 also supersedes the accounting and reporting provisions of APB Opinion No.  30, Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,  Unusual and Infrequently Occurring Events and Transactions, for the disposal of a segment and extends that reporting to  a component of an entity that either has been disposed of (by sale, abandonment, or in a distribution to owners) or is  classified as held for sale.

SFAS No. 144 is effective for fiscal years beginning after December 15, 2001 and interim periods within those fiscal years.  The Statement is to be applied prospectively. Early adoption is permitted. The Group has not yet determined the impact, if  any, the adoption of this standard will have on its financial position or results of operations.

Liquidity and Capital Resources

The Group's policy is to use a combination of committed bank facilities and equity in order to ensure that it has sufficient  financial resources to meet its short and long term funding requirements.

Subsequent to the end of fiscal 2001, a 1 for 3 rights issue was announced. In this rights issue, each holder of three  Ordinary Shares (excluding holders of American Depositary Shares, and ordinary shareholders located in the U.S. and  Canada, Australia, Ireland or Japan) was offered the right to purchase one ordinary share for £1.55.Following receipt of  £51.6 million, net of expenses, raised from the rights issue, the Group's borrowings were repaid and the terms of the  credit facility with the Royal Bank of Scotland amended to a committed £15 million multi currency facility (repayable May  2003). This facility is secured by a fixed and floating charge over the assets of the Group. During the year a separate  borrowing facility of £0.8 million was secured by the Group's Japanese subsidiary.

As at March 31, 2002, the Group had undrawn
  committed facilities of £15.7 million, denominated £15 million in
  Sterling and £0.7 million in Japanese Yen. Following the successful Rights
  Issue



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and the sale of its remaining stake in Opticom,  the Group did not need to draw down against its Sterling facility during the year. Under the terms of the Sterling facility, a  draw down would only have been permissible if certain covenants had been complied with. For certain periods during the  year, one of these covenants was not met. The Group does not believe that this factor affected either its commercial credit  rating or its ability to access alternative sources of financing.

The Group also held short-term deposits at
  March 31, 2002 of £34.0 million. Credit risk on transactions is minimized
  by operating within the parameters of the Group treasury policy. Most of the
  Group's surplus funds are held in the United Kingdom and there are no material
  funds as to which repatriation is restricted as a result of foreign exchange
  regulations.

The Group has now negotiated a new revised
  £15 million facility with the Royal Bank of Scotland. It will be made
  available to the Group for 364 days from the date of signing. The facility has a covenant package that will vary over
  its term. Should the Group fail to meet any of the covenants which apply at
  any given point in time, then it may be unable to draw down under the facility.
  Other factors which may affect the Group's ability to maintain an appropriate
  level of liquidity include, but are not limited to, the degree to which new
  product releases achieve market acceptance, the ability to collect account's
  receivable as they fall due and general economic conditions in the major markets
  in which the Group operates. The other matters discussed under the heading "Risk
  Factors'', should also be considered in this respect.

The Group believes that the requirements of
  its existing business and future investment can be met for at least the next
  12 months from the capital raised from the rights issue, cash generated internally
  and from the £15 million bank facility.

Capital Resources

At March 31, 2002, the Group had net assets of £73.4 million, compared to £30.6 million at the start of the year. The  increase is mainly the result of from the proceeds from the rights issue discussed above.

Net assets as at March 31, 2002 included goodwill
  of £2.6 million (2001: £13.8 million), tangible fixed assets and
  investments of £8.2 million (2001: £9.6 million), net current assets
  of £65.6 million (2001: £9.5 million) and other liabilities of £3.0
  million (2001: £2.3 million).

Net funds (ie net cash less net debt) increased by £41.2 million during the year. This reflects the net cash outflow before  management of liquid resources and financing of £11.4 million and the proceeds from the Rights Issue. Operating  activities generated a net cash outflow of £15.4 million (2001: cash inflow of £1.9 million) reflecting primarily the £15.5  million operating loss for the year.

Material commitments

The following table shows amounts committed
  to as at March 31, 2002. Further details are available in Item 8, Notes 26 and
  27.

|                                                                        | As at March 31, 2000 |        | As at March 31, 2001 |  | As at March 31, 2002 | 
|----------------------------------------------------------------------- | -------------------- | ------ | -------------------- |  | -------------------- | 
|                                                                        | <1 year              |        | 2-5 years            |  | >5
      years       | 
|                                                                        |                      |        |                      |  |                      | 
|In thousands                                                            |                      | £'000  |                      |  | £'000                | 
|                                                                        |                      |        |                      |  |                      | 
|Payments to developers                                                  |                      | 10,100 |                      |  | 1,300                | 
|Land
        and building annual operating lease commitments            |                      | 86     |                      |  | 518                  | 
|Motor
        vehicles and equipment annual operating lease commitments |                      | 97     |                      |  | 428                  | 
|                                                                        |                      |        |                      |  |                      | 
|Total                                                                   |                      | 10,283 |                      |  | 2,246                | 
|                                                                        |                      |        |                      |  |                      | 



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The Euro

On January 1, 1999, 11 of the 15 European Union member states irrevocably locked their currencies at fixed rates of  exchange and adopted a new currency, the Euro. Effective from that date the Euro became legal currency in those  member states for all financial transactions except for those involving notes or coins. Early in 2002 Euro notes and coins  were introduced to replace the respective local currencies of the participating member states. It is not clear whether or when  the United Kingdom will adopt the Euro, such a change requiring a decision by the U.K.  Government to proceed. The current U.K. Government has stated that it would subsequently  hold a national referendum on the issue of entry into the European Monetary Union.

The financial information systems used in the European offices are all capable of operating in multiple currencies  including the Euro. The costs relating to the introduction of the Euro have been negligible.

To date, the Group has not yet experienced any significant margin erosion due to retail price-points moving to the Euro.  As the introduction of the Euro is still in the initial stages we will continue to monitor the position carefully. Whilst there is  no consistent Pan-European price-point, we are seeing closer parity in pricing in the major markets and where this does  not occur in the 'smaller' markets, product localisation continues to minimise any grey imports.

Research and Development, Patents and Licenses

During the three fiscal years ended March 31, 2000, 2001 and 2002 the Group has invested an aggregate of just over £128  million (including employment costs) on research and development. The investment relates to video compression,  processing and storage technology and developing entertainment software. Such investments were made mainly in the  U.K. and the U.S.A. and consisted mainly of salaries and related employment costs incurred in the development of its  technology and games. See "Item 5 – Operating and Financial Review and Prospects''.

Trend Information

The following trends could have a material
  impact of the Group's net revenues, liquidity and capital resources.

|a) | The market for video games follows a
      cycle that is defined by the introduction of new hardware platform that
      replace older and technically obsolescent platforms. The market for video
      games is widely believed to be in the upswing of its current cycle as all
      of the next generation consoles have now been launched and are gaining varying
      degrees of market acceptance. It is highly likely that this cycle will enter
      its down swing in the next two to three years as the major manufacturers
      of videogame platforms announce and introduce their next generation of hardware.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|b) | The Group may invest in its core business
      of developing and publishing computer and video games through either or
      both of organic growth and acquisition.                                                                                                                                                                                                                                                                                                                                                                                                                                                           



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ITEM 6 – DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors and Executive Officers of the Company

The business address of the directors and executive officers of the Group is Wimbledon Bridge House, 1 Hartfield Road,  Wimbledon, London SW19 3RU.

|Name                              |  | Position/Role                                        
|--------------------------------- |  | -----------------------------------------------------
|                                  |  |                                                      
|Directors
        – Executive     |  |                                                      
|Stuart
        Cruickshank        |  | Group
        Finance (from September 4, 2001)       
|Jeremy
        Heath-Smith        |  | Development                                          
|Ian
        Livingstone           |  | Creative                                             
|Michael
        McGarvey          |  | Chief Executive Officer                              
|Simon
        Protheroe           |  | Technical                                            
|                                  |  |                                                      
|Directors
        – Non-Executive |  |                                                      
|David
        Adams(1)            |  | Non-Executive
        Director (from May 9, 2001)    
|John
        van Kuffeler(2)      |  | Non
        Executive Chairman (from April 18, 2002) 
|Victor
        Steel(1)           |  | Non-Executive
        Director                       
|Allen
        Thomas(1)           |  | Non-Executive
        Director                       
|                                  |  |                                                      
|Other
        Executive Officers  |  |                                                      
|Rolf
        Duhnke               |  | Managing
        Director, Eidos Interactive, Germany
|Robert
        Dyer               |  | President
        of Eidos Interactive, Inc.         
|Erik
        Ford                 |  | General
        Manager, Eidos Interactive, Singapore
|Satoshi
        Honda             |  | Managing
        Director, Eidos Interactive, Japan  
|Jonathan
        Kemp             |  | European
        Managing Director                   
|Patrick
        Melchior          |  | Managing
        Director, Eidos Interactive, France 



---



|(1) | Member of the Audit Committee and the
      Remuneration Committee. There is no arrangement or understanding between
      any director or executive officer and any other person pursuant to which
      he or she was elected as a director or executive officer of the Company.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Member of the Remuneration Committee.                                                                                                                                                                                                                                             
|   

Stuart Cruickshank joined Eidos as Group Finance Director in September 2001 from Kingfisher Plc, where he was the  Finance Director of Woolworths. Prior to joining Kingfisher, Mr. Cruickshank was Corporate Financial Director at United  Biscuits and Finance Director of McVities U.K. and KP Foods. Mr. Cruickshank has also worked at Grand Metropolitan  (Diageo) and Whitbread, where he undertook a wide variety of senior financial roles.

Jeremy Heath-Smithhas served as a
  director of the Company since April 1996. From November 1994 to April 1996,
  Mr. Heath-Smith served as a main Board Director of CentreGold plc in addition
  to his role as Managing Director of U.S. Gold Limited. In July 1988, he founded
  Core Design Limited, an interactive software developer and publisher that was
  acquired by CentreGold plc in 1994, where he continues to serve as Managing
  Director.

Ian Livingstonehas served as Creative Director since April, 2002 and was previously Chairman of the Company's Board of  Directors since October 1995. From May 1994 to October 1995, Mr. Livingstone served as Managing Director of Domark.  Since 1982, he has authored and co-authored the "Fighting Fantasy'' series of interactive game books, which have sold in  excess of 14 million copies worldwide. In 1975, he co-founded Games Workshop Limited, a role-playing game company,  where he served as Joint Managing Director and subsequently Chairman of the Board until 1991. In 2000 he was awarded  an Honorary Doctorate by the University of Abertay Dundee for his services to computer gaming

Michael McGarvey has served as Chief
  Executive Officer since November 1, 2000 and as a director of the Company since
  October 1998. From May 1996 to October 1998, Mr. McGarvey served as Chief Executive
  Officer of Eidos Interactive, Inc., a wholly owned subsidiary of the



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Company. From November 1994 to May 1996, he served as Vice President of Sales and Marketing  of Domark Software, Inc. From February 1994 to November 1994, he served as Director of Sales  of Domark Software, Inc. From May 1990 to February 1994, he served as Director of Sales for  Diceon Electronics, a manufacturer of printed circuit boards.

Simon Protheroehas served as Technical Director of the Company and as a director since June 1994. From July 1993 to  December 1993, Mr. Protheroe served as a consultant to the Group. He has conducted post-graduate studies and  subsequent research in the field of image processing and he has published works in the fields of image sequence  analysis, machine vision and neural networks. He has developed software for the Joint European Torus and the Defence  Research Agency.

David Adams, was appointed to the Board in May 2001 as a Non-Executive Director. He is currently Deputy Chief  Executive and the Finance Director of House of Fraser Plc, a position he has held since 1997. Prior to his House of Fraser  role, Mr. Adams had been Finance Director of Asprey Plc, Finance Director of Texas Homecare and Finance Director of  Dorothy Perkins & Top Shop.

John van Kuffelerhas served as Non-Executive
  Chairman of the Company since April 2002. He is also Chairman of Provident Financial
  PLC; The Fleming Technology Trust PLC; The Finsbury Smaller Quoted Companies
  Trust PLC; and Huveaux PLC. Prior to taking up these appointments he was Chief
  Executive of Provident Financial PLC and Brown Shipley Holdings PLC.

Victor Steelhas served as a Non-Executive
  Director of the Company since September 1998. He is also Chairman of Forbidden
  Technologies plc, Mygard plc and Ideas Hub plc and non executive Deputy Chairman
  of the Navy, Army and Air Force Institutes. Mr. Steel's previous appointments
  were as Chairman of Mansfield Brewery and European Leisure plc and as executive
  Director of Kingfisher Plc, Guinness Plc and Beecham Group Plc. He is a fellow
  of the Institute of Marketing.

Allen Thomas,a lawyer qualified in
  England and America, has served as a Non-Executive Director of the Company since
  September 1998. Mr. Thomas currently also serves as a non-executive director
  of Marconi plc, Highway Insurance Holdings plc and Penna Consulting Plc. Mr.
  Thomas was a partner at the international law firm Paul, Weiss, Rifkind, Wharton
  & Garrison from 1973 to 1992, and was the founding partner of the firm's
  Hong Kong office.

Rolf Duhnkehas served as Managing Director of Eidos Interactive (Deutschland) GmbH, a wholly owned subsidiary, of  the Company since March 1995. From 1988 to 1995 Mr. Duhnke served as Logistics Director of Sega, Germany. Prior to  that he served as a Label Manager of Bertelsmann-Daughter Ariolasoft.

Robert Dyerhas served as President of Eidos Interactive, Inc., a wholly owned subsidiary of the Company, since  November 1998. From February 1994 to October 1998, Mr. Dyer worked at Crystal Dynamics, Inc. and in his most recent  position, was President. Prior to joining Crystal Dynamics, Mr. Dyer worked for Disney Home Video International as  Director of Sales and Business Development from December 1991 through January 1994.

Erik Fordhas served as General Manager of Eidos Interactive PTE Limited (Singapore), a wholly owned subsidiary of the  Company, since November 1998. Mr. Ford helped established this office to oversee sales and marketing in the Asia Pacific  region. From March 1996 to October 1998, Mr. Ford served as the Sales and Marketing Manager for Virgin Interactive  Entertainment (Asia Pacific).

Satoshi Hondahas served as Managing Director of Eidos Interactive KK (Japan), a wholly owned subsidiary of the  Company, since June 1998. From 1992 to April 1998, he served as President and



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Chief Executive Officer of Electronic Arts, Japan. From 1982 to 1992, he served in various senior  positions for Victor Entertainment Inc. and Victor Musical Industries Inc.

Jonathan Kemphas served as European Managing Director of the Company since November 2000 and as Managing  Director of Eidos Interactive Limited, a wholly owned subsidiary of the Company since November 1998. From October  1997 to November 1998, Mr. Kemp served as Sales Director of Eidos Interactive Limited. From March 1994 to October  1998, Mr. Kemp served as Director of Sales of Microprose Software Limited.

Patrick Melchiorhas served as Managing Director of Eidos Interactive France SARL, a wholly owned subsidiary of the  Company, since October 1996. From January 1995 to September 1996, Mr. Melchior served as European Sales and  Marketing Director of EMME. From September 1993 to December 1994, Mr. Melchior served as Sales Director at EURO-  CD. From January 1991 to August 1993, Mr. Melchior was General Manager, Microprose, France. Prior to that he spent six  years in the food industry in the U.S.

Compensation Paid to Directors

The amounts paid to Directors during fiscal 2002 was as follows:

|                                      | Salary and Fees |           | Bonus |  | Royalty |  | Benefits |           | Pension contributions |  | Total   |  | 12 months ended March 31, 2001 |        
|------------------------------------- | --------------- | --------- | ----- |  | ------- |  | -------- | --------- | --------------------- |  | ------- |  | ------------------------------ | -------
|                                      |                 |           |       |  |         |  |          |           |                       |  |         |  |                                |        
|                                      | £               |           | £     |  | £       |  | £        |           | £                     |  | £       |  | £                              |        
|Current Serving Executives            |                 |           |       |  |         |  |          |           |                       |  |         |  |                                |        
|Mr. Cruickshank (from September 2001) |                 | 110,833   |       |  | —       |  |          | —         |                       |  | 11,464  |  |                                | 13,300 
|Mr. Heath-Smith                       |                 | 250,000   |       |  | —       |  |          | 143,000   |                       |  | 102,122 |  |                                | 30,000 
|Mr. Livingstone                       |                 | 240,000   |       |  | 500     |  |          | —         |                       |  | 34,191  |  |                                | 28,800 
|Mr. McGarvey                          |                 | 270,000   |       |  | 500     |  |          | —         |                       |  | 97,444  |  |                                | 16,695 
|Mr. Protheroe                         |                 | 75,000    |       |  | 500     |  |          | —         |                       |  | 16,687  |  |                                | 9,000  
|Non-Executive                         |                 |           |       |  |         |  |          |           |                       |  |         |  |                                |        
|Mr. Adams (from May 2001)             |                 | 22,468    |       |  | —       |  |          | —         |                       |  | —       |  |                                | —      
|Mr. Steel                             |                 | 40,000    |       |  | —       |  |          | —         |                       |  | —       |  |                                | —      
|Mr. Thomas                            |                 | 51,992    |       |  | —       |  |          | —         |                       |  | —       |  |                                | —      
|Previously serving executives         |                 | —         |       |  | —       |  |          | —         |                       |  | —       |  |                                | —      
|                                      |                 |           |       |  |         |  |          |           |                       |  |         |  |                                |        
|Total                                 |                 | 1,060,293 |       |  | 1,500   |  |          | 143,000   |                       |  | 261,908 |  |                                | 97,795 
|                                      |                 |           |       |  |         |  |          |           |                       |  |         |  |                                |        
|2001 Total                            |                 | 1,504,609 |       |  | —       |  |          | 2,989,325 |                       |  | 268,872 |  |                                | 128,950

All the staff in the Group's publishing division with at least six months continuous service were paid a £500 bonus during  the period in acknowledgment of their on going commitment to the business in the face of a Group-wide pay freeze and  continued difficult trading conditions.

Benefits paid to Mr. McGarvey and Mr. Heath-Smith include £63,908 and £75,042 respectively for housing allowances,  which in respect of Mr. Heath-Smith has been terminated with effect from 2 September 2002.



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Employment Contracts of Currently Serving Directors and Executive Officers

Mr. Cruickshank and the Company are parties to a Service Agreement pursuant to which Mr. Cruickshank serves as  Finance Director. The initial salary paid under the agreement is £190,000, reviewable from time to time. Either party may  terminate the agreement with six months' notice. Mr. Cruickshank is also entitled to bonuses as determined by the Board  of Directors of the Company, however in the year ended March 31, 2002, no bonus was paid.

Mr. Heath-Smith and Core Design Limited are
  parties to a Service Agreement. The initial salary payable under the agreement
  was £150,000 per year, reviewable from time to time. Mr. Heath-Smith's
  salary was subsequently increased by the Board of Directors to £250,000
  per year. Either party may terminate the agreement with six months' notice.
  Mr. Heath-Smith is also entitled to bonuses as determined by the Board of Directors
  of the Company, however in the year ended March 31, 2002 no bonus was paid.
  Mr. Heath-Smith is also entitled to a royalty based upon the underlying profitability
  of Core Design Limited, the internal development studio responsible for Tomb
  Raider and many of the Group's games. In the year ended March 31, 2002, he earned
  a royalty of £143,000.

Mr. Livingstone stepped down as Chairman of the Board in April 2002 and became Creative Director. He has a Service  Agreement with the Company. His initial salary was £70,000 per year, reviewable from time to time. Mr. Livingstone's  currently salary is £240,000 per year. Either party may terminate the agreement with six months' notice. Mr. Livingstone is  also entitled to bonuses as determined by the Board of Directors of the Company and in the year ended March 31, 2002, a  £500 bonus was paid.

Mr. McGarvey and the Company are parties to a Service Agreement pursuant to which Mr. McGarvey serves as Chief  Executive Officer. The initial salary payable under the Agreement was £150,000 per year, reviewable from time to time.  Mr. McGarvey's salary was subsequently increased by the Board of Directors to £348,190 per year. Either party may  terminate the agreement with twelve months' notice. Mr. McGarvey is also entitled to bonuses as determined by the  Board of Directors of the Company and in the year ended March 31, 2002, a £500 bonus was paid.

Mr. Protheroe and the Company are parties to a Service Agreement pursuant to which Mr. Protheroe serves as Technical  Director. The initial salary payable under the Agreement was £30,000 per year, reviewable from time to time. Mr.  Protheroe's salary was subsequently increased by the Board of Directors to £82,500 per year. Either party may terminate  the agreement with six months' notice. Mr. Protheroe is also entitled to bonuses as determined by the Board of Directors  of the Company and in the year ended March 31, 2002, a £500 bonus was paid.

Mr. Duhnke and Eidos Interactive Limited are parties to a Service Agreement pursuant to which Mr. Duhnke serves as  Managing Director of Eidos Interactive (Deutschland) GmbH. The initial salary payable was DM160,000 per year,  reviewable from time to time. Mr. Duhnke's salary was subsequently increased by the Board of Directors to Euro 205,361.  Either party may terminate the agreement with six months' notice. Mr. Duhnke is also entitled to bonuses as determined  by the Board of Directors of the Company and in the year ended March 31, 2002, a £500 bonus was paid.

Mr. Dyer serves as President of Eidos Interactive, Inc. The initial salary payable was agreed at $180,000 per year,  reviewable from time to time. Mr. Dyer's salary was subsequently increased to $260,000. Mr. Dyer is also entitled to  bonuses as determined by the Board of Directors of the Company and in the year ended March 31, 2002, a £500 bonus  was paid.

Mr. Ford and Eidos Interactive Limited are parties to a Service Agreement pursuant to which Mr. Ford serves as General  Manager of Eidos Interactive Pte Limited (Singapore). The initial salary payable was U.S.$57,035 per year, reviewable  from time to time. Mr. Ford's salary was subsequently increased by the Board of Directors to Sing $141,115. Either party may terminate



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the agreement with three months' notice. Mr. Ford is also entitled to bonuses as determined by  the Board of Directors of the Company and in the year ended March 31, 2002, a £500 bonus was  paid.

Satoshi Honda and Eidos Interactive Limited are parties to a Service Agreement pursuant to which he serves as Managing  Director of Eidos Interactive KK. The initial salary payable is Yen 28,000,000 per year, reviewable from time to time. Either  party may terminate the agreement with six months' notice. Satoshi Honda is also entitled to bonuses as determined by  the Board of Directors of the Company and in the year ended March 31, 2002, a £500 bonus was paid.

Mr. Kemp and Eidos Interactive Limited are parties to a Service Agreement pursuant to which Mr. Kemp serves as  European Managing Director. The initial salary payable under the agreement is £175,000 per year, reviewable annually.  Either party may terminate the agreement with six months' notice. Mr. Kemp is also entitled to other bonuses as  determined by the Board of Directors of the Company and in the year ended March 31, 2002, a £500 bonus was paid.

Mr. Melchior and Eidos Interactive Limited are parties to a Service Agreement pursuant to which Mr. Melchior serves as  Managing Director of Eidos Interactive France SARL. The initial salary payable was FF 600,000 per year, reviewable from  time to time. Mr. Melchior's salary was subsequently increased by the Board of Directors to Euro 205,361. Either party  may terminate the agreement with six months' notice. Mr. Melchior is also entitled to bonuses as determined by the  Board of Directors of the Company and in the year ended March 31, 2002, a £500 bonus was paid.

As is stated in the above descriptions of employment contracts, bonuses are being paid entirely at the discretion of the  Board of Directors of the Company. Executive Directors' and Officers' remuneration and bonuses are based on  recommendations made by the Remuneration Committee.

Board Practices

The Audit Committee

This committee currently comprises Mr. Steel
  (Chairman), Mr. Thomas and Mr. Adams. The Company believes all members of the
  Audit Committee are "independent'' within the meaning of the Sarbanes-Oxley
  Act of 2002 and the rules of the Nasdaq stock market. The Committee meets no
  less than three times a year with the external auditors together with various
  representatives of the executive, finance and internal audit functions in attendance.
  It also meets with the external auditors in private after each meeting.

The Committee reviews the interim and full-year
  results before presentation to the Board, the findings of the internal and external
  auditors and the Group's internal control systems and financial accounting procedures
  and policies. It also advises the Board on the appointment of external auditors
  and on the scope, results and cost effectiveness of both the audit and non-audit
  work.

The Remuneration Committee

This committee currently comprises Mr. Thomas
  (Chairman), Mr. Steel, Mr. van Kuffeler and Mr. Adams. It is responsible for
  the remuneration of the Executive Directors and Officers and advises the Board
  on the broad framework for executive remuneration and determines, on behalf
  of the Board, the remuneration packages of individual Directors and senior management.
  In setting the policy, the Committee considers a number of factors including:

|(a) | the basic salaries and benefits available to Executive Directors and Officers at comparable companies;
|--- | ------------------------------------------------------------------------------------------------------
|   

|(b) | the need to attract and retain Directors of an appropriate calibre; and
|--- | -----------------------------------------------------------------------
|   



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|(c) | the need to ensure Executive Directors commitment to the continued success of the company by means of incentive schemes.
|--- | ------------------------------------------------------------------------------------------------------------------------
|   

The Committee meets on an ad hoc basis and has also received independent advice from external remuneration  consultants.

Employee Information

The average weekly number of persons (including Executive Directors) employed by the Group during the year was:

|                                              | Year ended March 31, |    
|--------------------------------------------- | -------------------- | ---
|                                              | 2000                 |    
|Corporate                                     |                      | 26 
|Computer entertainment software               |                      | 485
|Video editing, post productions and new media |                      | 72 
|                                              |                      |    
|Total                                         |                      | 583
|                                              |                      |    

Computer entertainment software staff can be further analyzed as follows:

|                         | Year ended March 31, 2000 |    
|------------------------ | ------------------------- | ---
|                         | U.K.                      |    
|Sales and Marketing      |                           | 69 
|Research and development |                           | 132
|Administration           |                           | 14 
|                         |                           |    
|Total                    |                           | 215
|                         |                           |    

|                                 |                                 |    
|-------------------------------- | ------------------------------- | ---
|                                 | Year
      ended March 31, 2001 |    
|                                 | U.K.                            |    
|Sales
        and Marketing      |                                 | 58 
|Research
        and development |                                 | 127
|Administration                   |                                 | 14 
|                                 |                                 |    
|Total                            |                                 | 199
|                                 |                                 |    

|                                 |                                 |    
|-------------------------------- | ------------------------------- | ---
|                                 | Year
      ended March 31, 2002 |    
|                                 | U.K.                            |    
|Sales
        and Marketing      |                                 | 49 
|Research
        and development |                                 | 127
|Administration                   |                                 | 12 
|                                 |                                 |    
|Total                            |                                 | 188
|                                 |                                 |    

Relationship between management and unions

There are no relationships between labor unions and any company within the Group.

Temporary employees

Within the Group, during fiscal 2002 there were on average 34 non-permanent employees every month.



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Share Ownership – Directors and Executive Officers

Interest in Shares

The interests of the current Directors and Executive Officers in the shares of the company as at August 31, 2002 were as  follows.

|                                           |  | Number of shares as at August 31, 2002 |  |  | % ownership | 
|------------------------------------------ |  | -------------------------------------- |  |  | ----------- | 
|I Livingstone                              |  | 2,942,612                              |  |  | 2.1         | 
|J Heath-Smith                              |  | 1,010,065                              |  |  | 0.7         | 
|M McGarvey                                 |  | 64,913                                 |  |  | —           | 
|J Kemp                                     |  | 20,087                                 |  |  | —           | 
|S Cruickshank                              |  | 9,074                                  |  |  | —           | 
|Remaining Directors and Executive Officers |  | Nil                                    |  |  | —           | 
|                                           |  |                                        |  | 
|Total of Directors and Executive Officers  |  | 4,046,751                              |  |  | 2.8         | 
|                                           |  |                                        |  | 

In total, this shareholding represents 2.8%
  of the issued share capital of the Company.



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Interests in Share Options

As of August 31, 2002, options for Ordinary Shares had been granted to the following Directors and Executive Officers of  the Company pursuant to the Group's share option schemes:

|Name                             | Options
      
      Outstanding |           | Option
      Exercise Period |  | Exercise
      Price
      per Ordinary 
      Share | 
|-------------------------------- | -------------------------------- | --------- | ---------------------------- |  | ---------------------------------------------------- | 
|                                 |                                  |           |                              |  |                                                      | 
|Approved
        Scheme          |                                  |           |                              |  |                                                      | 
|S
        Cruickshank            |                                  | 11,764    |                              |  | 09/05/04 to
      09/05/11                           | 
|J
        Heath-Smith            |                                  | 21,267    |                              |  | 04/25/99 to
      04/24/06                           | 
|J
        Kemp                   |                                  | 9,110     |                              |  | 05/29/02 to
      05/28/09                           | 
|I
        Livingstone            |                                  | 21,050    |                              |  | 04/03/99 to
      04/01/06                           | 
|S
        Protheroe              |                                  | 55,586    |                              |  | 07/21/97 to
      07/19/04                           | 
|                                 |                                  | 111,172   |                              |  | 03/11/98 to
      03/09/05                           | 
|                                 |                                  |           |                              |  |                                                      | 
|Unapproved
        Scheme        |                                  |           |                              |  |                                                      | 
|S
        Cruickshank            |                                  | 88,236    |                              |  | 09/05/04 to
      09/05/08                           | 
|R
        Duhnke                 |                                  | 138,965   |                              |  | 09/11/01 to
      09/10/05                           | 
|                                 |                                  | 27,793    |                              |  | 04/11/03 to
      04/10/07                           | 
|E
        Ford                   |                                  | 16,675    |                              |  | 04/11/03 to
      04/10/07                           | 
|J
        Heath-Smith            |                                  | 201,077   |                              |  | 04/25/99 to
      04/24/03                           | 
|S
        Honda                  |                                  | 111,172   |                              |  | 04/11/03 to
      04/10/07                           | 
|J
        Kemp                   |                                  | 129,855   |                              |  | 05/29/02 to
      05/28/06                           | 
|                                 |                                  | 44,469    |                              |  | 04/11/03 to
      04/10/07                           | 
|I
        Livingstone            |                                  | 245,763   |                              |  | 04/03/99 to
      04/01/03                           | 
|M
        McGarvey               |                                  | 1,111,725 |                              |  | 10/14/01 to
      10/13/05                           | 
|                                 |                                  | 139,543   |                              |  | 10/16/00 to
      10/14/04                           | 
|P
        Melchior               |                                  | 138,965   |                              |  | 09/11/01 to
      09/10/05                           | 
|                                 |                                  | 27,793    |                              |  | 04/11/03 to
      04/10/07                           | 
|                                 |                                  | 5,558     |                              |  | 01/21/00 to
      01/19/04                           | 
|S
        Protheroe              |                                  | 77,820    |                              |  | 04/03/99 to
      04/01/03                           | 
|                                 |                                  |           |                              |  |                                                      | 
|U.S.
        Stock Option Scheme |                                  |           |                              |  |                                                      | 
|R
        Dyer                   |                                  | 111,172   |                              |  | 05/29/02 to
      05/28/06                           | 
|                                 |                                  | 55,585    |                              |  | 04/11/03 to
      04/10/07                           | 
|                                 |                                  |           |                              |  |                                                      | 
|Total                            |                                  | 2,902,115 |                              |  |                                                      | 
|                                 |                                  |           |                              |  |                                                      | 

|                                                        | Number |           | Maturity
      Date |  | Exercise
      Price | 
|------------------------------------------------------- | ------ | --------- | ------------------- |  | -------------------- | 
|Sharesave
        Scheme                                |        |           |                     |  |                      | 
|S
        Cruickshank                                   |        | 8,119     |                     |  | 04/01/05             | 
|R
        Duhnke                                        |        | 3,564     |                     |  | 04/01/05             | 
|E
        Ford                                          |        | 3,618     |                     |  | 06/01/03             | 
|J
        Heath-Smith                                   |        | 8,119     |                     |  | 04/01/05             | 
|S
        Honda                                         |        | 7,692     |                     |  | 02/01/05             | 
|J
        Kemp                                          |        | 8,119     |                     |  | 04/01/05             | 
|P
        Melchior                                      |        | 5,619     |                     |  | 02/01/06             | 
|                                                        |        |           |                     |  |                      | 
|Total                                                   |        | 44,850    |                     |  |                      | 
|                                                        |        |           |                     |  |                      | 
|                                                        |        |           |                     |  |                      | 
|                                                        |        |           |                     |  |                      | 
|All
        directors and executive officers as a group |        | 2,946,965 |                     |  |                      | 
|                                                        |        |           |                     |  |                      | 

Eidos Interactive Options

Ian Livingstone (the ''Optionholder''), Chairman
  of the Board of the Company, holds an option to purchase 3,636 Eidos Interactive
  Limited (formerly Domark Group Limited) Ordinary Shares (the ''Option'') at
  £105.03 per share. The Company may require the Optionholder to sell, and
  he may require the Company to purchase, the Eidos Interactive Ordinary Shares
  at a rate of 86.5 Ordinary Shares for each Eidos Interactive ordinary share.
  Effectively, the Option gives the Optionholder



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the right to purchase 314,485 Ordinary Shares
at a price of £1.21 per Ordinary Share. The exercise period of the Option
is at the discretion of the Board of Directors.

The Option is freely assignable and carries no rights on the liquidation of Eidos Interactive. Upon a variation of the issued  share capital of Eidos Interactive the number of Eidos Interactive Ordinary Shares subject to the Option and/or the  subscription price shall be adjusted in such manner as shall place the Optionholder in the same position as regards the  percentage of the issued share capital of Eidos Interactive which he shall be entitled to acquire upon full exercise of his  Option. Upon an offer or invitation (whether by rights issue or otherwise) to holders of Ordinary Shares, the Company  shall procure that at the same time the same offer or invitation is made to the Optionholder as if his Option had been  exercised, provided that the Optionholder may elect to have the number of Ordinary Shares subject to the Option and/or  the subscription price adjusted in such manner as the auditors of the Company shall determine.

Employee share ownership

The Company operates an Inland Revenue approved SAYE Share Scheme for its U.K. employees and similar schemes are  in place for employees in France, Germany, Japan and Singapore with an equivalent stock purchase scheme existing for  U.S. employees. These schemes are detailed in Item 8, Note 21.



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ITEM 7 – MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Major Shareholders

As at August 31, 2002, the Company was not aware of any person or persons holding more than 3% of the Companies  Share capital in aggregate.

So far as the Group is aware it is not directly or indirectly owned or controlled by another corporation(s) or by any foreign  government nor are there any arrangements which may at a subsequent date result in a change of control of the Group.

Related Party Transactions

In relation to material transactions, the Group has not identified any parties who are able to negotiate more favorable  terms than would have been available to any other independent party on an arms length basis.

Fiscal 2002

|(a) | During the year the Group paid £6.1 million (2001: £7.1 million) to its associated companies as royalties and for development of games for the Group.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|   

|(b) | In July 1999 the Group acquired a 75% stake in Proein SL. In the year ended March 31, 2002 the Group sold games to Proein SL for a total of £1.1 million (2001: £1.2 million) after provisions. These games were all sold on an arm's length basis. In addition in the same period the Group paid £3.7 million (2001: £1.0 million) to Pyro Studios SL (in which the Group acquired a 25% stake) as royalties and for the development of games for the Group. At March 31, 2002 the Group was owed £105,000 (2001: £159,000) by Proein SL (via a third party distributor) and owed Pyro Studios SL £51,000 (2001: £139,000).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

|(c) | In June 2001 Eidos took its stake in Ion Storm to 89% (see Section 8, note 31). In the year ended March 31, 2002 the Group paid £6.1 million to Ion Storm for the development of games for the Group. At March 31, 2002 Ion Storm owed Eidos £4.0 million.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

Fiscal 2001

|(a) | During the year the Group paid £7.1 million (2000: £6.1 million) to its associated companies as royalties and for development of games for the Group.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|   

|(b) | In July 1999 the Group acquired a 75% stake in Proein SL. In the year ended March 31, 2001 the Group sold games to Proein SL for a total of £1.2 million (2000: £3.9 million) after provisions. These games were all sold on an arm's length basis. In addition in the same period the Group paid £1.0 million (2000: £0.8 million) to Pyro Studios SL (in which the Group acquired a 25% stake) as royalties and for the development of games for the Group. At March 31, 2001 the Group was owed £159,000 (2000: £1.7 million) by Proein SL (via a third party distributor) and owed Pyro Studios SL £139,000 (2000: £326,000).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

|(c) | On December 15, 2000, the business and assets of Glassworks Productions Ltd, a subsidiary undertaking of the Group, were sold to Glassworks Post Productions Ltd, a subsidiary of Das Werks AG, for £700,000. Hector Macleod, a Director of Glassworks Productions Ltd, is also a Director and minority shareholder of Glassworks Post Productions Ltd. On December 21, 2000 Glassworks Productions Ltd changed its name to Eidos Post Productions Ltd.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

As reported in fiscal 2000

|(a) | Jeremy Heath-Smith, a director and executive officer of the Group, is a member of the Core Design Pension Fund. The Fund's assets include sole ownership of the premises occupied during part of the year by Core Design Limited. The rent paid by Core Design Limited to the pension fund is £40,000 per annum.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   





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|(b) | The Group paid £1.0 million to Eidopt AS (50% holding) to fund its research into a games storage device.
|--- | --------------------------------------------------------------------------------------------------------
|   

|(c) | Eidos Technologies Limited has granted a license of certain of its video compression intellectual property to Forbidden Technologies plc. In return, the Group will receive a royalty stream on Forbidden Technologies' products, which incorporate the technology licensed. Mr. Streater, a former executive director of Eidos plc, and Mr. Steel, a current non-executive director of Eidos plc, are both directors of Forbidden Technologies plc. Mr. Streater left the Group to found Forbidden Technologies plc and therefore was no longer involved with the Group when the license was granted. Mr. Steel took no part in the discussions on either side.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   



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ITEM 8 – FINANCIAL INFORMATION

Consolidated Statements and Other Financial Information

INDEPENDENT AUDITORS' REPORT
  The Board of Directors and Stockholders

Eidos plc

We have audited the accompanying consolidated balance sheets of Eidos plc and subsidiaries as of March 31, 2002 and  2001, and the related consolidated statements of operations, statements of total recognized gains and losses, and  changes in shareholders' equity and cash flows for each of the years in the three-year period ended March 31, 2002. These  consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express  an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United Kingdom and United  States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about  whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence  supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting  principles used and significant estimates made by management, as well as evaluating the overall financial statement  presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial  position of Eidos plc and subsidiaries as of March 31, 2002 and 2001, and the results of their operations and their cash  flows for each of the years in the three-year period ended March 31, 2002, in conformity with generally accepted  accounting principles in the United Kingdom.

Accounting principles generally accepted in the United Kingdom vary in certain significant respects from accounting  principles generally accepted in the United States. Application of accounting principles generally accepted in the United  States would have affected results of operations for each of the years in the three-year period ended March 31, 2002 and  shareholders' equity as of March 31, 2002 and 2001, to the extent summarized in Note 32 to the consolidated financial  statements.

London, England

KPMG Audit Plc  May 15, 2002

Chartered Accountants and Registered Auditor



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EIDOS PLC AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS

|                                                        | Notes |    | March 31, 2001 |       | March 31, 2002 |      
|------------------------------------------------------- | ----- | -- | -------------- | ----- | -------------- | -----
|                                                        |       |    |                |       |                |      
|                                                        |       |    |                | £'000 |                | £'000
|Fixed assets                                            |       |    |                |       |                |      
|Goodwill                                                |       | 11 |                |       |                |      
|Tangible assets                                         |       | 12 |                |       |                |      
|Investments                                             |       |    |                |       |                |      
|Joint ventures                                          |       |    |                |       |                |      
|Share
        of gross assets                           |       |    |                |       | 4,178          |      
|Share
        of gross liabilities                      |       |    |                |       | (1,743         | )    
|                                                        |       |    |                |       |                |      
|                                                        |       | 13 |                |       |                |      
|Joint venture goodwill                                  |       | 11 |                |       |                |      
|Other investments                                       |       | 13 |                |       |                |      
|                                                        |       |    |                |       |                |      
|Total investments                                       |       |    |                |       |                |      
|                                                        |       |    |                |       |                |      
|Total fixed assets                                      |       |    |                |       |                |      
|                                                        |       |    |                |       |                |      
|Current assets                                          |       |    |                |       |                |      
|Stocks                                                  |       | 14 |                |       |                |      
|Debtors, net of allowance for doubtful accounts         |       | 15 |                |       |                |      
|Cash at bank and in hand                                |       |    |                |       |                |      
|                                                        |       |    |                |       |                |      
|                                                        |       |    |                |       |                |      
|Creditors: amounts falling due within one year          |       | 16 |                |       |                |      
|                                                        |       |    |                |       |                |      
|Net current assets                                      |       |    |                |       |                |      
|                                                        |       |    |                |       |                |      
|Total assets less current liabilities                   |       |    |                |       |                |      
|Creditors: amounts falling due after more than one year |       | 17 |                |       |                |      
|Provisions for liabilities and charges                  |       | 18 |                |       |                |      
|                                                        |       |    |                |       |                |      
|Net assets                                              |       |    |                |       |                |      
|                                                        |       |    |                |       |                |      
|Capital and reserves                                    |       |    |                |       |                |      
|Called up share capital                                 |       | 20 |                |       |                |      
|Share premium account                                   |       | 22 |                |       |                |      
|Other reserves                                          |       | 22 |                |       |                |      
|Profit and loss account                                 |       | 22 |                |       |                |      
|                                                        |       |    |                |       |                |      
|Equity shareholders' funds                              |       | 22 |                |       |                |      
|                                                        |       |    |                |       |                |      

The accompanying notes are
  an integral part of these consolidated financial statements.



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EIDOS PLC AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                                                      |       |    |  | Year
      ended 
      March 31,2000 |         | Year
      
      ended 
      March 31,2001Before
      exceptional
      items |  | Year
      
      ended 
      March 31,2001
      Exceptional
      items
      (see note 8) |   | Year
      ended 
      March 31,2001Total |         | Year
      
      ended 
      March 31,2002 | 
|------------------------------------------------------------------------------------- | ----- | -- |  | ------------------------------------- | ------- | -------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------- | - | ------------------------------------------ | ------- | -------------------------------------------- | 
|                                                                                      |       |    |  |                                       |         |                                                                                  |  |                                                                                              
|                                                                                      | Notes |    |  |                                       |         |                                                                                  | 
|                                                                                      |       |    |  |                                       |         |                                                                                  |  |                                                                                               |   |                                            |         |                                             
|                                                                                      |       |    |  | £'000                                 |         | £'000                                                                            |  | £'000                                                                                         |   | £'000                                      |         | £'000                                        | 
|Turnover:
        Group (including share of joint ventures)                           |       |    |  |                                       | 203,265 |                                                                                  |  | 173,528                                                                                       |   |                                            | (16,900 | )                                            | 
|Less:
        share of turnover of joint ventures                                     |       |    |  |                                       | (8,464  | )                                                                                |  | (9,374                                                                                        | ) |                                            | —       |                                              | 
|                                                                                      |       |    |  |                                       |         |                                                                                  |  |                                                                                               |   |                                            |         |                                              | 
|Turnover                                                                              |       | 3  |  |                                       | 194,801 |                                                                                  |  | 164,154                                                                                       |   |                                            | (16,900 | )                                            | 
|Cost
        of sales                                                                 |       |    |  |                                       | (87,908 | )                                                                                |  | (81,722                                                                                       | ) |                                            | —       |                                              | 
|                                                                                      |       |    |  |                                       |         |                                                                                  |  |                                                                                               |   |                                            |         |                                              | 
|Gross
        profit /(loss)                                                          |       |    |  |                                       | 106,893 |                                                                                  |  | 82,432                                                                                        |   |                                            | (16,900 | )                                            | 
|                                                                                      |       |    |  |                                       |         |                                                                                  |  |                                                                                               |   |                                            |         |                                              | 
|Selling
        and marketing                                                         |       |    |  |                                       | (45,307 | )                                                                                |  | (41,530                                                                                       | ) |                                            | —       |                                              | 
|Research
        and development                                                      |       |    |  |                                       | (46,270 | )                                                                                |  | (42,541                                                                                       | ) |                                            | —       |                                              | 
|General
        and administrative                                                    |       |    |  |                                       |         |                                                                                  |  |                                                                                               |   |                                            |         |                                              | 
|Goodwill
        amortization                                                         |       |    |  |                                       | (9,973  | )                                                                                |  | (10,915                                                                                       | ) |                                            | —       |                                              | 
|Other
        general and administrative                                              |       |    |  |                                       | (29,231 | )                                                                                |  | (22,581                                                                                       | ) |                                            | (938    | )                                            | 
|                                                                                      |       |    |  |                                       |         |                                                                                  |  |                                                                                               |   |                                            |         |                                              | 
|Group
        operating (loss)                                                        |       |    |  |                                       | (23,888 | )                                                                                |  | (35,135                                                                                       | ) |                                            | (17,838 | )                                            | 
|Share
        of operating profit of joint ventures                                   |       |    |  |                                       | 532     |                                                                                  |  | 876                                                                                           |   |                                            | —       |                                              | 
|Joint
        venture goodwill amortization                                           |       |    |  |                                       | (3,475  | )                                                                                |  | (5,192                                                                                        | ) |                                            | —       |                                              | 
|                                                                                      |       |    |  |                                       |         |                                                                                  |  |                                                                                               |   |                                            |         |                                              | 
|Loss
        from operations                                                          |       |    |  |                                       | (26,831 | )                                                                                |  | (39,451                                                                                       | ) |                                            | (17,838 | )                                            | 
|Exceptional
        income/(loss) on sale of investments or termination of operations |       | 8  |  |                                       | 80,236  |                                                                                  |  | —                                                                                             |   |                                            | (36,308 | )                                            | 
|Income
        from investments                                                       |       |    |  |                                       | —       |                                                                                  |  | 136                                                                                           |   |                                            | —       |                                              | 
|Net
        interest (expense)/income                                                 |       | 6  |  |                                       | (4,130  | )                                                                                |  | (2,897                                                                                        | ) |                                            | —       |                                              | 
|                                                                                      |       |    |  |                                       |         |                                                                                  |  |                                                                                               |   |                                            |         |                                              | 
|Income/(loss)
        before tax                                                      |       | 7  |  |                                       | 49,275  |                                                                                  |  | (42,212                                                                                       | ) |                                            | (54,146 | )                                            | 
|Income
        tax expense                                                            |       | 9  |  |                                       | (24,072 | )                                                                                |  | (971                                                                                          | ) |                                            | —       |                                              | 
|                                                                                      |       |    |  |                                       |         |                                                                                  |  |                                                                                               |   |                                            |         |                                              | 
|Net
        income/(loss)                                                             |       |    |  |                                       | 25,203  |                                                                                  |  | (43,183                                                                                       | ) |                                            | (54,146 | )                                            | 
|                                                                                      |       |    |  |                                       |         |                                                                                  |  |                                                                                               |   |                                            |         |                                              | 
|Earnings/(loss)
        per share(1)                                                  |       | 10 |  |                                       | 23.3p   |                                                                                  |  | (37.5)p                                                                                       |   |                                            | (47.0)p |                                              | 
|Diluted
        earnings/(loss) per share(1)                                          |       | 10 |  |                                       | 21.4p   |                                                                                  |  | (37.5)p                                                                                       |   |                                            | (47.0)p |                                              | 

|   
|---
|(1)

The accompanying notes are
  an integral part of these consolidated financial statements.



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EIDOS PLC AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF TOTAL RECOGNISED GAINS AND LOSSES

|                                                                          | Year
      ended 
      March 31, 2000 |        | Year
      ended
      March, 31 2001 |  | Year
      ended 
      March, 31 2002 |  
|------------------------------------------------------------------------- | -------------------------------------- | ------ | ------------------------------------- |  | -------------------------------------- | -
|                                                                          |                                        |        |                                       |  |                                        |  
|                                                                          | £'000                                  |        | £'000                                 |  | £'000                                  |  
|Net income/(loss) for the period                                          |                                        | 25,203 |                                       |  | (97,329                                | )
|Consolidation translation differences on foreign currency net investments |                                        | (1,034 | )                                     |  | 256                                    |  
|                                                                          |                                        |        |                                       |  |                                        |  
|Total recognized gains/(losses) relating to the period                    |                                        | 24,169 |                                       |  | (97,073                                | )
|                                                                          |                                        |        |                                       |  |                                        |  

The accompanying notes are
  an integral part of these consolidated financial statements.



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EIDOS PLC AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY:

|                                                                                       | Ordinary
      2p shares |             | Additionalpaid upcapital |               |       |       |  | Profitand lossaccount |  |       |     |      
|-------------------------------------------------------------------------------------- | ------------------------ | ----------- | ------------------------ | ------------- | ----- | ----- |  | --------------------- |  | ----- | --- | -----
|                                                                                       |                          |             |                          | OtherReserves |       |       |  |                       | 
|                                                                                       | Shares
      (#)         |             | Amount                   |               |       |       |  | Total                 | 
|                                                                                       |                          |             |                          |               |       |       |  |                       |  |       |     |      
|                                                                                       |                          |             |                          | £'000         |       | £'000 |  | £'000                 |  | £'000 |     | £'000
|Balances
        as of
        March 31, 1999                                          |                          | 86,411,400  |                          |               | 1,728 |       |  | 50,165                |  |       | 707 |      
|Profit
        for the year                                                            |                          | —           |                          |               | —     |       |  | —                     |  |       | —   |      
|Exchange
        differences                                                           |                          | —           |                          |               | —     |       |  | —                     |  |       | —   |      
|Arising
        on conversion of the bond                                              |                          | 14,272,015  |                          |               | 286   |       |  | 30,962                |  |       | —   |      
|Exercise
        of warrants and options                                               |                          | 2,843,025   |                          |               | 57    |       |  | 3,907                 |  |       | —   |      
|Goodwill
        written off on associates                                             |                          | —           |                          |               | —     |       |  | —                     |  |       | —   |      
|                                                                                       |                          |             |                          |               |       |       |  |                       |  |       |     |      
|Balances
        as of
        March 31, 2000                                          |                          | 103,526,440 |                          |               | 2,071 |       |  | 85,034                |  |       | 707 |      
|Loss
        for the year                                                              |                          | —           |                          |               | —     |       |  | —                     |  |       | —   |      
|Exchange
        differences                                                           |                          | —           |                          |               | —     |       |  | —                     |  |       | —   |      
|Exercise
        of warrants and options                                               |                          | 405,030     |                          |               | 8     |       |  | 788                   |  |       | —   |      
|Goodwill
        relating to the disposal of investment                                |                          | —           |                          |               | —     |       |  | —                     |  |       | —   |      
|                                                                                       |                          |             |                          |               |       |       |  |                       |  |       |     |      
|Balances
        as of
        March 31, 2001                                          |                          | 103,931,470 |                          |               | 2,079 |       |  | 85,822                |  |       | 707 |      
|Loss
        for the year                                                              |                          | —           |                          |               | —     |       |  | —                     |  |       | —   |      
|Exchange
        differences                                                           |                          | —           |                          |               | —     |       |  | —                     |  |       | —   |      
|Goodwill
        relating to the disposal of associated and other investments          |                          | —           |                          |               | —     |       |  | —                     |  |       | —   |      
|Provision
        for impairment in carrying value of goodwill in associated companies |                          | —           |                          |               | —     |       |  | —                     |  |       | —   |      
|Premium
        on issue of new shares                                                 |                          | 35,721,045  |                          |               | 714   |       |  | 52,166                |  |       | —   |      
|                                                                                       |                          |             |                          |               |       |       |  |                       |  |       |     |      
|Balances
        as of
        March 31, 2002                                          |                          | 139,652,515 |                          |               | 2,793 |       |  | 137,988               |  |       | 707 |      
|                                                                                       |                          |             |                          |               |       |       |  |                       |  |       |     |      

The accompanying notes are an integral part of these consolidated financial statements.



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EIDOS PLC AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASHFLOW

|                                                                              | Notes |    | Year
      ended 
      March 31, 2000 |       | Year
      ended 
      March 31, 2001 |       | Year
      ended 
      March 31, 2002 |        
|----------------------------------------------------------------------------- | ----- | -- | -------------------------------------- | ----- | -------------------------------------- | ----- | -------------------------------------- | -------
|                                                                              |       |    |                                        |       |                                        |       |                                        |        
|                                                                              |       |    |                                        | £'000 |                                        | £'000 |                                        | £'000  
|Net cash inflow/(outflow) from operating activities                           |       | 23 |                                        |       | (28,467                                | )     |                                        | 1,888  
|                                                                              |       |    |                                        |       |                                        |       |                                        |        
|Dividends from Joint Ventures and Associates                                  |       |    |                                        |       | —                                      |       |                                        | 136    
|Returns on investment and servicing of finance                                |       |    |                                        |       |                                        |       |                                        |        
|Interest received                                                             |       |    |                                        |       | 1,090                                  |       |                                        | 812    
|Bank interest paid                                                            |       |    |                                        |       | (2,630                                 | )     |                                        | (3,554 
|Interest paid on bond                                                         |       |    |                                        |       | (652                                   | )     |                                        | —      
|Interest paid on finance leases                                               |       |    |                                        |       | (44                                    | )     |                                        | (24    
|Other interest paid                                                           |       |    |                                        |       | (245                                   | )     |                                        | (2     
|                                                                              |       |    |                                        |       |                                        |       |                                        |        
|                                                                              |       |    |                                        |       | (2,481                                 | )     |                                        | (2,768 
|                                                                              |       |    |                                        |       |                                        |       |                                        |        
|Taxation                                                                      |       |    |                                        |       |                                        |       |                                        |        
|U.K. taxation (paid)                                                          |       |    |                                        |       | (10,830                                | )     |                                        | (12,864
|Overseas taxation (paid)/refunded                                             |       |    |                                        |       | (5,965                                 | )     |                                        | 292    
|                                                                              |       |    |                                        |       |                                        |       |                                        |        
|                                                                              |       |    |                                        |       | (16,795                                | )     |                                        | (12,572
|                                                                              |       |    |                                        |       |                                        |       |                                        |        
|Capital expenditure and financial investment                                  |       |    |                                        |       |                                        |       |                                        |        
|Purchase of tangible fixed assets                                             |       |    |                                        |       | (3,602                                 | )     |                                        | (1,835 
|Sale of tangible fixed assets                                                 |       |    |                                        |       | 87                                     |       |                                        | 1,126  
|Purchase of other investments                                                 |       |    |                                        |       | (36,555                                | )     |                                        | —      
|Sale of other investments                                                     |       |    |                                        |       | 91,505                                 |       |                                        | (122   
|                                                                              |       |    |                                        |       |                                        |       |                                        |        
|                                                                              |       |    |                                        |       | 51,435                                 |       |                                        | (831   
|                                                                              |       |    |                                        |       |                                        |       |                                        |        
|Acquisitions and disposals                                                    |       |    |                                        |       |                                        |       |                                        |        
|Purchase of subsidiary companies                                              |       |    |                                        |       | (14,327                                | )     |                                        | —      
|Net cash acquired with subsidiaries                                           |       |    |                                        |       | —                                      |       |                                        | —      
|Purchase of associates and joint undertakings                                 |       |    |                                        |       | (17,945                                | )     |                                        | —      
|                                                                              |       |    |                                        |       |                                        |       |                                        |        
|                                                                              |       |    |                                        |       | (32,272                                | )     |                                        | —      
|                                                                              |       |    |                                        |       |                                        |       |                                        |        
|Net cash (outflow)/inflow before financing and management of liquid resources |       |    |                                        |       | (28,580                                | )     |                                        | (14,147
|                                                                              |       |    |                                        |       |                                        |       |                                        |        
|Management of liquid resources                                                |       |    |                                        |       |                                        |       |                                        |        
|Increase in term deposits                                                     |       |    |                                        |       | —                                      |       |                                        | —      
|                                                                              |       |    |                                        |       |                                        |       |                                        |        
|Financing                                                                     |       |    |                                        |       |                                        |       |                                        |        
|Issue of new Ordinary Shares                                                  |       |    |                                        |       | 3,964                                  |       |                                        | 796    
|Repayment of principal under finance leases                                   |       |    |                                        |       | (370                                   | )     |                                        | (274   
|                                                                              |       |    |                                        |       |                                        |       |                                        |        
|                                                                              |       |    |                                        |       | 3,594                                  |       |                                        | 522    
|                                                                              |       |    |                                        |       |                                        |       |                                        |        
|Increase/(decrease) in cash in the period                                     |       |    |                                        |       | (24,986                                | )     |                                        | (13,625
|                                                                              |       |    |                                        |       |                                        |       |                                        |        

The accompanying notes are
  an integral part of these consolidated financial statements.





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EIDOS PLC AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 Nature of Business and Organization

The activities of Eidos plc (''Eidos'' or
  the ''Company'') and subsidiaries (including Eidos, the ''Group'') during the
  periods presented herein were the developing and publishing of interactive software
  titles for PC and certain games consoles (under license with the console manufacturer),
  the design, manufacture and sale of video compression and video editing software,
  post-production video editing and new media design and consultancy.

Currently the principal markets for the Group's products, all of which are similar in size based on turnover, are the United  States, United Kingdom and Continental Europe. Asia and the Rest of the World make up a small but growing part of the  Group revenue. Computer software titles are sold primarily to wholesale and retail distributors.

The computer games industry is characterized
  by the dominance of ''hit titles''; consequently a relatively small number of
  titles (or franchises) will often make up a significant proportion of turnover
  and net income. Eidos' stated policy is to concentrate on quality titles and
  consequently titles which management believes to be marginal are often terminated
  or sub-licensed.

2 Summary of Significant Accounting Policies

The financial statements have been prepared
  under the historic (UK GAAP) cost convention and in accordance with accounting
  principles generally accepted in the United Kingdom. A summary of the more important
  Group accounting policies, which have been applied consistently, and where appropriate,
  a description of any areas of judgement which could have a material affect on
  the consolidated financial statements of the Group is set out below.

Generally accepted accounting principles in
  the United Kingdom (UK GAAP) differ in certain significant respects from those
  in the United States (US GAAP). Application of US GAAP would have affected shareholders
  funds and results of operations at March 31, 2001 and 2002 and for the years
  ended March 31, 2000, 2001 and 2002 to the extent summarized in Note 32.

Changes in Presentation of Financial Statements and Reclassifications

In accordance with FRS14, the earnings per share figures for March 31, 2000 and 2001 have been retrospectively adjusted  for the Rights Issue that occurred during the year.

Certain co-operative advertising expenses
  that were previously charged against Turnover have now been reclassified as
  an expense within sales and marketing costs and the March 31, 2001 comparatives
  have been restated to reflect this.

The figures for research and development and general and administrative expenses have been reclassified in the year  ended March 31, 2001 and 2000 for a change in the classification of certain expenses that occurred in the period.

The March 31, 2001 comparatives for segmental analysis by geographical area have been reclassfied to more accurately  reflect the geographic split. The directors have felt it appropriate that Group adjustments, which were previously held in  the United Kingdom, be reclassified to their respective territories.

Financial Reporting Standard 19 Deferred Tax
  (FRS 19) has been adopted by the Group. Under FRS 19, deferred tax is provided
  for on certain timing differences in full. FRS19 requires prior years to be
  restated. However the impact on net income of the implementation of FRS 19 on
  the Group was nil for the years ended March 31, 2000, 2001 and 2002. In accordance
  with FRS 19, deferred tax assets are regarded as recoverable to the extent that,
  on the basis of all available evidence, it can be regarded as more likely than
  not that there will be suitable taxable profits from which the future reversal
  of the underlying timing differences can be deducted. See Note 19 for an analysis
  of deferred taxes.





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Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings.  The results of subsidiaries sold or acquired are included in the consolidated income statement up to, or from, the date  control passes. Intra-group sales and profits are eliminated fully on consolidation.

On acquisition of a subsidiary, all of the subsidiary's assets and liabilities that exist at the date of acquisition are recorded  at their fair values reflecting their condition at that date. All changes to those assets and liabilities, and the resulting gains  and losses, that arise after the Group has gained control of the subsidiary are charged to the post acquisition statements  of operations.

Associated undertakings and joint ventures

Associated undertakings are undertakings in which the Group holds a long term interest and over which it exercises  significant influence but not control. Joint ventures are undertakings that are jointly controlled with other entities or  individuals. The Group's share of profits less losses from associated undertakings is included in the profit and loss  account on the equity accounting basis. The holding value of associated and joint undertakings is based upon the Group's  equity in net assets of such undertakings, as shown by the most recent accounts available.

Goodwill

Goodwill in respect of acquisitions of subsidiaries and associated undertakings represents the excess of the fair value of  the consideration given over the fair value of the identifiable net assets acquired. Goodwill arising prior to April 1, 1998  has been written off immediately against reserves. Goodwill arising after April 1, 1998 has been capitalized and amortized  to nil in the profit and loss account over the estimated economic life in accordance with FRS 10.

A charge is recognized in income in respect of any impairment in the value of goodwill. Goodwill written off directly to  reserves and not previously charged to income is included in determining the income or loss on disposal of a subsidiary.

Goodwill previously written off to reserves was not reinstated in the balance sheet when FRS 10 was adopted. It has been  set off against the merger reserve with the balance being set off against the profit and loss account reserve.

Given the nature of the industry, the useful
  economic life of goodwill is estimated to be three years and the intangible
  asset is being amortized over this period. In deriving the estimated useful
  economic life of goodwill the Group takes account of a number of factors including
  the future prospects for the entity concerned and the consequent projections
  for both net income and net cash-flow. To the extent that these projections
  no longer justify the carrying value of any remaining goodwill, then the amortisation
  charge will be accelerated to the degree required to reflect the revised estimate
  of the fair value of the goodwill. The estimates used in assessing the carrying
  value of goodwill carried at cost rely on assumptions made about the performance
  and prospects of the entities themselves and also about the markets in which
  they operate. Where the entities do not have an established track record or
  where they are operating in new or emerging markets then the inherent uncertainty
  in forecasting future performance may be compounded.

Turnover

Turnover, which excludes sales between Group companies, represents the invoiced amounts of goods sold, net of  provisions for returns, value added tax and trade discounts (excluding co-operative advertising expenses). Revenue from  royalty agreements is recognized upon reaching specific dates set out in royalty contracts. In the case of minimum royalty  agreements revenue is recognized when the amounts are contractually due and are non-refundable.

The majority of the Group's reported turnover
  is derived from the sale of pre-packaged entertainment software. Turnover is
  recorded at the point of sale, net of taxes and provisions for future returns
  and price protection. In common with other publishers of entertainment software





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the Group operates a number of territory-specific
  programmes under which retailers may qualify to return unsold product, subject
  to certain qualifying conditions. Alternatively the Group may offer price protection
  programmes in certain markets, though again these are subject to the satisfaction
  of certain qualifying conditions. Typically the Group maintains a policy of
  issuing credits under such programmes. By analysing historical rates of return
  and price protection in conjunction with a number of key variables including
  the prevailing market and economic conditions at that time, the Group is able
  to estimate future expected rates of returns and price protection. The adequacy
  of the reserves generated by these estimated rates is reviewed regularly in
  the light of current market and economic conditions, considering in particular
  up to date patterns of sell-through, anticipated trends in the hardware and
  software markets, seasonal factors, perceived consumer preferences and general
  economic conditions. If the Group's estimates of future expected returns and
  price protection are not adequate, the charges to the profit and loss account
  may be greater than expected in any given reported period.

Tangible fixed assets

The cost of fixed assets is their purchase cost, together with any incidental costs of acquisition. Provision is made for  depreciation on all tangible fixed assets at rates calculated to write off the cost less residual value of each asset over its  expected useful life as follows:

|Leasehold improvements |  | Over the life of the lease  | 
|---------------------- |  | --------------------------- | 
|Fixture and fittings   |  | 20% per annum straight line | 
|Computer equipment     |  | 33% per annum straight line | 
|Motor vehicles         |  | 25% per annum straight line | 

Research and development

All research and development expenditure is charged to income as incurred. This includes all software development  expenditure on individual titles, advance royalties paid under publishing agreements to external developers and advance  royalties paid under licensing arrangements.

Investments

Investments held as fixed assets are stated at cost less provision for any impairment in value.

In determining whether there has been any permanent impairment in the carrying value of investments the Group takes account of a number of  factors including the future prospects for the entities concerned and the consequent projections for both net income and net cash-flow. To the  extent that these projections no longer justify the carrying value of an investment then a provision will be made through the profit and loss  account to reflect the revised estimate of the fair value of the investment. The estimates used in assessing the carrying value of investments  rely on assumptions made about the performance and prospects of the entities themselves and also about the markets in which they operate.  Where the entities do not have an established track record or where they are operating in new or emerging markets then the inherent  uncertainty in forecasting future performance may be compounded and in certain circumstances the investments may be recorded at a net nil  cost on acquisition.

License fees

License fees payable to celebrities and professional
  sports organizations for use of their name over a number of years or for a range
  of products (a franchise), including sub-license arrangements and fees payable
  through intermediaries, are charged to income as sales and marketing expenditure
  over the life of the license. License fees are classified as current and non-current
  assets based on the remaining life of the license.

Management regularly reviews the carrying
  value of such licenses and where it appears unlikely that any remaining prepaid
  amounts will be recovered through the sale of future licensed titles, then these
  remaining amounts will be expensed in full immediately. In reviewing the recoverability
  of prepaid royalties and licenses, senior management relies on forecasts of





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future revenues. If revised revenue forecasts fall below the original forecasts,
  then the charge to the profit and loss account may be greater than expected
  in any given reporting period.

Deferred taxation

Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and  accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by UK Accounting Standards.  In reviewing the recoverability of deferred tax assets the Group has to estimate future taxable income for the relevant countries.

Tax charges or credits arising on the retranslation of foreign currency borrowings used to finance or provide a hedge against equity  investments in foreign enterprises are taken to the Statement of Total Recognised Gains and Losses together with the exchange differences on  the borrowings themselves.

The estimation of the Group's consolidated tax charge is a complex matter encompassing many different international tax jurisdictions. In  calculating the Group charge management has to make certain estimates regarding individual exposures in different countries and assess the  recoverability of deferred tax assets. It can often take many years to finalise individual tax charges and to reach agreement  on areas of  contention with the relevant tax authorities. In reviewing the recoverability of deferred tax assets the Group has to estimate future taxable  income for the relevant countries. To the extent that these estimations indicate that any such assets are not recoverable, then full provision will  be made against their carrying value.

Foreign currencies

Assets and liabilities of subsidiaries in foreign currencies are translated into sterling at rates of exchange ruling at the end  of the financial year. The results and cash flows of foreign subsidiaries are translated at the average rate of exchange for  the year. Gains and losses on exchange arising from the re-translation of the opening net investment in subsidiary  companies and from the translation of the results of those companies are taken to reserves and are reported in the  statement of total recognized gains and losses. Exchange differences arising from the re-translation of long-term foreign  currency borrowings used to finance foreign currency investments are also taken to reserves. All other foreign exchange  differences are taken to income in the year in which they arise.

Stocks

Stocks are valued at the lower of cost and net realizable value. In general, cost is determined on a first in, first out basis  and includes transport and handling costs.

The Group carries its inventory of finished goods at the lower of cost and net realisable value. In order to determine what this carrying value  should be, management has to estimate the price that they expect to achieve on the future sale of the stock. This process involves reviewing  current patterns of demand in the market and projecting these forward. It may also require an assessment of how future demand could be  affected by changes in the wholesale price charged by the Group and by other factors that may be beyond the control of the group. In this way  management will seek to determine the most realistic price that they believe can be achieved and hence the likelihood that inventories on hand  can be sold at or above cost.

Finance and operating leases

Costs in respect of operating leases are charged on a straight-line basis over the lease term. Leasing agreements that  transfer to the Group substantially all the benefits and risks of ownership of an asset are treated as if the asset has been  purchased outright. These assets are included in fixed assets and the capital element of the leasing commitments is  shown as obligations under finance leases. The capital element of lease payments is applied to reduce the



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outstanding  obligations and the interest element is charged to income so as to give a constant periodic rate of charge on the  remaining balance outstanding at each accounting period. Assets held under finance leases are depreciated over the  shorter of the lease terms or the useful lives of equivalent owned assets.

Pensions

The Group operates various defined contribution pension schemes. Contributions are charged to income as they become  payable in accordance with the rules of the schemes.

Derivative financial instruments

The Group uses derivative financial instruments to reduce exposure to foreign exchange risk. The Group does not hold or  issue derivative financial instruments for speculative purposes.

For a forward foreign exchange contract to be treated as a hedge, the instrument must be related to actual foreign  currency assets or liabilities or to a probable commitment. It must involve the same currency or similar currencies as the  hedged item and must also reduce the risk of foreign currency exchange movements on the Group's operations. Gains  and losses arising on these contracts are deferred and recognized in the profit and loss account, or as adjustments to the  carrying amount of fixed assets, only when the hedged transaction has itself been reflected in the Group's accounts.

If an instrument ceases to be accounted for as a hedge, for example, because the underlying hedged position is  eliminated, the instrument is marked to market and any resulting profit or loss recognized at that time.

Exceptional items

These are material items arising from events in the past or present ordinary activities of the Group and which due to their  size or incidence are disclosed separately in order that the consolidated financial statements give a true and fair view.

Use of estimates

The preparation of the financial statements
  in conformity with UK GAAP requires management to make estimates and assumptions
  that affect the reported amounts of assets and liabilities and disclosure of
  contingent liabilities at the date of the financial statements and the reported
  amounts of revenues and expenses during the reporting periods. Actual results
  could differ from those estimates.

3 Segmental Analysis

The analysis by class of business of the Group's turnover, income before taxation and assets for the years ended March  31, 2002, March 31, 2001 and March 31, 2000 is set out below.

Turnover by class of business

|                      | Year
      ended 
      March 31, 2000 |         | Year
      ended 
      March 31, 2001 |  | Year
      ended 
      March 31, 2002 | 
|--------------------- | -------------------------------------- | ------- | -------------------------------------- |  | -------------------------------------- | 
|                      |                                        |         |                                        |  |                                        | 
|                      | £'000                                  |         | £'000                                  |  | £'000                                  | 
|Class of business     |                                        |         |                                        |  |                                        | 
|Computer software     |                                        | 190,363 |                                        |  | 144,304                                | 
|Video editing         |                                        | 4,443   |                                        |  | 2,950                                  | 
|                      |                                        |         |                                        |  |                                        | 
|                      |                                        | 194,806 |                                        |  | 147,254                                | 
|Inter-segment revenue |                                        | (5      | )                                      |  | —                                      | 
|                      |                                        |         |                                        |  |                                        | 
|                      |                                        | 194,801 |                                        |  | 147,254                                | 
|                      |                                        |         |                                        |  |                                        | 



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Income/(loss) on ordinary activities before tax

|                  | Year
      ended 
      March 31, 2000 |        | Year
      ended 
      March 31, 2001 |  | Year
      ended
      March 31, 2002 |  
|----------------- | -------------------------------------- | ------ | -------------------------------------- |  | ------------------------------------- | -
|                  |                                        |        |                                        |  |                                       |  
|                  | £'000                                  |        | £'000                                  |  | £'000                                 |  
|Class of business |                                        |        |                                        |  |                                       |  
|Computer software |                                        | 49,897 |                                        |  | (95,956                               | )
|Video editing     |                                        | (622   | )                                      |  | (402                                  | )
|                  |                                        |        |                                        |  |                                       |  
|                  |                                        | 49,275 |                                        |  | (96,358                               | )
|                  |                                        |        |                                        |  |                                       |  

Net Assets/(Net liabilities)

|                  | Year
      ended 
      March 31, 2001 |        | Year
      ended 
      March 31, 2002 | 
|----------------- | -------------------------------------- | ------ | -------------------------------------- | 
|                  |                                        |        |                                        | 
|                  | £'000                                  |        | £'000                                  | 
|Class of business |                                        |        |                                        | 
|Computer software |                                        | 33,396 |                                        | 
|Video editing     |                                        | (2,779 | )                                      | 
|                  |                                        |        |                                        | 
|                  |                                        | 30,617 |                                        | 
|                  |                                        |        |                                        | 
|                  |                                        |        |                                        | 

Video editing was provided by Eidos Post Productions Ltd (formerly Glassworks Productions Ltd), an 85% subsidiary; the  business and assets of which were sold on December 15, 2000. The remaining net liabilities represent an intercompany  balance with the Eidos group.

Turnover by destination

The Group manages its computer software business by geographical area.

Eidos has offices in the United Kingdom, United
  States, France, Germany, Japan and Singapore. The latter two do not generate
  significant income in relation to the remainder of the Group and are included
  within the 'Rest of World' segment. The French and German offices sell to other
  French and German speaking European countries (namely Belgium, Austria and Switzerland).
  For reporting purposes these territories are included within 'Rest of Europe'.

The turnover is attributable to the Group's principal activities and arose in the following geographical areas:

|                                 | Year
      ended 
      March 31, 2000 |         | Year
      ended 
      March 31, 2001 |  | Year
      ended 
      March 31, 2002 | 
|-------------------------------- | -------------------------------------- | ------- | -------------------------------------- |  | -------------------------------------- | 
|                                 |                                        |         |                                        |  |                                        | 
|                                 | £'000                                  |         | £'000                                  |  | £'000                                  | 
|United Kingdom                   |                                        | 40,085  |                                        |  | 41,193                                 | 
|France                           |                                        | 21,181  |                                        |  | 12,639                                 | 
|Germany                          |                                        | 23,488  |                                        |  | 24,781                                 | 
|Rest of Europe                   |                                        | 35,113  |                                        |  | 14,207                                 | 
|United
        States of America |                                        | 63,719  |                                        |  | 39,229                                 | 
|Rest of World                    |                                        | 11,215  |                                        |  | 15,205                                 | 
|                                 |                                        |         |                                        |  |                                        | 
|                                 |                                        | 194,801 |                                        |  | 147,254                                | 
|                                 |                                        |         |                                        |  |                                        | 
|                                 |                                        |         |                                        |  |                                        | 



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Turnover by origination

|                                 | Year
      ended 
      March 31, 2000 |         | Year
      ended 
      March 31, 2001 |  | Year
      ended 
      March 31, 2002 | 
|-------------------------------- | -------------------------------------- | ------- | -------------------------------------- |  | -------------------------------------- | 
|                                 |                                        |         |                                        |  |                                        | 
|                                 | £'000                                  |         | £'000                                  |  | £'000                                  | 
|United Kingdom                   |                                        | 73,270  |                                        |  | 55,884                                 | 
|France                           |                                        | 26,222  |                                        |  | 15,215                                 | 
|Germany                          |                                        | 27,311  |                                        |  | 27,517                                 | 
|United
        States of America |                                        | 65,598  |                                        |  | 46,502                                 | 
|Rest of World                    |                                        | 2,400   |                                        |  | 2,136                                  | 
|                                 |                                        |         |                                        |  |                                        | 
|                                 |                                        | 194,801 |                                        |  | 147,254                                | 
|                                 |                                        |         |                                        |  |                                        | 
|                                 |                                        |         |                                        |  |                                        | 

Inter-segment sales (predominantly royalties)

|                                 | By origination                  |       
|-------------------------------- | ------------------------------- | ------
|                                 | Year ended
      March 31, 2000 |       
|                                 |                                 |       
|                                 | £'000                           |       
|United Kingdom                   |                                 | 65,029
|France                           |                                 | —     
|Germany                          |                                 | 111   
|United
        States of America |                                 | 10,270
|Rest of World                    |                                 | 1,027 
|                                 |                                 |       
|                                 |                                 | 76,437
|                                 |                                 |       

Income/(loss) on ordinary activities before tax

|                                                      | Year
      ended 
      March 31,
      2000 |         | Year
      ended 
      March 31,
      2001 |  | Year
      ended 
      March 31,
      2002 |  
|----------------------------------------------------- | -------------------------------------------- | ------- | -------------------------------------------- |  | -------------------------------------------- | -
|                                                      |                                              |         |                                              |  |                                              |  
|                                                      | £'000                                        |         | £'000                                        |  | £'000                                        |  
|Geographical segment                                  |                                              |         |                                              |  |                                              |  
|United
        Kingdom                                |                                              | (2,059  | )                                            |  | (9,907                                       | )
|France                                                |                                              | (459    | )                                            |  | (1,863                                       | )
|Germany                                               |                                              | (3,538  | )                                            |  | 1,036                                        |  
|Spain (joint ventures)                                |                                              | 493     |                                              |  | (4,023                                       | )
|United
        States of America                      |                                              | (25,531 | )                                            |  | (45,362                                      | )
|Rest
        of World                                 |                                              | 133     |                                              |  | 69                                           |  
|                                                      |                                              |         |                                              |  |                                              |  
|                                                      |                                              | (30,961 | )                                            |  | (60,050                                      | )
|Profit/(loss)
        on investments – United Kingdom |                                              | 80,236  |                                              |  | (36,308                                      | )
|                                                      |                                              |         |                                              |  |                                              |  
|                                                      |                                              | 49,275  |                                              |  | (96,358                                      | )
|                                                      |                                              |         |                                              |  |                                              |  
|                                                      |                                              |         |                                              |  |                                              |  

Turnover from the joint ventures originates
  from Spain and relates to computer software. In addition, turnover in the U.K.
  includes £1,157,000 (2001: £1,246,000, 2000: £3,856,000) sales to the joint
  venture in Spain.





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Net Assets/(Net Liabilities)

|                                 | March 31, 2001 |         | March 31, 2002 | 
|-------------------------------- | -------------- | ------- | -------------- | 
|                                 |                |         |                | 
|                                 | £'000          |         | £'000          | 
|Geographical segment             |                |         |                | 
|United Kingdom                   |                | 72,898  |                | 
|France                           |                | 615     |                | 
|Germany                          |                | 398     |                | 
|Spain (joint ventures)           |                | 9,513   |                | 
|United
        States of America |                | (53,366 | )              | 
|Rest of World                    |                | 559     |                | 
|                                 |                |         |                | 
|                                 |                | 30,617  |                | 
|                                 |                |         |                | 

The March 31, 2001 comparatives for segmental analysis by geographical area have been reclassified to more accurately  reflect the geographic split. The directors have felt it appropriate that Group adjustments, which were previously held in  the United Kingdom, be reclassified to their respective territories.

4 Directors emoluments

Detailed disclosures of the Directors' individual remuneration and share options are also given in Item 6.

|                              | Year
      ended 
      March 31,
      2000 |       | Year
      ended 
      March 31, 
      2001 |  | Year
      ended 
      March 31, 
      2002 | 
|----------------------------- | -------------------------------------------- | ----- | --------------------------------------------- |  | --------------------------------------------- | 
|                              |                                              |       |                                               |  |                                               | 
|                              | £'000                                        |       | £'000                                         |  | £'000                                         | 
|Directors' emoluments         |                                              |       |                                               |  |                                               | 
|Salary payments and royalties |                                              | 7,137 |                                               |  | 4,388                                         | 
|Fees                          |                                              | 74    |                                               |  | 106                                           | 
|Company pension contributions |                                              | 113   |                                               |  | 129                                           | 
|Other benefits                |                                              | 236   |                                               |  | 269                                           | 
|                              |                                              |       |                                               |  |                                               | 
|                              |                                              | 7,560 |                                               |  | 4,892                                         | 
|                              |                                              |       |                                               |  |                                               | 



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Interests in share options

Details of options held by directors are set out below:

|                            | As
      at
      April 1,
      2001 |            | As
      adjusted for rights issue(3) |  | Granted
      in period |  | Lapsed
      in
      period |         | As
      at
      March 31,
      2002 |  | Post
      rights issue exercise price |  | Date
      from which exercisable |           | Expiry
      date | 
|--------------------------- | ------------------------------------- | ---------- | ------------------------------------- |  | ----------------------- |  | ---------------------------- | ------- | -------------------------------------- |  | -------------------------------------- |  | --------------------------------- | --------- | ----------------- | 
|                            |                                       |            |                                       |  |                         |  |                              |         |                                        |  |                                        |  |                                   |           |                   | 
|Mr.
        Livingstone     |                                       | 221,065    |                                       |  | 245,763                 |  |                              | —       |                                        |  | —                                      |  |                                   | 245,763   |                   | 
|                            |                                       | 18,935     |                                       |  | 21,050                  |  |                              | —       |                                        |  | —                                      |  |                                   | 21,050    |                   | 
|                            |                                       | (1)282,880 |                                       |  | 314,485                 |  |                              | —       |                                        |  | —                                      |  |                                   | 314,485   |                   | 
|Mr.
        McGarvey        |                                       | 125,520    |                                       |  | 139,543                 |  |                              | —       |                                        |  | —                                      |  |                                   | 139,543   |                   | 
|                            |                                       | 1,000,000  |                                       |  | 1,111,725               |  |                              | —       |                                        |  | —                                      |  |                                   | 1,111,725 |                   | 
|Mr.
        Heath- Smith(2) |                                       | 180,870    |                                       |  | 201,077                 |  |                              | —       |                                        |  | —                                      |  |                                   | 201,077   |                   | 
|                            |                                       | 19,130     |                                       |  | 21,267                  |  |                              | —       |                                        |  | —                                      |  |                                   | 21,267    |                   | 
|Mr.
        Protheroe       |                                       | 70,000     |                                       |  | 77,820                  |  |                              | —       |                                        |  | —                                      |  |                                   | 77,820    |                   | 
|                            |                                       | 50,000     |                                       |  | 55,586                  |  |                              | —       |                                        |  | —                                      |  |                                   | 55,586    |                   | 
|                            |                                       | 100,000    |                                       |  | 111,172                 |  |                              | —       |                                        |  | —                                      |  |                                   | 111,172   |                   | 
|Mr.
        Cruickshank(2)  |                                       | —          |                                       |  | —                       |  |                              | 88,236  |                                        |  | —                                      |  |                                   | 88,236    |                   | 
|                            |                                       | —          |                                       |  | —                       |  |                              | 11,764  |                                        |  | —                                      |  |                                   | 11,764    |                   | 
|                            |                                       |            |                                       |  |                         |  |                              |         |                                        |  |                                        |  |                                   |           |                   | 
|Total                       |                                       | 2,068,400  |                                       |  | 2,299,488               |  |                              | 100,000 |                                        |  | —                                      |  |                                   | 2,399,488 |                   | 
|                            |                                       |            |                                       |  |                         |  |                              |         |                                        |  |                                        |  |                                   |           |                   | 

None of the non-executive Directors have any options in the Company

|   
|---
|(1)
|(2)
|(3)

The closing market price of shares in Eidos plc was 142.0p on March 28, 2002 and 120.0p on August 31, 2002 The highest closing price during the fiscal year was 288.18p and the lowest was
129.25p.

All options give the holders the rights to acquire shares on a one for one basis.

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5 Employee Information

The average weekly number of persons (including executive directors) employed by the Group and total costs during the  periods indicated below were:

|                                             | Year
      ended 
      March 31, 
      2000 |     | Year
      ended 
      March 31,
      2001 |  | Year
      ended 
      March 31, 
      2002 | 
|-------------------------------------------- | --------------------------------------------- | --- | -------------------------------------------- |  | --------------------------------------------- | 
|                                             |                                               |     |                                              |  |                                               | 
|By activity                                  |                                               |     |                                              |  |                                               | 
|Corporate                                    |                                               | 26  |                                              |  | 33                                            | 
|Computer entertainment software              |                                               | 485 |                                              |  | 484                                           | 
|Video editing, post production and new media |                                               | 72  |                                              |  | 35                                            | 
|                                             |                                               |     |                                              |  |                                               | 
|                                             |                                               | 583 |                                              |  | 552                                           | 
|                                             |                                               |     |                                              |  |                                               | 

Computer entertainment software staff numbers have been further broken down in Item 6.

|                            | Year
      ended 
      March 31, 
      2000 |        | Year
      ended 
      March 31, 
      2001 |  | Year
      ended 
      March 31, 
      2002 | 
|--------------------------- | --------------------------------------------- | ------ | --------------------------------------------- |  | --------------------------------------------- | 
|                            |                                               |        |                                               |  |                                               | 
|                            | £'000                                         |        | £'000                                         |  | £'000                                         | 
|Staff costs                 |                                               |        |                                               |  |                                               | 
|Wages and salaries          |                                               | 32,526 |                                               |  | 27,576                                        | 
|Social security costs       |                                               | 3,763  |                                               |  | 2,876                                         | 
|Pension costs (See Note 28) |                                               | 858    |                                               |  | 784                                           | 
|                            |                                               |        |                                               |  |                                               | 
|                            |                                               | 37,147 |                                               |  | 31,236                                        | 
|                            |                                               |        |                                               |  |                                               | 

6 Net interest and similar charges

|                                  | Year ended March 31, 2000 |        | Year ended March 31, 2001 |  | Year ended March 31, 2002 |  
|--------------------------------- | ------------------------- | ------ | ------------------------- |  | ------------------------- | -
|                                  |                           |        |                           |  |                           |  
|                                  | £'000                     |        | £'000                     |  | £'000                     |  
|Interest payable                  |                           |        |                           |  |                           |  
|Group                             |                           |        |                           |  |                           |  
|Bank loans and overdrafts         |                           | (3,868 | )                         |  | (3,468                    | )
|Convertible bond                  |                           | (984   | )                         |  | —                         |  
|Finance leases                    |                           | (43    | )                         |  | (21                       | )
|Other interest                    |                           | (297   | )                         |  | (204                      | )
|                                  |                           |        |                           |  |                           |  
|                                  |                           | (5,192 | )                         |  | (3,693                    | )
|Share of joint ventures           |                           | (48    | )                         |  | (39                       | )
|                                  |                           |        |                           |  |                           |  
|                                  |                           | (5,240 | )                         |  | (3,732                    | )
|                                  |                           |        |                           |  |                           |  
|Interest receivable               |                           |        |                           |  |                           |  
|Group                             |                           | 1,100  |                           |  | 826                       |  
|Share of joint ventures           |                           | 10     |                           |  | 9                         |  
|                                  |                           |        |                           |  |                           |  
|                                  |                           | 1,110  |                           |  | 835                       |  
|                                  |                           |        |                           |  |                           |  
|Net interest receivable/(payable) |                           | (4,130 | )                         |  | (2,897                    | )
|                                  |                           |        |                           |  |                           |  



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7 Income/(Loss) on Ordinary Activities Before Tax

|                                                                | Year ended March 31, 2000 |        | Year ended March 31, 2001 |  | Year ended March 31, 2002 | 
|--------------------------------------------------------------- | ------------------------- | ------ | ------------------------- |  | ------------------------- | 
|                                                                |                           |        |                           |  |                           | 
|                                                                | £'000                     |        | £'000                     |  | £'000                     | 
|This is stated after charging:                                  |                           |        |                           |  |                           | 
|Depreciation of tangible owned fixed assets                     |                           | 2,767  |                           |  | 2,208                     | 
|Depreciation of tangible fixed assets held under finance leases |                           | 383    |                           |  | 220                       | 
|Amortization of goodwill                                        |                           | 13,448 |                           |  | 16,107                    | 
|Write off of goodwill                                           |                           | 506    |                           |  | —                         | 
|Auditors' remuneration for audit                                |                           | 255    |                           |  | 267                       | 
|Other fees paid to the auditors and their associates*           |                           | 757    |                           |  | 884                       | 
|Hire of plant and machinery – operating leases                  |                           | 606    |                           |  | 726                       | 
|Hire of other assets – operating leases                         |                           | 2,133  |                           |  | 2,363                     | 
|(Gain) or loss on exchange differences                          |                           | (476   | )                         |  | 282                       | 
|                                                                |                           |        |                           |  |                           | 

| 
|-
|*

8 Profit/(loss) on investments and exceptional items

|                                                                                                                     | Year ended March 31, 2000 |        | Year ended March 31, 2001 |  | Year ended March 31, 2002 |  
|-------------------------------------------------------------------------------------------------------------------- | ------------------------- | ------ | ------------------------- |  | ------------------------- | -
|                                                                                                                     |                           |        |                           |  |                           |  
|                                                                                                                     | £'000                     |        | £'000                     |  | £'000                     |  
|Profit / (loss) on investments                                                                                       |                           |        |                           |  |                           |  
|Profit on disposal of other investments                                                                              |                           | 80,236 |                           |  | —                         |  
|Loss on disposal of associates and other investments                                                                 |                           | —      |                           |  | —                         |  
|                                                                                                                     |                           |        |                           |  |                           |  
|Profit on disposal of fixed asset investments                                                                        |                           | 80,236 |                           |  | —                         |  
|                                                                                                                     |                           |        |                           |  |                           |  
|Write down of investments                                                                                            |                           |        |                           |  |                           |  
|Write-off on investment in Express.com (including £895,000 of professional fees incurred during the year)            |                           | —      |                           |  | (36,352                   | )
|Profit on disposal of Associate (after writing back related goodwill of £475,000 previously written off to reserves) |                           | —      |                           |  | 44                        |  
|Provision for impairment in carrying value of goodwill (previously written off to reserves)                          |                           | —      |                           |  | —                         |  
|Provision against other investments                                                                                  |                           | —      |                           |  | —                         |  
|                                                                                                                     |                           |        |                           |  |                           |  
|Write down of investments                                                                                            |                           | —      |                           |  | (36,308                   | )
|                                                                                                                     |                           |        |                           |  |                           |  
|Other items                                                                                                          |                           |        |                           |  |                           |  
|Returns provision                                                                                                    |                           | —      |                           |  | (16,900                   | )
|Legal and professional fees – abortive bid talk                                                                      |                           | —      |                           |  | (938                      | )
|                                                                                                                     |                           |        |                           |  |                           |  
|                                                                                                                     |                           | 80,236 |                           |  | (54,146                   | )
|                                                                                                                     |                           |        |                           |  |                           |  

The group returns provision of £16.9 million related to returns identified and incurred during 2001, but relating to titles  released in the previous year.

The effect on the taxation charge for the year of the exceptional items is disclosed in Note 9.



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9 Tax on Income/(Loss) on Ordinary Activities

|                                       | Year
      ended 
      March 31, 
      2000 |        | Year
      ended 
      March 31, 
      2001 |  | Year
      ended 
      March 31, 
      2002 | 
|-------------------------------------- | --------------------------------------------- | ------ | --------------------------------------------- |  | --------------------------------------------- | 
|                                       |                                               |        |                                               |  |                                               | 
|                                       | £'000                                         |        | £'000                                         |  | £'000                                         | 
|U.K. Corporation tax                   |                                               | 25,711 |                                               |  | —                                             | 
|Overseas
        taxation              |                                               | (1,918 | )                                             |  | 587                                           | 
|Deferred taxation                      |                                               | 628    |                                               |  | —                                             | 
|                                       |                                               |        |                                               |  |                                               | 
|                                       |                                               | 24,421 |                                               |  | 587                                           | 
|Adjustment in respect of prior years:  |                                               |        |                                               |  |                                               | 
|Overseas taxation                      |                                               | (349   | )                                             |  | 244                                           | 
|U.K. taxation                          |                                               | —      |                                               |  | 140                                           | 
|                                       |                                               |        |                                               |  |                                               | 
|                                       |                                               | 24,072 |                                               |  | 971                                           | 
|                                       |                                               |        |                                               |  |                                               | 
|Of which:                              |                                               |        |                                               |  |                                               | 
|Arising on the disposal of investments |                                               | 24,586 |                                               |  | —                                             | 
|Remaining Group taxation               |                                               | (746   | )                                             |  | 744                                           | 
|Joint ventures' taxation               |                                               | 232    |                                               |  | 227                                           | 
|                                       |                                               |        |                                               |  |                                               | 
|                                       |                                               | 24,072 |                                               |  | 971                                           | 
|                                       |                                               |        |                                               |  |                                               | 

Total income tax expense differs from the amounts computed by applying the U.K. statutory income tax rate of 30%  (2001: 30%, 2000: 30%) to income/(loss) before taxes, as a result of the following:

|                                                                                 | Year ended
      
      March 31, 
      2000 |        | Year ended
      
      March 31, 
      2001 |  | Year ended
      
      March 31, 
      2002 |  
|-------------------------------------------------------------------------------- | --------------------------------------------- | ------ | --------------------------------------------- |  | --------------------------------------------- | -
|                                                                                 |                                               |        |                                               |  |                                               |  
|                                                                                 | £'000                                         |        | £'000                                         |  | £'000                                         |  
|U.K.
        statutory rate                                                      |                                               | 14,783 |                                               |  | (28,907                                       | )
|Difference
        between overseas and U.K. tax rate                            |                                               | (2,605 | )                                             |  | (5,924                                        | )
|Permanent
        disallowables                                                  |                                               | 5,946  |                                               |  | 7,742                                         |  
|Tax
        effect of bad debt provision against U.S. intercompany balance       |                                               | —      |                                               |  | —                                             |  
|Timing
        difference where benefit will be recognized in future periods     |                                               | 3,670  |                                               |  | 14,807                                        |  
|Current
        year losses unable to be utlised in the current period           |                                               | —      |                                               |  | 14,151                                        |  
|Utilization
        of brought forward losses and losses previously unrecognised |                                               | (39    | )                                             |  | (469                                          | )
|Other
        differences                                                        |                                               | 2,317  |                                               |  | (429                                          | )
|                                                                                 |                                               |        |                                               |  |                                               |  
|Provision                                                                        |                                               | 24,072 |                                               |  | 971                                           |  
|                                                                                 |                                               |        |                                               |  |                                               |  

There is no current year tax effect in the profit and loss account relating to the exceptional items in either the current  or prior year.

Corporation tax arising on exceptional items
  in fiscal 2000 amounted to £24,586,000 relating entirely to the gain on
  the disposal of Opticom shares.





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10 Earnings/(loss) Per Share

The calculations of earnings per share are based on the following information. All numbers (including the comparatives)  reflect the five for one share split, which took place on January 25, 2000 and the 1 for 3 Rights Issue, which took place in  July 2001.

Weighted average number of shares:

|Number
        of shares               | Year
      ended
March 31,
2000 |             | Year
      ended
March 31,
      2001 |  | Year
      ended
March 31,
      2002 | 
|-------------------------------------- | ------------------------------- | ----------- | ------------------------------------- |  | ------------------------------------- | 
|                                       |                                 |             |                                       |  |                                       | 
|For
        basic earnings per share   |                                 | 108,083,892 |                                       |  | 115,223,869                           | 
|Conversion
        of convertible debt |                                 | 5,284,761   |                                       |  | —                                     | 
|Exercise
        of share options      |                                 | 5,384,004   |                                       |  | 2,580,748                             | 
|                                       |                                 |             |                                       |  |                                       | 
|For
        diluted earnings per share |                                 | 118,752,657 |                                       |  | 117,804,617                           | 
|                                       |                                 |             |                                       |  |                                       | 

No dividends were paid during any of the last three fiscal years.

|                                              | Basic                     |        | Diluted                   | 
|--------------------------------------------- | ------------------------- | ------ | ------------------------- | 
|                                              | Year
ended
March 31,
2000 |        | Year
ended
March 31,
2001 | 
|                                              |                           |        |                           | 
|                                              | £'000                     |        | £'000                     | 
|Net income/(loss) for the year                |                           | 25,203 |                           | 
|Interest saved on conversion of debt          |                           | —      |                           | 
|                                              |                           |        |                           | 
|Earnings/(loss)                               |                           | 25,203 |                           | 
|                                              |                           |        |                           | 
|Earnings/(loss) per share (basic and diluted) |                           | 23.3p  |                           | 
|                                              |                           |        |                           | 



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11 Intangible Fixed Assets

|                            | Joint Ventures |        | Others |  | Total  | 
|--------------------------- | -------------- | ------ | ------ |  | ------ | 
|                            |                |        |        |  |        | 
|                            | £'000          |        | £'000  |  | £'000  | 
|Goodwill                    |                |        |        |  |        | 
|Cost                        |                |        |        |  |        | 
|At April 1, 2001            |                | 15,745 |        |  | 33,888 | 
|Additions (Note 31)         |                | —      |        |  | 886    | 
|                            |                |        |        |  |        | 
|At March 31, 2002           |                | 15,745 |        |  | 34,774 | 
|                            |                |        |        |  |        | 
|Amortization                |                |        |        |  |        | 
|At April 1, 2001            |                | 8,667  |        |  | 27,129 | 
|Exchange adjustments        |                | (4     | )      |  | 77     | 
|Amortization for the period |                | 5,192  |        |  | 6,906  | 
|                            |                |        |        |  |        | 
|At March 31, 2002           |                | 13,855 |        |  | 34,112 | 
|                            |                |        |        |  |        | 
|Net book value              |                |        |        |  |        | 
|At March 31, 2002           |                | 1,890  |        |  | 662    | 
|                            |                |        |        |  |        | 
|At March 31, 2001           |                | 7,078  |        |  | 6,759  | 
|                            |                |        |        |  |        | 

Given the nature of the industry, goodwill amortization on Proein SL, Pyro Studios SL (acquired in 2000), Crystal  Dynamics, Inc. (acquired in 1999) and Ion Storm (acquired 2002) has been calculated based on the three year estimated  useful economic life as detailed in note 2.

12 Tangible Fixed Assets

|                                           | Leasehold
      improvements |       | Fixtures
      and fittings |  | Computer
      equipment |   | Motor
      vehicles |       | Total | 
|------------------------------------------ | ---------------------------- | ----- | --------------------------- |  | ------------------------ | - | -------------------- | ----- | ----- | 
|                                           |                              |       |                             |  |                          |   |                      |       |       | 
|                                           | £'000                        |       | £'000                       |  | £'000                    |   | £'000                |       | £'000 | 
|Cost                                       |                              |       |                             |  |                          |   |                      |       |       | 
|At
        April 1, 2001                   |                              | 2,874 |                             |  | 2,382                    |   |                      | 6,942 |       | 
|Exchange
        adjustment                |                              | (22   | )                           |  | (18                      | ) |                      | (52   | )     | 
|Additions                                  |                              | 36    |                             |  | 53                       |   |                      | 2,413 |       | 
|From
        acquisitions                  |                              | 7     |                             |  | 203                      |   |                      | 362   |       | 
|Disposals                                  |                              | —     |                             |  | —                        |   |                      | (20   | )     | 
|                                           |                              |       |                             |  |                          |   |                      |       |       | 
|At
        March 31, 2002                  |                              | 2,895 |                             |  | 2,620                    |   |                      | 9,645 |       | 
|                                           |                              |       |                             |  |                          |   |                      |       |       | 
|Depreciation                               |                              |       |                             |  |                          |   |                      |       |       | 
|At
        April 1, 2001                   |                              | 700   |                             |  | 1,818                    |   |                      | 5,196 |       | 
|Exchange
        adjustments               |                              | (7    | )                           |  | (19                      | ) |                      | (55   | )     | 
|Charge
        for the period              |                              | 272   |                             |  | 315                      |   |                      | 1,652 |       | 
|Eliminated
        in respect of disposals |                              | —     |                             |  | —                        |   |                      | (15   | )     | 
|                                           |                              |       |                             |  |                          |   |                      |       |       | 
|At
        March 31, 2002                  |                              | 965   |                             |  | 2,114                    |   |                      | 6,778 |       | 
|                                           |                              |       |                             |  |                          |   |                      |       |       | 
|Net
        book value                     |                              |       |                             |  |                          |   |                      |       |       | 
|At
        March 31, 2002                  |                              | 1,930 |                             |  | 506                      |   |                      | 2,867 |       | 
|                                           |                              |       |                             |  |                          |   |                      |       |       | 
|Net
        book value                     |                              |       |                             |  |                          |   |                      |       |       | 
|At
        March 31, 2001                  |                              | 2,174 |                             |  | 564                      |   |                      | 1,746 |       | 
|                                           |                              |       |                             |  |                          |   |                      |       |       | 





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The net book value of tangible fixed assets includes an amount of £254,000 (2001: £391,000) in respect of assets held  under finance leases.

13 Investments

|                                                      | Joint
      ventures |       | Associated
      undertakings |  | Other
      investments |   | Total |       
|----------------------------------------------------- | -------------------- | ----- | ----------------------------- |  | ----------------------- | - | ----- | ------
|                                                      |                      |       |                               |  |                         |   |       |       
|                                                      | £'000                |       | £'000                         |  | £'000                   |   | £'000 |       
|At
        April 1, 2001                              |                      | 2,435 |                               |  | 4                       |   |       | 2,624 
|Share
        of retained profits less dividends paid |                      | 451   |                               |  | —                       |   |       | —     
|Disposals                                             |                      | —     |                               |  | —                       |   |       | (2,555
|Provisions
        against investments                |                      | —     |                               |  | (3                      | ) |       | (69   
|                                                      |                      |       |                               |  |                         |   |       |       
|At
        March 31, 2002                             |                      | 2,886 |                               |  | 1                       |   |       | —     
|                                                      |                      |       |                               |  |                         |   |       |       

Disposals

Opticom

The Group sold its remaining stake in the during November and December 2001, for £11.0 million net of costs. See Note 8  for details.

Vision Park Entertainment AB

The Group sold it's remaining shares in October 2001 for £122,900.



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Interests in Group undertakings

The directors consider that to give full particulars of all interests in Group undertakings would lead to a statement of  excessive length. The following information relates to those subsidiary undertakings, joint ventures and associated  undertakings whose results or financial position, in the opinion of the directors, principally affected the financial  statements of the Group:

|Subsidiary
        undertakings                      | Country
      of
      incorporation |  | Nature
      of business                           |  | Description
      of
      shares held                           |  | Other
      Group
      companies |  | Company | 
|---------------------------------------------------- | ------------------------------------ |  | -------------------------------------------------- |  | ---------------------------------------------------------------- |  | --------------------------------- |  | ------- | 
|                                                     |                                      |  |                                                    |  |                                                                  |  |                                   |  |         | 
|Eidos
        Interactive Limited                    | England
      and Wales              |  | Developer and
      Publisher of computer software |  | Ordinary £1 shares each
      and 'A' ordinary £0.05 shares each |  | —                                 |  | 100%    | 
|Eidos
        Interactive Inc                        | U.S.A                                |  | Developer and Publisher of computer software       |  | Common stock $0.001 par
      value                              |  | 100%                              |  | —       | 
|Crystal
        Dynamics Inc                         | U.S.A                                |  | Developer of computer software                     |  | Common stock no par value                                        |  | 100%                              |  |         | 
|Core
        Design Limited                          | England 
      and Wales             |  | Developer of computer software                     |  | Ordinary £1 shares                                               |  | 100%                              |  | —       | 
|Eidos
        Interactive France
        SARL        | France                               |  | Publisher of computer software                     |  | Ordinary Shares of 7,623
      Euros                             |  | 100%                              |  | —       | 
|Eidos
        Interactive
        (Deutschland) GmbH | Germany                              |  | Publisher of computer software                     |  | Euros 25,565                                                     |  | 100%                              |  | —       | 
|Eidos
        Interactive KK                         | Japan                                |  | Publisher of computer software                     |  | 100 million Yen                                                  |  | —                                 |  | 100%    | 
|Eidos
        Interactive Pte
        Limited        | Singapore                            |  | Publisher of computer software                     |  | Ordinary S$1 shares                                              |  | —                                 |  | 100%    | 
|Ion
        Storm LLP                                | U.S.A.                               |  | Developer of
      computer software               |  | Partnership units                                                |  | 89%                               |  | —       | 

|                                   |                                |  |                                |  |                                          |  |                                   |     |         | 
|---------------------------------- | ------------------------------ |  | ------------------------------ |  | ---------------------------------------- |  | --------------------------------- | --- | ------- | 
|Joint
        ventures             |                                |  |                                |  |                                          |  |                                   |     |         | 
|                                   |                                |  |                                |  |                                          |  |                                   |     |         | 
|Proein
        SL                  | Spain                          |  | Publisher of computer software |  | 5000 Common shares
      of 6 Euros each |  | 75%                               |     | —       | 
|Pyro
        Studios SL            | Spain                          |  | Developer of computer software |  | 500 Common shares of 6 Euros
      each  |  | 25%                               | (1) | —       | 
|Associated
      undertakings      | Country of
      incorporation |  | Nature of business             |  | Description of
      shares held         |  | Other
      Group
      companies |     | Company | 
|                                   |                                |  |                                |  |                                          |  |                                   |     |         | 
|Sports
        Interactive Limited | England
      and Wales        |  | Developer of computer software |  | Ordinary shares                          |  | 25%                               |     | —       | 

All the above companies operated principally
  in their country of incorporation.

---

|(1) | Effective holding shown.
|--- | ------------------------
|   





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14 Stocks

|                                      | March 31, 2001 |       | March 31, 2002
|------------------------------------- | -------------- | ----- | --------------
|                                      |                |       |               
|                                      | £'000          |       | £'000         
|Raw
        materials and consumables |                | 494   |               
|Finished
        goods                |                | 2,621 |               
|                                      |                |       |               
|Stocks                                |                | 3,115 |               
|                                      |                |       |               

15 Debtors

|                                       | March
      31, 2001 |        | March
      31, 2002 | 
|-------------------------------------- | -------------------- | ------ | -------------------- | 
|                                       |                      |        |                      | 
|                                       | £'000                |        | £'000                | 
|Trade
        debtors, net             |                      | 18,833 |                      | 
|Prepaid
        licenses               |                      | 3,855  |                      | 
|Deferred
        tax asset (note 19)   |                      | 1,428  |                      | 
|Corporation
        tax recoverable    |                      | 3,341  |                      | 
|Other
        debtors                  |                      | 2,052  |                      | 
|Prepayments
        and accrued income |                      | 1,880  |                      | 
|                                       |                      |        |                      | 
|                                       |                      | 31,389 |                      | 
|                                       |                      |        |                      | 

Included within prepaid licenses is £1,752,000 in respect of periods that extend beyond one year (2001: £2,791,000).

16 Creditors: Amounts Falling Due Within One Year

|                                              | March
      31,
      2001 |        | March
      31,
      2002 | 
|--------------------------------------------- | -------------------------- | ------ | -------------------------- | 
|                                              |                            |        |                            | 
|                                              | £'000                      |        | £'000                      | 
|Bank
        loans and overdrafts             |                            | 18,868 |                            | 
|Obligations
        under finance leases      |                            | 67     |                            | 
|Trade
        creditors                       |                            | 7,313  |                            | 
|Royalty
        creditors                     |                            | 4,536  |                            | 
|Other
        taxes and social security costs |                            | 1,302  |                            | 
|Other
        creditors                       |                            | 1,511  |                            | 
|Accruals                                      |                            | 8,426  |                            | 
|Corporation
        tax                       |                            | 11,296 |                            | 
|                                              |                            |        |                            | 
|                                              |                            | 53,319 |                            | 
|                                              |                            |        |                            | 



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17 Creditors: Amounts Falling Due After More Than One Year

|                                          | March
      31,
      2001 |       | March
      31,
      2002 | 
|----------------------------------------- | -------------------------- | ----- | -------------------------- | 
|                                          |                            |       |                            | 
|                                          | £'000                      |       | £'000                      | 
|Accruals
        and deferred income      |                            | 2,000 |                            | 
|Obligations
        under finance leases: |                            |       |                            | 
|Due
        between one and two years     |                            | 56    |                            | 
|Due
        between two and five years    |                            | 262   |                            | 
|                                          |                            |       |                            | 
|                                          |                            | 2,318 |                            | 
|                                          |                            |       |                            | 

18 Provisions for liabilities and charges

|                                      | £'000 |      
|------------------------------------- | ----- | -----
|As at April 1, 2001                   |       | —    
|Provision for future rent commitments |       | 1,524
|                                      |       |      
|As at March 31,2002                   |       | 1,524
|                                      |       |      

The provision represents the discounted value of future lease payments in respect of a vacant property which is leased  until 2008 by a subsidiary that was acquired during the period (see Note 31).

19 Deferred Taxation

|                                                                | March
      31,
      2001 |        | March
      31,
      2002 | 
|--------------------------------------------------------------- | -------------------------- | ------ | -------------------------- | 
|                                                                |                            |        |                            | 
|                                                                | £'000                      |        | £'000                      | 
|Unrecognized                                                    |                            |        |                            | 
|Difference
        between tax allowances and book depreciation |                            | 390    |                            | 
|Other
        timing differences                                |                            | 9,073  |                            | 
|Tax
        effect of losses carried forward                    |                            | 25,718 |                            | 
|                                                                |                            |        |                            | 
|Unrecognized
        deferred tax asset                         |                            | 35,181 |                            | 
|                                                                |                            |        |                            | 
|                                                                |                            |        |                            | 

|                                     | March 31, 2001 |       | March 31, 2002 | 
|------------------------------------ | -------------- | ----- | -------------- | 
|                                     |                |       |                | 
|                                     | £'000          |       | £'000          | 
|Recognized                           |                |       |                | 
|Tax effect of losses carried forward |                | 1,428 |                | 
|                                     |                |       |                | 



The tax effect of losses carried forward includes £16 million acquired tax losses, which arose during the year March 31,  1999 on the acquisition of Crystal Dynamics, Inc. which are available over a number of years.

The other timing differences arise in the USA where they relate mainly to disallowed interest expenses and movements  on provisions for future returns.



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20 Called up Share Capital

|                                                        | March 31, 2001 |       | March 31, 2002 | 
|------------------------------------------------------- | -------------- | ----- | -------------- | 
|                                                        |                |       |                | 
|                                                        | £'000          |       | £'000          | 
|Authorized                                              |                |       |                | 
|March 31, 2001 : 142,500,000 Ordinary Shares of 2p each |                | 2,850 |                | 
|March 31, 2002 : 192,500,000 Ordinary Shares of 2p each |                | —     |                | 
|                                                        |                |       |                | 
|Allotted, called up and fully paid                      |                |       |                | 
|March 31, 2001 : 103,931,470 Ordinary Shares of 2p each |                | 2,079 |                | 
|March 31, 2002 : 139,652,515 Ordinary Shares of 2p each |                | —     |                | 
|                                                        |                |       |                | 

During the year, 980,132 ordinary 2p shares were allotted following the exercise of Eidos options.

In addition 81,607 were allotted in conjunction with the U.S. stock purchase plan. The total consideration received on all  share allotments was £1,245,538 cash (total nominal value £21,183)

During the year there was a 1 for 3 Rights Issue, which led to 34,659,306 shares being allotted to existing shareholders, for  a total consideration of £53,721,924 (total nominal value £693,186). Fees of £2,090,752 were paid to advisors in relation to  this issue, and these were deducted from the share premium account.

21 Stock Options

The Eidos stock option schemes provide for the granting of options to purchase shares to directors and employees of the  Company and its subsidiaries up to a maximum of 10% of the issued share capital of the Company immediately prior to  the day any options are granted. The option price may not be less than the higher of the nominal value of one Eidos share  or the fair market value of an Eidos share on the date the option is granted.

In general the periods of the Approved and Unapproved Scheme options are ten years and seven years respectively. In  addition, certain U.S. employees have been granted options under the U.S. Stock Option Plan and these have a seven  year term.

Options are generally exercisable three years after being granted and are on a one share for one option basis with no  specific performance criteria.

During 1999 the Company launched an Inland
  Revenue approved SAYE Share Scheme (''Sharesave Scheme'') for all U.K. employees.
  Similar schemes were rolled out to employees in the French, German, Japanese
  and Singapore offices during 2000.



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The following options for 2p Ordinary Shares were outstanding at March 31, 2002:

|                                            | Number of shares over which options granted |           | Option exercise price |  |         |                       
|------------------------------------------- | ------------------------------------------- | --------- | --------------------- |  | ------- | ----------------------
|                                            | Post rights Issue                           |           | Post rights Issue     |  |         | Option exercise period
|                                            |                                             |           |                       |  |         |                       
|UK
        Inland Revenue Approved Scheme   |                                             | 55,586    |                       |  | 61.76p  |                       
|                                            |                                             | 111,172   |                       |  | 62.96p  |                       
|                                            |                                             | 21,267    |                       |  | 141.04p |                       
|                                            |                                             | 21,050    |                       |  | 142.48p |                       
|                                            |                                             | 168,379   |                       |  | 154.26p |                       
|                                            |                                             | 164,033   |                       |  | 254.00p |                       
|                                            |                                             | 11,764    |                       |  | 255.00p |                       
|                                            |                                             | 22,232    |                       |  | 298.63p |                       
|                                            |                                             | 181,390   |                       |  | 298.63p |                       
|                                            |                                             | 9,110     |                       |  | 329.21p |                       
|                                            |                                             |           |                       |  |         |                       
|UK
        Inland Revenue Unapproved Scheme |                                             | 1,111,725 |                       |  | 105.24p |                       
|                                            |                                             | 257,930   |                       |  | 140.92p |                       
|                                            |                                             | 201,077   |                       |  | 141.04p |                       
|                                            |                                             | 323,583   |                       |  | 142.48p |                       
|                                            |                                             | 235,232   |                       |  | 154.26p |                       
|                                            |                                             | 139,543   |                       |  | 154.26p |                       
|                                            |                                             | 630,137   |                       |  | 298.63p |                       
|                                            |                                             | 129,855   |                       |  | 329.21p |                       
|                                            |                                             | 866,467   |                       |  | 254.00p |                       
|                                            |                                             | 88,236    |                       |  | 255.00p |                       
|                                            |                                             |           |                       |  |         |                       
|US
        Stock Option Plan                |                                             | 138,454   |                       |  | 254.70c |                       
|                                            |                                             | 111,172   |                       |  | 525.80c |                       
|                                            |                                             | 239,013   |                       |  | 472.76c |                       
|                                            |                                             | 472,500   |                       |  | 361.00c |                       
|                                            |                                             |           |                       |  |         |                       
|                                            |                                             | 5,710,907 |                       |  |         |                       
|                                            |                                             |           |                       |  |         |                       

|                                         | Number |         | Exercise
      price |  | Maturity
      date     | 
|---------------------------------------- | ------ | ------- | -------------------- |  | ----------------------- | 
|                                         |        |         |                      |  |                         | 
|International
        (non US) Sharesave |        | 36,466  |                      |  | 125.93p                 | 
|Scheme                                   |        | 79,948  |                      |  | 160.11p                 | 
|                                         |        | 4,837   |                      |  | 149.31p                 | 
|                                         |        | 62,061  |                      |  | 205.98p                 | 
|                                         |        | 14,314  |                      |  | 263.55p                 | 
|                                         |        | 682     |                      |  | 842.29p                 | 
|                                         |        | 4,324   |                      |  | 403.00 Euro
      cents | 
|                                         |        | 8,775   |                      |  | 403.00 Euro
      cents | 
|                                         |        | 15,803  |                      |  | 198.00p                 | 
|                                         |        | 246,198 |                      |  | 117.00p                 | 
|                                         |        | 7,879   |                      |  | 192.00 Euro
      cents | 
|                                         |        | 29,670  |                      |  | 213.50 Euro
      cents | 
|                                         |        |         |                      |  |                         | 
|                                         |        | 510,957 |                      |  |                         | 
|                                         |        |         |                      |  |                         | 

These options include those granted to directors of the Company, which are also detailed in Item 6.





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22 Share Premium Account, Reserves and Reconciliation of Movements in Shareholders' Funds

The balances as at each balance sheet date and the movements in the periods are set out in the Consolidated Statements  of Changes in Shareholders' Equity.

23 Reconciliation of operating profit/(loss) to net cash outflow/(inflow) from operating activities

|                                                            |       | Year ended
      March 31,
      2000 |       | Year ended
      March 31,
      2001 |         | Year ended
      March 31,
      2002
|----------------------------------------------------------- | ----- | ------------------------------------- | ----- | ------------------------------------- | ------- | -------------------------------------
|                                                            |       |                                       |       |                                       |         |                                      
|                                                            | £'000 |                                       | £'000 |                                       | £'000   |                                      
|Operating
        income/(loss)                             |       | (23,888                               | )     |                                       | (52,973 | )                                    
|Loss
        on disposal of fixed assets                    |       | —                                     |       |                                       | 233     |                                      
|Depreciation
        of tangible fixed assets               |       | 3,150                                 |       |                                       | 2,428   |                                      
|Amortization
        and write off of goodwill              |       | 10,479                                |       |                                       | 10,915  |                                      
|(Increase)/decrease
        in stock                        |       | (7,921                                | )     |                                       | 10,591  |                                      
|(Increase)/decrease
        in debtors                      |       | (20,628                               | )     |                                       | 55,012  |                                      
|Increase/(decrease)
        in creditors                    |       | 10,341                                |       |                                       | (24,318 | )                                    
|                                                            |       |                                       |       |                                       |         |                                      
|Net
        cash inflow/(outflow) from operating activities |       | (28,467                               | )     |                                       | 1,888   |                                      
|                                                            |       |                                       |       |                                       |         |                                      

24 Analysis of Net Funds

|                                         | March 31, 1999 |         | Change in period |  | March 31, 2000 |   | Change in period |         | March 31, 2001 |  | Change in period |   | March 31, 2002 |        
|---------------------------------------- | -------------- | ------- | ---------------- |  | -------------- | - | ---------------- | ------- | -------------- |  | ---------------- | - | -------------- | -------
|                                         |                |         |                  |  |                |   |                  |         |                |  |                  |   |                |        
|                                         | £'000          |         | £'000            |  | £'000          |   | £'000            |         | £'000          |  | £'000            |   | £'000          |        
|Net cash:                                |                |         |                  |  |                |   |                  |         |                |  |                  |   |                |        
|Cash at bank and in hand                 |                | 48,220  |                  |  | 55,229         |   |                  | 103,449 |                |  | (75,094          | ) |                | 28,355 
|Bank overdrafts                          |                | —       |                  |  | (3,366         | ) |                  | (3,366  | )              |  | 2,998            |   |                | (368   
|                                         |                |         |                  |  |                |   |                  |         |                |  |                  |   |                |        
|Total cash and demand debt               |                | 48,220  |                  |  | 51,863         |   |                  | 100,083 |                |  | (72,096          | ) |                | 27,987 
|Loans repayable within one year          |                | —       |                  |  | (77,250        | ) |                  | (77,250 | )              |  | 58,750           |   |                | (18,500
|                                         |                |         |                  |  |                |   |                  |         |                |  |                  |   |                |        
|                                         |                | 48,220  |                  |  | (25,387        | ) |                  | 22,833  |                |  | (13,346          | ) |                | 9,487  
|                                         |                |         |                  |  |                |   |                  |         |                |  |                  |   |                |        
|Short-term deposits and liquid resources |                | —       |                  |  | —              |   |                  | —       |                |  | —                |   |                | —      
|                                         |                |         |                  |  |                |   |                  |         |                |  |                  |   |                |        
|                                         |                | 48,220  |                  |  | (25,387        | ) |                  | 22,833  |                |  | (13,346          | ) |                | 9,487  
|Finance leases                           |                | (515    | )                |  | 314            |   |                  | (201    | )              |  | (184             | ) |                | (385   
|Convertible bonds                        |                | (30,994 | )                |  | 30,994         |   |                  | —       |                |  | —                |   |                | —      
|                                         |                |         |                  |  |                |   |                  |         |                |  |                  |   |                |        
|Net funds                                |                | 16,711  |                  |  | 5,921          |   |                  | 22,632  |                |  | (13,530          | ) |                | 9,102  
|                                         |                |         |                  |  |                |   |                  |         |                |  |                  |   |                |        
|                                         |                |         |                  |  |                |   |                  |         |                |  |                  |   |                |        



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24 Analysis of Net Funds (Continued)

Reconciliation of Net Cash Flow to Movement in Net Funds

|                                                      | Year
      ended
      March 31,
      2000 |         | Year
      ended
      March 31,
      2001 |  | Year
      ended
      March 31,
      2002 |  
|----------------------------------------------------- | ------------------------------------------- | ------- | ------------------------------------------- |  | ------------------------------------------- | -
|                                                      |                                             |         |                                             |  |                                             |  
|                                                      | £'000                                       |         | £'000                                       |  | £'000                                       |  
|Increase/(decrease)
        in cash in period         |                                             | (24,986 | )                                           |  | (13,625                                     | )
|Cash
        outflow from decrease in lease financing |                                             | 370     |                                             |  | 274                                         |  
|Increase
        in term deposits                     |                                             | —       |                                             |  | —                                           |  
|                                                      |                                             |         |                                             |  |                                             |  
|Change
        in net funds resulting from cash flows |                                             | (24,616 | )                                           |  | (13,351                                     | )
|Conversion
        of bonds                           |                                             | 31,248  |                                             |  | —                                           |  
|New
        finance leases                            |                                             | (56     | )                                           |  | (437                                        | )
|Exchange
        rate movements                       |                                             | (655    | )                                           |  | 258                                         |  
|                                                      |                                             |         |                                             |  |                                             |  
|Movement
        in net funds in period               |                                             | 5,921   |                                             |  | (13,530                                     | )
|Net
        funds at beginning of period              |                                             | 16,711  |                                             |  | 22,632                                      |  
|                                                      |                                             |         |                                             |  |                                             |  
|Net
        funds at end of period                    |                                             | 22,632  |                                             |  | 9,102                                       |  
|                                                      |                                             |         |                                             |  |                                             |  

25 Contingent Liabilities

From time to time, the Group is subject to claims and litigation and at the period end there were a small number of claims  outstanding against the Group. Full provision has been made in the Financial Statements where it is considered that the  Group may have a liability. A total of £100,000 has been provided in respect of such claims at March 31, 2002.

In the opinion of the Directors the remaining claims outstanding are not expected to give rise to any significant liability for  the Group.

26 Commitments under Operating Leases

The Group had the following annual commitments under non-cancelable operating leases, analyzed into leases that  expire as follows:

|                             | Land
      and buildings |       | Plant,
      machinery, motor vehicles and computer equipment | 
|---------------------------- | ------------------------ | ----- | ------------------------------------------------------------- | 
|                             |                          |       |                                                               | 
|                             | March
      31, 2001     |       | March
      31, 2002                                          | 
|                             |                          |       |                                                               | 
|                             | £'000                    |       | £'000                                                         | 
|Within
        one year      |                          | 241   |                                                               | 
|In
        two to five years |                          | 582   |                                                               | 
|After
        five years     |                          | 1,351 |                                                               | 
|                             |                          |       |                                                               | 
|                             |                          | 2,174 |                                                               | 
|                             |                          |       |                                                               | 

27 Capital Commitments

As at March 31, 2002 the Group had contracted to make payments, conditional on development milestones, totaling £7.0  million to various licensors and developers involved in providing games software for the Group's use. £5.9 million is  payable within one year and the remaining £1.1 million is due within one to two years. All development contracts can be  terminated without penalties, if development milestones are not achieved.





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28 Pension Commitments

Effective from January 1, 1997 the Group has operated a defined contribution private pension plan. The assets of the plan  are held separately from those of the Group in an independently administered fund. Defined contributions are paid to the  plan and charged to income so as to spread the cost of pensions over the employees' and directors' working lives within  the Group. Contributions paid by the Group during the current year were £357,000 (2001: £428,000, 2000: £498,000). At the  year end no contributions were outstanding.

In addition, one director is a member of the Core Design Pension Scheme. This is also a defined contribution scheme.  Contributions paid by the Group during the current year were £30,000 (2001: £27,9000, 2000: £25,950). No contributions  were outstanding at the year end.

All overseas pension arrangements are also of a defined contribution nature. Contributions for the year were £401,000  (2001: £328,000, 2000: £334,000).

In October 2001, the UK Government made it
  compulsory for most companies in the U.K. employing over 5 members of staff
  to give their staff access to Stakeholder pensions. Eidos plc has reviewed its
  Group Personal Pension Plan and implemented a number of minor changes (such
  as lowering the entrance age) to ensure that the Plan is Stakeholder Exempt
  and no further action was needed to comply.

29 Related Party disclosures

In relation to material transactions, the Group has not identified any parties who are able to negotiate more favorable  terms than would have been available to any other independent party on an arm's length basis.

Fiscal 2002

|(a) | During the year the Group paid £6.1 million (2001: £7.1 million) to its associated companies as royalties and for development of games for the Group.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|   

|(b) | In July 1999 Eidos acquired a 75% stake in Proein SL. In the year to March 31, 2002 Eidos sold games to Proein SL totalling £1.1 million (2001: £1.2 million). These games were all sold on an arm's length basis. In addition in the same period Eidos paid £3.7 million (2001: £1.0 million) to Pyro Studios SL (in which Eidos acquired a 25% stake) as royalties for the development of games for Eidos. At March 31, 2002 Eidos was owed £105,000 (2001: £159,000) by Proein SL, and owed Pyro Studios SL £51,000 (2001: £139,000).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

|(c) | In June 2001 Eidos took its stake in
      Ion Storm to 89% (see Note 30). In the year to March 31, 2002 Eidos paid
      £5.6 million to Ion Storm as advances for the development of games
      for Eidos. At March 31, 2002, Ion Storm owed Eidos £4.0 million.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

Fiscal 2001

|(a) | During the year the Group paid £7.1 million (2000: £6.1 million) to its associated companies as royalties and advances on games being developed for the Group.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

|(b) | In July 1999 the Group acquired a 75% stake in Proein SL. In the year to March 31, 2001 the Group sold games to Proein SL for a total of £1.2 million (2000: £3.9 million) after provisions. These games were all sold on an arm's length basis. In addition in the same period the Group paid £1.0 million (2000: £0.8 million) to Pyro Studios SL (in which the Group acquired a 25% stake) as royalties and for the development of games for the Group. At March 31, 2001 the Group was owed £159,000 (2000: £1.7 million) by Proein SL (via a third party distributor) and owed Pyro Studios SL £139,000 (2000: £326,000).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

|(c) | On December 15, 2000, the business and assets of Glassworks Productions Ltd, a subsidiary undertaking of the Group, were sold to Glassworks Post Productions Ltd, a
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   



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| | subsidiary of Das Werks AG, for £700,000. Hector Macleod, a Director of
Glassworks Productions Ltd, is also a Director and minority shareholder of Glassworks
Post Productions Ltd. On December 21, 2000 Glassworks Productions Ltd changed
its name to Eidos Post Productions Ltd.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As reported in fiscal 2000

|(a) | Jeremy Heath-Smith, a director and executive officer of the Group, is a member of the Core Design Pension Fund. The Fund's assets include sole ownership of the premises occupied during part of the year by Core Design Limited. The rent paid by Core Design Limited to the pension fund is £40,000 per annum.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

|(b) | The Group paid £1.0 million to Eidopt AS (50% holding) to fund its research into a games storage device.
|--- | --------------------------------------------------------------------------------------------------------
|   

|(c) | Eidos Technologies Limited has granted a license of certain of its video compression intellectual property to Forbidden Technologies plc. In return, the Group will receive a royalty stream on Forbidden Technologies' products, which incorporate the technology licensed. Mr. Streater, a former executive director of Eidos plc, and Mr. Steel, a current non-executive director of Eidos plc, are both directors of Forbidden Technologies plc. Mr. Streater left the Group to found Forbidden Technologies plc and therefore was no longer involved with the Group when the license was granted. Mr. Steel took no part in the discussions on either side.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

The Group has taken advantage of the exemption in Financial Reporting Standard No 8 in respect of subsidiaries that are  greater than 90% subsidiaries.

All inter-company transactions are required to be on an arm's length basis.

30 Derivatives and Other Financial Instruments

The Group is exposed to certain market risks arising from transactions in the normal course of business and financial  instruments used to finance the Group's operations. The main risks arising are foreign currency risk and interest rate risk.  The Group's treasury policy is to manage financial risks that arise in relation to underlying business needs

The numerical disclosures in this note deal with financial liabilities as defined by Financial Reporting Standard 13:  Derivatives and Other Financial Instruments: Disclosures (FRS 13). Certain financial assets such as investments in  subsidiary, joint and associated undertakings are excluded from the scope of these disclosures.

As permitted by FRS13, short-term debtors and creditors have also been excluded from the disclosure, other than the  currency disclosures.

Interest rate risk profile of financial liabilities

The interest rate and currency profile of the Group's financial assets and liabilities at March 31, 2002 was as follows:

|                                          | Sterling |        | US Dollar |  | Euro  |  | Singapore Dollar |       | Yen   |  | Total | 
|----------------------------------------- | -------- | ------ | --------- |  | ----- |  | ---------------- | ----- | ----- |  | ----- | 
|                                          |          |        |           |  |       |  |                  |       |       |  |       | 
|                                          | £'000    |        | £'000     |  | £'000 |  | £'000            |       | £'000 |  | £'000 | 
|Cash and liquid resources – floating rate |          | 43,454 |           |  | 889   |  |                  | 6,107 |       |  | 183   | 
|Floating rate debt                        |          | —      |           |  | —     |  |                  | —     |       |  | —     | 
|                                          |          |        |           |  |       |  |                  |       |       |  |       | 
|                                          |          | 43,454 |           |  | 889   |  |                  | 6,107 |       |  | 183   | 
|                                          |          |        |           |  |       |  |                  |       |       |  |       | 





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The corresponding interest rate and currency profile of the Group's financial assets and liabilities at March 31, 2001 was  as follows:

|                                          | Sterling |         | US Dollar |  | Euro  |  | Singapore Dollar |       | Japanese Yen |  | Total | 
|----------------------------------------- | -------- | ------- | --------- |  | ----- |  | ---------------- | ----- | ------------ |  | ----- | 
|                                          |          |         |           |  |       |  |                  |       |              |  |       | 
|                                          | £'000    |         | £'000     |  | £'000 |  | £'000            |       | £'000        |  | £'000 | 
|Cash and liquid resources – floating rate |          | 14,871  |           |  | 5,238 |  |                  | 7,793 |              |  | 164   | 
|Floating rate debt                        |          | (18,868 | )         |  | —     |  |                  | —     |              |  | —     | 
|                                          |          |         |           |  |       |  |                  |       |              |  |       | 
|                                          |          | (3,997  | )         |  | 5,238 |  |                  | 7,793 |              |  | 164   | 
|                                          |          |         |           |  |       |  |                  |       |              |  |       | 

Cash deposits and liquid resources comprise
  of cash deposits placed on money markets for periods of up to six months. Floating
  rate debt comprises of bank borrowings bearing interest at rates based on inter-bank
  interest rates.

Currency exposures

The Group's objective in managing the currency exposures is to minimize gains and losses arising in its overseas  subsidiaries. The Company provides working capital to its overseas subsidiaries in their functional currencies and hedges  its exposure in accordance with Company policy.

The table below shows the Group's currency exposures, i.e. those transactional exposures that give rise to the net  currency gains and losses recognized in the profit and loss account. These exposures were as follows:

|                                               | Net
      foreign currency monetary assets/(liabilities) |       
|---------------------------------------------- | -------------------------------------------------------- | ------
|                                               |                                                          |       
|                                               | U.S.
      dollar                                        |       
|                                               |                                                          |       
|                                               | £'000                                                    |       
|Functional
        currency of group operation |                                                          |       
|Sterling                                       |                                                          | 4,398 
|US
        Dollar                              |                                                          | —     
|Euro                                           |                                                          | —     
|Yen                                            |                                                          | (53   
|                                               |                                                          |       
|at
        March 31, 2002                      |                                                          | 4,345 
|                                               |                                                          |       
|at
        March 31, 2001                      |                                                          | 49,837
|                                               |                                                          |       

Maturity of financial liabilities

The maturity profile of the Group's financial liabilities at March 31, 2002 were as follows:

|                    | 2001  |        | 2002  | 
|------------------- | ----- | ------ | ----- | 
|                    |       |        |       | 
|                    | £'000 |        | £'000 | 
|In one year or less |       | 18,868 |       | 
|                    |       |        |       | 

Borrowing facilities

The undrawn committed facilities of the Group at March 31, 2002, mature as follows:

|                | 2001  |        | 2002  | 
|--------------- | ----- | ------ | ----- | 
|                |       |        |       | 
|                | £'000 |        | £'000 | 
|Within one year |       | 31,500 |       | 





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Guarantees

The company has given a letter of guarantee to secure a committed borrowing facility of £0.8 million for a subsidiary  undertaking.

Fair values

Set out below is a comparison by category of book values and fair values of the Group's financial assets and liabilities at  March 31, 2002.

|                                                                                       | 2001             |         | 2002             | 
|-------------------------------------------------------------------------------------- | ---------------- | ------- | ---------------- | 
|                                                                                       |                  |         |                  | 
|                                                                                       | Book
      value |         | Fair
      value | 
|                                                                                       |                  |         |                  | 
|                                                                                       | £'000            |         | £'000            | 
|Primary
        financial instruments held or issued to finance the Group's operations |                  |         |                  | 
|Borrowing
        falling due within one year                                          |                  | (18,868 | )                | 
|                                                                                       |                  |         |                  | 
|Financial
        assets:                                                              |                  |         |                  | 
|Investments                                                                            |                  | 5,103   |                  | 
|Cash                                                                                   |                  | 28,355  |                  | 

The Group disposed of all listed investments during the year. All other investments have been valued at cost, as this is not  significantly different from their fair values.

Gains and losses on hedges

The Group enters into forward foreign currency contracts to eliminate the currency exposures that arise on trading  balances denominated in foreign currencies. Changes in the fair value of instruments used to hedge foreign currency  monetary assets and liabilities are recognized in the financial statements in the hedged periods. There were no  unrecognized gains or losses at the year end, as the Group had no open derivatives at March 31, 2001 and 2002.

31 Acquisitions

On 27 June 2001 the Group took its holding in Ion Storm LP to 89.6% of the issued partnership units for a nominal sum.  The 89.6% holding has been built up over a series of step acquisitions for which the fair value of the total consideration  paid was $536.

In accordance with FRS2, the results of Ion Storm LP have been consolidated from 1 July 2001 as the Directors believe that  this was the point at which control of the entity effectively passed to the Group. The net loss recognised in the period  relating to Ion Storm LP was $5,918,222.



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The following table sets out the book values of the identifiable assets and liabilities acquired and their fair value to the  group.

|               | Book Value |        | Accounting policy alignments |  | Other fair value adjustments |   | Fair value |        | Sterling equivalent at 27 June, 2001 | 
|-------------- | ---------- | ------ | ---------------------------- |  | ---------------------------- | - | ---------- | ------ | ------------------------------------ | 
|               |            |        |                              |  |                              |   |            |        |                                      | 
|               | $000       |        | $000                         |  | $000                         |   | $000       |        | £000                                 | 
|Fixed Assets   |            |        |                              |  |                              |   |            |        |                                      | 
|Tangible       |            | 2,158  |                              |  | —                            |   |            | (1,346 | )                                    | 
|Current Assets |            |        |                              |  |                              |   |            |        |                                      | 
|Debtors        |            | 146    |                              |  | (104                         | ) |            | —      |                                      | 
|Cash           |            | 527    |                              |  | —                            |   |            | —      |                                      | 
|               |            |        |                              |  |                              |   |            |        |                                      | 
|Total Assets   |            | 2,831  |                              |  | (104                         | ) |            | (1,346 | )                                    | 
|Creditors      |            | (2,091 | )                            |  | 1,763                        |   |            | (2,302 | )                                    | 
|               |            |        |                              |  |                              |   |            |        |                                      | 
|Net Assets     |            | 740    |                              |  | 1,659                        |   |            | (3,648 | )                                    | 
|               |            |        |                              |  |                              |   |            |        |                                      | 
|Goodwill       |            |        |                              |  |                              |   |            |        |                                      | 
|               |            |        |                              |  |                              |   |            |        |                                      | 
|               |            |        |                              |  |                              |   |            |        |                                      | 
|               |            |        |                              |  |                              |   |            |        |                                      | 

The accounting policy alignment related to the reversal of various debtor and creditor balances held in respect of other  Group companies prior to acquisition.

The fair value adjustments comprised the write off of certain leasehold improvements in a vacant property of $1,346,000  and an accrual of $2,302,000 for future rental commitments at the same property.

Net cash outflows in respect of the acquisition comprised:

|                                                                   |      |     |      | Sterling equivalent at 27 June, 2001 |    
|------------------------------------------------------------------ | ---- | --- | ---- | ------------------------------------ | ---
|                                                                   |      |     |      |                                      |    
|                                                                   | $000 |     | £000 |                                     
|Cash consideration                                                 |      | —   |      |                                      | —  
|Cash at bank and in hand acquired                                  |      | 527 |      |                                      | 371
|                                                                   |      |     |      |                                      |    
|Net inflow of cash and cash equivalents in respect of the purchase |      | 527 |      |                                      | 371
|                                                                   |      |     |      |                                      |    

The total consideration of $536 remained outstanding at March 31, 2002.



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32 Summary of Major Differences between Generally Accepted Accounting Principles in the United Kingdom and  the United States

The consolidated financial statements are
  prepared in accordance with accounting principles generally accepted in the
  United Kingdom. Such principles differ in certain respects from US GAAP.

Application of US GAAP as described below
  has the following effect on the Group's consolidated net income/(loss) and shareholders'
  equity:

|                                                             | Year
      ended 
      March 31, 2000 |        | Year
      ended 
      March 31, 2001 |  | Year
      ended 
      March 31, 2002 |   
|------------------------------------------------------------ | -------------------------------------- | ------ | -------------------------------------- |  | -------------------------------------- | --
|                                                             |                                        |        |                                        |  |                                        |   
|                                                             | £'000                                  |        | £'000                                  |  | £'000                                  |   
|Net
        income/(loss) reported under UK GAAP             |                                        | 25,203 |                                        |  | (97,329                                | ) 
|US
        GAAP adjustments:                                 |                                        |        |                                        |  |                                        |   
|Amortization
        of goodwill                             |                                        | (758   | )                                      |  | (333                                   | ) 
|Loss
        on sale or termination of operations            |                                        | 2,007  |                                        |  | —                                      |   
|Full
        consolidation of joint venture company          |                                        | (129   | )                                      |  | 108                                    |   
|Tax
        effects of US GAAP adjustments                   |                                        | (1,993 | )                                      |  | —                                      |   
|Revenue
        recognition                                  |                                        | (938   | )                                      |  | —                                      |   
|Deferred
        bank charges                                |                                        | —      |                                        |  | 1,250                                  |   
|Provisions
        against investments                       |                                        | —      |                                        |  | —                                      |   
|                                                             |                                        |        |                                        |  |                                        |   
|Net
        income/(loss) in accordance with US GAAP         |                                        | 23,392 |                                        |  | (96,304                                | ) 
|                                                             |                                        |        |                                        |  |                                        |   
|Earnings/(loss)
        per share in accordance with US GAAP |                                        |        |                                        |  |                                        |   
|Basic                                                        |                                        | 24.1   | p                                      |  | (83.6                                  | )p
|Diluted                                                      |                                        | 22.1   | p                                      |  | (83.6                                  | )p

|                                                         | March
      31, 2001 |         | March
      31, 2002 | 
|-------------------------------------------------------- | -------------------- | ------- | -------------------- | 
|                                                         |                      |         |                      | 
|                                                         | £'000                |         | £'000                | 
|Shareholders'
        equity reported under UK GAAP      |                      | 30,617  |                      | 
|US
        GAAP adjustments                              |                      |         |                      | 
|Goodwill                                                 |                      | 20,746  |                      | 
|Write
        off of in process research and development |                      | (2,368  | )                    | 
|Amortisation
        of goodwill                         |                      | (18,243 | )                    | 
|Unrealized
        appreciation on investments           |                      | 14,185  |                      | 
|Full
        consolidation of joint venture company      |                      | (19     | )                    | 
|Equity
        accounting trade investment               |                      | 204     |                      | 
|Revenue
        recognition                              |                      | (938    | )                    | 
|Deferred
        bank charges                            |                      | 1,250   |                      | 
|Tax
        effect of US GAAP adjustments                |                      | (4,236  | )                    | 
|                                                         |                      |         |                      | 
|Shareholders'
        equity in accordance with US GAAP  |                      | 41,198  |                      | 
|                                                         |                      |         |                      | 
|                                                         |                      |         |                      | 

(1) Purchase Accounting

All of the Group's acquisitions have been accounted for using purchase accounting for both UK and US GAAP. Under UK  GAAP, in-process research and development costs are not identified as an acquired asset in the purchase price but rather  are capitalized as goodwill and amortized over the expected useful life. US GAAP requires the identification of in-process  research and development as a component of the purchase price allocation. Such amounts in which technological  feasibility has not been established and that have no alternative future use must be



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charged as en expense at the time of acquisition. In accordance with US GAAP,
the Group has identified £24.2 million in the aggregate as in-process research
and development, all of which was expensed in the periods in which the related
acquisitions were completed (1996: £8.2 million, 1997: £13.8 million,
and 1999: £2.4 million).

The Group has recorded the excess of the fair value of consideration paid over the fair value of identifiable net assets  acquired as goodwill, for US GAAP purposes in connection with various acquisitions. For the years ended March 31, 2000,  2001 and 2002, goodwill is amortized over 3 years for both UK and US GAAP purposes as 3 years is the estimated useful  life due to the rapid pace of change in the industry.

In July 2001, the Financial Accounting Standards Board (''FASB'') issued Statement of Financial Accounting Standard  (''SFAS'') No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141  requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as  well as all purchase method business combinations completed after June 30, 2001. SFAS No. 141 also specifies criteria  intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart  from goodwill, noting that any purchase price allocable to an assembled workforce may not be accounted for separately.  SFAS No. 142 will require that goodwill and intangible assets with indefinite useful lives no longer be amortized, but  instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142. SFAS No. 142 will also  require that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their  estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, Accounting for the Impairment  of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.

The Group is required to adopt the provisions of SFAS No. 141 immediately and SFAS No. 142 is effective for fiscal years  beginning after December 15, 2001. Furthermore, any goodwill and any intangible asset determined to have an indefinite  useful life that are acquired in a purchase business combination completed after June 30, 2001 will not be amortized, but  will continue to be evaluated for impairment in accordance with the appropriate pre-SFAS No. 142 accounting literature.  Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 will continue to be  amortized prior to the adoption of SFAS No. 142.

Under UK GAAP, purchased goodwill in respect of acquisitions before 1 January 1998 was written off to reserves in the  year of acquisition. Purchased goodwill in respect of acquisitions since 1 January 1998 is capitalized in accordance with  the requirements of FRS 10 Goodwill and Intangible Assets. Positive goodwill is amortized to nil in equal installments  over the estimated useful life. Upon subsequent disposal or closure of an acquired business, any goodwill previously  taken directly to shareholders' equity is reflected in the income or loss on disposal.

For acquisitions prior to 1 April 1998, the benefit of acquired tax losses, as they are recognized in periods subsequent to  acquisition are credited to income under UK GAAP and credited to goodwill for US GAAP. There is no difference in  treatment for acquisitions subsequent to 1 April 1998.

(2) Consolidation and Accounting for Investments in Common Stock

Certain investments made by the Group during the year ended March 31, 2000 have been reported differently under UK  GAAP and US GAAP due to the respective definitions of a subsidiary, joint venture, associate and investment.

Under UK GAAP, definitions of subsidiary, joint venture, associate and investment are broadly based upon control, to a  certain extent irrespective of the percentage of shares held. Under US GAAP, the percentage of shares held is the primary  basis on which an investment is categorized as a subsidiary, joint venture, associate and investment. Strong evidence  must be present in



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order to not consolidate an entity with a greater than 50% shareholding or to
equity account for an investment of greater than 20% shareholding.

During the year ended March 31, 2000, the
  Group acquired a 75% interest in Proein SL. Because of the nature of the contractual
  joint control arrangements, this investment is considered a joint venture in
  accordance with UK GAAP and is accounted for using the equity method of accounting.
  For US GAAP purposes, Proein SL has been treated as a subsidiary and consolidated.
  While on a line-by-line basis, the statement of operations and balance sheets
  differs under UK and US GAAP, in reconciling net income and shareholders' equity
  from UK to US GAAP, there is only one difference relating to the treatment of
  the provision for unsold inventory. The Group is one of Proein SL's main suppliers.
  At each year-end, adjustments are made to eliminate the Group's profit on inventory
  sold to Proein SL that remains unsold. Adjustments are made for both UK and
  US GAAP, however the adjustment is 75% for UK GAAP and 100% for US GAAP.

The Group, in a series of acquisitions, acquired a 26% interest in Top Cow Productions during the years ended March 31,  1999 and 2000. Under UK GAAP, this was considered an investment and not an associate that would be accounted for  using the equity method because although the Group had a participating interest (defined as greater than 20%), it did not  exercise significant influence over the operating and financial policies of Top Cow Productions. Under US GAAP, an  investment of over 20% of the voting stock of an investee leads to the presumption that an investor has the ability to  exercise significant influence over the investee. In accordance with US GAAP, the investment in Top Cow Productions  was accounted for using the equity method.

(3) Equity securities

Under UK GAAP, available for sale securities
  are stated at cost less provision for any impairment in value. Under US GAAP,
  these securities are marked to market with any unrealized gains and losses excluded
  from earnings and reported in a separate component of shareholders' equity.
  In prior years, the Group had a significant investment (15%) in a technology
  company listed on the Norwegian stock exchange (Opticom). This investment was
  not marked to market at March 31, 1999 because the Board concluded that the
  price quoted on the Norwegian stock exchange was not representative of fair
  value. This was because of the stage of development of the company and the size
  of the holding in relation to normal trading volumes. Accordingly the investment
  was carried at cost for US accounting purposes. During March 2000, the Group
  sold a large proportion of its shareholding (at a discount to then quoted market
  price). The remaining holding was being marked to market under US GAAP until
  its disposal during the current financial year.

(4) Revenue recognition

Under UK GAAP, license income and advance
  royalties are recognized when contractually due and non-refundable. Under US
  GAAP, SEC Staff Accounting Bulletin No. 101 requires the deferral of non-refundable,
  up-front fees unless the up-front fees are in exchange for products delivered
  or services performed that represent the culmination of a separate earnings
  process. During the year ended March 31, 2000, the Group received non-refundable
  advance royalties which met the criteria for revenue recognition under UK GAAP
  but not under US GAAP. Accordingly, under US GAAP these advance royalties had
  been deferred but were recognized in the current year as the associated royalties
  were actually earned. There were no such royalties in fiscal years 2001 and
  2002.



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(5) Deferred taxation

The tax effects of temporary differences that give rise to deferred taxes are:

|                                                  | March
      31, 2001 |         | March
      31, 2002 | 
|------------------------------------------------- | -------------------- | ------- | -------------------- | 
|                                                  |                      |         |                      | 
|                                                  | £'000                |         | £'000                | 
|Net
        operating loss carry forward          |                      | 26,986  |                      | 
|Capital
        loss on investment in Express.Com |                      | 10,798  |                      | 
|Other                                             |                      | 9,623   |                      | 
|                                                  |                      |         |                      | 
|                                                  |                      | 47,407  |                      | 
|Valuation
        allowance                       |                      | (45,979 | )                    | 
|                                                  |                      |         |                      | 
|Deferred
        tax asset                        |                      | 1,428   |                      | 
|Unrealized
        appreciation of investments    |                      | (4,236  | )                    | 
|                                                  |                      |         |                      | 
|Net
        deferred tax asset/(liability)        |                      | (2,808  | )                    | 
|                                                  |                      |         |                      | 

As of March 2002 the Group had federal operating loss carry forwards of £67.2 million all of which will expire between  2012 to 2022. There were no federal losses with an unlimited carry forward period. Additionally the Group has local  operating loss carry forwards of £31.8 million, expiring between 2003 and 2012.

The deferred tax asset in relation to Express.com
  relates to the £35.4 million write down of this investment. At March 31,
  2002, the capital loss carryforward is £28.4 million. Capital losses
  in relation to this have unlimited carry forward.

As of March 31, 2002, management of the Company
  has evaluated the positive and negative evidence as required by UK and US GAAP,
  impacting the realizability of the deferred tax assets. Accordingly, the deferred
  tax assets have been partially reserved. Management believes that it is more
  likely than not that the net deferred tax asset will be realized.

Subsequently recognized tax benefits relating to the valuation allowance for deferred tax assets as of March 31, 2002 will  be allocated as follows:

|                                                                                  | £'000 |       
|--------------------------------------------------------------------------------- | ----- | ------
|                                                                                  |       |       
|Income tax benefit that would be reported in the Consolidated Statement of Income |       | 44,837
|Goodwill and other non-current intangible assets                                  |       | 766   
|                                                                                  |       |       
|                                                                                  |       | 45,603
|                                                                                  |       |       

The net change in the valuation allowance
  for the year was a decrease of £0.4 million (2001: increase of £29.3
  million).

Under UK GAAP, deferred tax assets are classified
  under Debtors, or in some circumstances, net off deferred tax liabilities. Under
  US GAAP, deferred tax liabilities and assets are classified as current or non-current
  based on the classification of the related asset or liability for financial
  reporting. Deferred tax assets related to carry forwards are classified according
  to the expected reversal date of the carry forward.

As at March 31, 2002, the Group does not believe
  that there was any material deferred tax liability arising from the excess of
  the value of its subsidiaries, joint ventures or associates over their base
  costs for tax purposes.





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Under UK GAAP, the share of tax incurred by joint ventures is included in the tax on loss on ordinary activities. Under US  GAAP, this tax would be included as part of equity in loss of affiliates within income before income taxes.

(6) Deferred Bank Charges

Under the terms of an agreement with the Royal
  Bank of Scotland, certain fees became payable on the variation of the Group's
  banking facility which took place after the March 31, 2001 year end. Since these
  fees were both known and quantifiable at the year end, they were accrued in
  full in the year, under UK GAAP. Under US GAAP however, any such fees relating
  to the early extinguishment of debt must be recognised in the period of extinguishment.
  Consequently, these fees were expensed during the year to March 31, 2002 under
  US GAAP.

(7) Provision against Investments

As discussed under (2) Consolidation and accounting for investments in common stock, the carrying value of the Groups'  investment in Top Cow was provided against in full.

(8) Consolidated Statements of Cashflow

The consolidated statements of cashflow prepared
  in accordance with Financial Reporting Standard No. 1 (revised) present substantially
  the same information as that required under US GAAP. However, under US GAAP
  the cashflows of one of the joint ventures in Spain (which is consolidated as
  a subsidiary under US GAAP and equity accounted under UK GAAP) should be added.
  This has the effect of decreasing the net cash inflow by £169,000. In
  addition, under US GAAP, there are certain differences from UK GAAP with regard
  to classification of items within the cashflow statement and with regard to
  the definition of cash and cash equivalents.

Under UK GAAP, cashflow is presented separately
  for operating activities, returns on investments and servicing of finance, taxation,
  capital expenditure and financial investment, acquisitions and disposals, management
  of liquid resources and financing activities. Under US GAAP cashflow is presented
  separately for operating activities, investing activities and financing activities.
  Cashflow from taxation and returns on investments and servicing of finance would,
  with the exception of dividends paid and costs of financing, be included as
  operating activities under US GAAP. The payments of dividends and costs of financing
  would be included under financing activities under US GAAP.

Under US GAAP, cash and cash equivalents do
  not include bank overdrafts, as is the case under UK GAAP. Under US GAAP such
  bank overdrafts are presented within financing activities.

Under US GAAP, capital expenditure and financial
  investment and acquisitions and disposals are included in investing activities.

Set out below, for illustrative purposes,
  is a summary consolidated statement of cashflow under US GAAP.

|                                                             | Year
      ended March 31, 2000 |         | Year
      ended March 31, 2001 |  | Year
      ended March 31, 2002 |  
|------------------------------------------------------------ | ------------------------------- | ------- | ------------------------------- |  | ------------------------------- | -
|                                                             |                                 |         |                                 |  |                                 |  
|                                                             | £'000                           |         | £'000                           |  | £'000                           |  
|Cash
        flow from operating activities                  |                                 | (44,722 | )                               |  | (13,609                         | )
|Cash
        flow from investing activities                  |                                 | 19,144  |                                 |  | (873                            | )
|Cash
        flow from financing activities                  |                                 | 80,572  |                                 |  | 19,390                          |  
|                                                             |                                 |         |                                 |  |                                 |  
|Net
        increase/(decrease) in cash and cash equivalents |                                 | 54,994  |                                 |  | 4,908                           |  
|                                                             |                                 |         |                                 |  |                                 |  





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(9) Accounting for stock-based compensation

The Group has adopted only the disclosures required by SFAS No. 123, Accounting for Stock-Based Compensation, and  will continue to recognize stock-based compensation expenses under APB Opinion No. 25. Accounting for Stock Issued to  Employees. As required, pro-forma net income/(loss), earnings/(loss) per share and weighted-average grant-date fair  value of options granted, based on SFAS 123's fair value methodology are disclosed below. The fair values of options  were determined assuming an expected average life of three years (three or four years for the Sharesave Schemes) and  risk-free interests ranging from 4.9% to 5.1%. Furthermore, volatility of 75% (2001: 75%, 2000: 186%) and dividend yield of  nil were assumed. The stock-based compensation expense is recognized over the vesting period which is generally three  years.

|                                                        | Year
      ended March 31, 2000
      (restated) |        | Year
      ended March 31, 2001
      (restated) |  | Year
      ended March 31, 2002 |  
|------------------------------------------------------- | ------------------------------------------------ | ------ | ------------------------------------------------ |  | ------------------------------- | -
|                                                        |                                                  |        |                                                  |  |                                 |  
|In
        thousands, except per share data             | £'000                                            |        | £'000                                            |  | £'000                           |  
|Income/(loss)
        for the period under US GAAP      |                                                  | 23,392 |                                                  |  | (96,304                         | )
|Adjustment:                                             |                                                  |        |                                                  |  |                                 |  
|Stock-based
        compensation expense under SFAS 123 |                                                  | (1,185 | )                                                |  | (1,688                          | )
|                                                        |                                                  |        |                                                  |  |                                 |  
|Pro
        forma income/(loss) for the period          |                                                  | 22,207 |                                                  |  | (97,992                         | )
|                                                        |                                                  |        |                                                  |  |                                 |  
|Pro
        forma earnings/(loss) per share             |                                                  | 16.8p  |                                                  |  | (85.0p                          | )
|                                                        |                                                  |        |                                                  |  |                                 |  

|                                                           | Eidos stock option schemes (restated) |      
|---------------------------------------------------------- | ------------------------------------- | -----
|                                                           |                                       |      
|                                                           | £                                     |      
|Weighted-average grant-date fair value of options granted: |                                       |      
|Year ended March 31, 2000                                  |                                       | £2.20
|Year ended March 31, 2001                                  |                                       | £1.94
|Year ended March 31, 2002                                  |                                       | £1.33

The stock based compensation figures have been restated to reflect the 1 for 3 Rights Issue that occurred during the year  ended March 31, 2002

33 Companies Act 1985

The consolidated financial statements do not constitute ''statutory accounts'' within the meaning of the Companies Act  1985 (United Kingdom) for any of the periods presented. Statutory accounts for the periods ended March 31, 2001 and  2000 have been filed with the United Kingdom's Registrar of Companies. The auditor has reported on these accounts. The  reports were unqualified and did not contain statements under Section 237 (2) or (3) of the Act. For the current financial  period, the Group will prepare and file consolidated financial statements for a fifteen month period ending June 30, 2002.

These consolidated financial statements exclude certain parent company statements and other information required by  the Companies Act 1985, however, they include all material disclosures required by generally accepted accounting  principles in the United Kingdom including those Companies Act 1985 disclosures relating to the statement of income  and balance sheet items.



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ITEM 9 – THE OFFER
  AND THE LISTING

The Offer and Listing Details

The Ordinary Shares were included on the Unlisted Securities Market of the London Stock Exchange from December 1990  until October 1995 when they were included on the Official List of the London Stock Exchange under the symbol ''EID.'' On  December 20, 1996, 3,000,000 Ordinary (10p) Shares were listed on the Nasdaq National Market in the form of American  Depositary Shares evidenced by American Depositary Receipts under the symbol ''EIDSY.'' Morgan Guaranty Trust  Company of New York is the Depositary and transfer agent for the ADSs.

There was a five-for-one stock split on January 25, 2000. This split affected both Ordinary Shares and ADSs.

A 1 for 3 rights issue was announced on May 31, 2001, which was ratified by shareholders on June 18, 2001 and closed on  July 12, 2001.

Figures in this section have been adjusted
  for both the five for one stock split and the 1 for 3 rights issue.

The following table sets forth, for the periods indicated, the period high and low middle market quotation for the Ordinary  Shares as derived from the London Stock Exchange Daily Official List.

Ordinary Shares Pricing Information

|High
        and Low Trading Prices in Past Five Fiscal Years | High |        | Low | 
|------------------------------------------------------------- | ---- | ------ | --- | 
|                                                              |      |        |     | 
|Fiscal
        1998                                           |      | £2.12  |     | 
|Fiscal
        1999                                           |      | £3.66  |     | 
|Fiscal
        2000                                           |      | £11.44 |     | 
|Fiscal
        2001                                           |      | £4.94  |     | 
|Fiscal
        2002 (up to March 31, 2002)                    |      | £2.88  |     | 

|High
        and Low Trading Prices in Past Nine Fiscal Quarters |      |       |     |  |       | 
|---------------------------------------------------------------- | ---- | ----- | --- |  | ----- | 
|                                                                 | High |       | Low | 
|                                                                 |      |       |     | 
|Quarter
        ended                                            |      |       |     |  |       | 
|June
        30, 2000                                            |      | £4.94 |     |  | £2.34 | 
|September
        30, 2000                                       |      | £4.81 |     |  | £3.05 | 
|December
        31, 2000                                        |      | £2.85 |     |  | £1.60 | 
|March
        31, 2001                                           |      | £2.63 |     |  | £1.81 | 
|June
        30, 2001                                            |      | £2.88 |     |  | £1.50 | 
|September
        30, 2001                                       |      | £2.82 |     |  | £1.50 | 
|December
        31, 2001                                        |      | £2.64 |     |  | £1.54 | 
|March
        31, 2001                                           |      | £1.90 |     |  | £1.29 | 
|June
        30, 2002                                            |      | £1.70 |     |  | £1.16 | 

|Monthly
        High and Low Trading Prices in Last Six Months | High |       | Low | 
|-------------------------------------------------------------- | ---- | ----- | --- | 
|                                                               |      |       |     | 
|January
        2002                                           |      | £1.90 |     | 
|February
        2002                                          |      | £1.73 |     | 
|March
        2002                                             |      | £1.46 |     | 
|April
        2002                                             |      | £1.48 |     | 
|May
        2002                                               |      | £1.70 |     | 
|June
        2002                                              |      | £1.52 |     | 
|July
        2002                                              |      | £1.41 |     | 
|August
        2002                                            |      | £1.32 |     | 

On August 31, 2002, there were 139,767,195 Ordinary Shares held by 6,893 record holders.





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American Depositary Shares Pricing Information(1)

|High
        and Low Trading Prices in Past Five Fiscal Years | High |        | Low | 
|------------------------------------------------------------- | ---- | ------ | --- | 
|                                                              |      |        |     | 
|Fiscal
        1998                                           |      | $4.00  |     | 
|Fiscal
        1999                                           |      | $6.49  |     | 
|Fiscal
        2000                                           |      | $20.50 |     | 
|Fiscal
        2001                                           |      | $8.31  |     | 
|Fiscal
        2002                                           |      | $4.99  |     | 
|                                                              |      |        |     | 

|High
        and Low Trading Prices in Past Nine Fiscal Quarters | High |       | Low | 
|---------------------------------------------------------------- | ---- | ----- | --- | 
|                                                                 |      |       |     | 
|Quarter
        ended                                            |      |       |     | 
|June
        30, 2000                                            |      | $8.31 |     | 
|September
        30, 2000                                       |      | $8.00 |     | 
|December
        31, 2000                                        |      | $4.81 |     | 
|March
        31, 2001                                           |      | $4.38 |     | 
|June
        30, 2001                                            |      | $4.99 |     | 
|September
        30, 2001                                       |      | $4.05 |     | 
|December
        31, 2001                                        |      | $3.80 |     | 
|March
        31, 2002                                           |      | $2.80 |     | 
|June
        30, 2002                                            |      | $2.60 |     | 
|                                                                 |      |       |     | 

|Monthly
        High and Low Trading Prices in Last Six Months | High |       | Low | 
|-------------------------------------------------------------- | ---- | ----- | --- | 
|                                                               |      |       |     | 
|January
        2002                                           |      | $2.80 |     | 
|February
        2002                                          |      | $2.60 |     | 
|March
        2002                                             |      | $2.11 |     | 
|April
        2002                                             |      | $2.29 |     | 
|May
        2002                                               |      | $2.60 |     | 
|June
        2002                                              |      | $2.30 |     | 
|July
        2002                                              |      | $2.20 |     | 
|August
        2002                                            |      | $2.02 |     | 

---

|(1) | Each American Depositary Share represents 1 Ordinary Share
|--- | ----------------------------------------------------------
|   

On August 31, 2002, there were 138 holders of record of the Company's American Depositary Shares (including 1 for DTC)  and 4,587,817 American Depositary Shares were outstanding (equivalent to 4,587,817 Ordinary Shares or approximately  3.3% of the outstanding Ordinary Shares).

Markets

The Company's Ordinary Shares trade on the London Stock Exchange and the Company's American Depositary Shares  trade on the NASDAQ National Market.



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ITEM 10 – ADDITIONAL INFORMATION

Memorandum and Articles of Association

A copy of these items was incorporated in the Company's 2001 Annual Report on Form 20-F. The information relating to  memorandum and articles of association included in such report are hereby incorporated by reference.

Material Contracts

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by  members of the Group (a) within the two years immediately preceding the date of this document and are or may be  material, or (b) contain provisions under which a member of the Group has an obligation or entitlement which is material  to the Group at the date of this document:

(a) Express.com, Inc.

In November 1999, the Company acquired 19.96% of the issued share capital of Maximum Holdings, Inc., a U.S. Internet  company specializing in the interactive video games market. The total consideration of U.S.$55 million was financed from  existing cash resources and banking facilities. Maximum Holdings, Inc. subsequently completed a merger with DVD  Express, Inc., a web-based retailer of DVD movies and videos in the U.S.. The Company's shareholding in the merged  entity, Express.com, Inc., was 10.2%. In November 2000, the Group announced that it had made a full provision against  the carrying value of this investment in its books. In March 2001, Express.com, Inc. filed for protection from its creditors  under Chapter 11 of the U.S. bankruptcy laws.

(b) Disposal of shareholding in Opticom

In March 2000, the Company announced a disposal
  of the majority of its shareholding in Opticom to T. J. Fussell, R. N. Keith
  and Credit Suisse First Boston (International) AG. The disposal was of 1,140,000
  of the Company's 1,476,052 shares in Opticom for a total consideration of NOK
  1,254 million (approximately £94 million). The Group sold its remaining
  stake in the company in a series of open-market transactions during November
  and December 2001, for £11.0 million net of costs.

(c) Vision Park Entertainment A.B.

In October 1996, the Company acquired 46.25% of Innerloop Technologies A.S. (''Innerloop''), a Norwegian based  developer. The Company's shareholding was subsequently diluted to 39.54% on the exercise of Innerloop stock options.  In September 2000, Innerloop was acquired by Vision Park Entertainment AB (publ.), a Swedish publicly quoted games  development company listed on OM Stockholmsborsens O-lista. The Company's holdings in Innerloop were converted  into 585,198 Vision Park shares, representing 5.13% of Vision Park's share capital. In November 2000, the Company sold  206,600 shares in Innerloop, leaving it with a holding of 3.32%. The Group sold it's remaining shares in October 2001 for  £122,900.

(d) Glassworks Productions Ltd (now called Eidos Post Productions Ltd)

In December 2000, Glassworks Post Productions Ltd (a subsidiary of Das Werk AG, an independent multimedia group)  acquired the business and assets of Group member Glassworks Productions Ltd, including various intellectual property  rights in certain post production video technology, for a total consideration of £700,000. At the same time 47 employees  left the Group to work for the purchaser.

(e) Underwriting Agreement

In May 2001, the Company entered into an underwriting agreement with Dresdner Kleinwort Wasserstein under which  Dresdner Kleinwort Wasserstein agreed to procure subscribers for, or failing which itself to subscribe for, New Ordinary  Shares not taken up under the Company's 2001



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1 for 3 Rights Issue. In consideration of
  its services under the agreement, Dresdner Kleinwort Wasserstein was paid commissions
  and fees of £1.5 million. The Rights Issue was successfully completed
  during the period and both parties rights and obligations under the agreement
  have now expired.

Taxation

The following is a summary of certain UK tax
  consequences generally applicable to the acquisition, ownership and disposition
  by a beneficial owner of ADSs representing Ordinary Shares and of Ordinary Shares
  not in ADS form that is resident in the United States and not resident in the
  United Kingdom (a ''US Holder'') for the purpose of the current double taxation
  convention between the United States and the United Kingdom (the ''Convention'').
  It should be noted that on July 24, 2001 representatives of the United Kingdom
  and United States signed a new Income Tax convention (the ''New Treaty''). As
  of the date hereof, the New Treaty has not yet been ratified by the United States
  Senate or the Government of the United Kingdom, and there can be no assurance
  that it will be ratified. Thus, the New Treaty does not currently have the force
  and effect of Law. However, if the New Treaty is ratified and enters into force,
  you will no longer be entitled to claim a special foreign tax credit in respect
  of dividends that is available under the terms of the Current Treaty, except
  for a limited period of time during which you may elect to apply the entirety
  of the Current Treaty in preference to the New Treaty. This summary is therefore
  based on current UK tax law as of the date of this document and is therefore
  subject to any changes to UK tax law. Because the following discussion is a
  general summary that does not purport to address all potential tax consequences
  for all types of investors, US Holders of ADSs or Ordinary Shares should consult
  their own tax advisers as to the particular tax consequences to them of acquisition,
  ownership and disposition of the ADSs or the Ordinary Shares. The following
  summary of certain UK tax considerations does not address the tax consequences
  to a US Holder (i) who is a resident (or in the case of an individual, ordinarily
  resident) in the United Kingdom for UK tax purposes or (ii) whose holding of
  Ordinary Shares or ADSs is effectively connected with a permanent establishment
  in the United Kingdom through which such US Holder carries on business activities
  or, in the case of an individual, performs independent personal services, with
  a fixed base situated therein.

For the purposes of the Convention, US Holders
  of ADSs will be treated as the beneficial owners of the underlying Ordinary
  Shares represented by the ADSs and evidenced by the ADRs. Accordingly, except
  as noted, the UK tax consequences discussed below apply equally to US Holders
  of ADSs and Ordinary Shares.

Taxation of Dividends under UK Law and
  Refunds of Tax Credits

Under the provision of the Convention and
  current UK law, a US holder of Ordinary Shares of ADSs who is an individual
  or a corporate portfolio holder (which is broadly defined as a shareholder who
  holds less than 10% of the voting shares of the Company) is entitled to receive
  from the UK Inland Revenue a refund (the ''Tax Treaty Payment'') of an amount
  equal to the tax credit in respect of the dividend to which an individual resident
  in the UK would be entitled minus a withholding tax of 15% of the sum of the
  cash dividend plus the tax credit (limited to the tax credit). On the basis
  of an £80 dividend (which amount has been selected for illustrative purposes
  only), the tax credit related to the dividend would be equal to £8.89
  (10% of the sum of the £80 dividend and the £8.89 tax credit). A
  US holder who is an individual or corporate portfolio holder would be entitled
  to receive a Tax Treaty Payment, calculated by reducing the £8.89 tax
  credit by withholding tax of 15% of the sum of the £80 dividend and the
  £8.89 tax credit. Accordingly, such US holder would not be entitled to
  receive any Tax Treaty payment. Thus, using the example set out above, an £80
  dividend will result in the US holder receiving £80.

A US holder who is an individual or a corporate
  portfolio holder who receives the £80 dividend in the above example should
  be considered for US federal income tax purposes to receive a dividend of £88.89 (£80 dividend
  plus the £8.89 tax credit) and would include that amount in income. Such
  US holder also should be considered to have paid £8.89 of UK tax that,
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the applicable limitations, would be creditable
  against such US holder's US federal income tax liability.

The aggregate of the dividend paid to a US
  holder who is an individual or a corporate portfolio holder and the gross tax
  credit in respect of it will be treated as dividend income for US federal income
  tax purposes to the extent made from the Company's current or accumulated earnings
  and profits, as determined under US federal income tax principles. The amount
  of any dividend paid in pounds sterling will equal the US dollar value of the
  pounds sterling received calculated by reference to the exchange rate in effect
  on the day that the dividend is received by the US holder, in the case of Ordinary
  Shares, or by the Depositary (or its Custodian), in the case of ADSs, regardless
  of whether converted into US dollars. Foreign currency exchange gain or loss,
  if any, realized in a subsequent sale or other disposition of pounds will be
  treated as ordinary income or loss to the US holder.

Dividends received on the Ordinary Shares
  of ADSs will generally not be eligible for the dividends received deduction
  allowed to US. corporations under Section 245 of the US Internal Revenue Code.
  However, the withholding tax will be treated as foreign income tax eligible
  for credit or deduction against such US holder's US federal income tax liability
  at such US holder's option, subject to applicable limitations. US holders should
  consult their tax advisers as to the method of claiming such foreign tax credit
  or deduction and compliance with special tax return disclosure requirements
  that may apply to US holders who claim the benefit of the foreign tax credit
  on such US holder's US federal income tax return.

A US holder will be denied a foreign tax credit
  (and instead allowed a deduction) for foreign taxes imposed on a dividend if
  the US holder has not held the Ordinary Shares or ADSs for at least 16 days
  in the 30-day holding period beginning 15 days before the ex-dividend date.
  Any days during which a US holder has substantially diminished its risk of loss
  on the Ordinary Shares of ADSs are not counted towards meeting the 16-day holding
  period required by the statute. A US holder that is under an obligation to make
  related payments with respect to the Ordinary Shares or ADSs (or substantially
  similar or related property) also is not entitled to claim a foreign tax credit
  with respect to a foreign tax imposed on a dividend.

Under regulations effective for payments after
  December 31, 2000, dividends paid on Ordinary Shares or ADSs to a US holder
  or to a non-US holder in the US or through US or US-related persons may be subject
  to a 31% US backup withholding tax in certain circumstances. In addition, the
  payment of proceeds of a sale, exchange or redemption of Ordinary Shares or
  ADSs to a US holder or non-US holder in the US or through US or US-related persons
  may be subject to US information reporting requirements and/or backup withholding
  tax.

US holders can avoid the imposition of backup
  withholding tax by reporting their taxpayer identification number to their broker
  or paying agent on US Internal Revenue Service Form W-9. Non-US holders can
  avoid the imposition of backup withholding tax by providing a duly completed
  US Internal Revenue Form W-8 BEN to their broker or paying agent. Any amounts
  withheld under the backup withholding rules from a payment to a holder will
  be allowed as a refund or a credit against such holder's US federal income tax
  liability, provided that the required returns are filed with US Internal Revenue
  Service on a timely basis.

UK Taxation of Capital Gains

Generally a US holder who is neither resident
  nor ordinarily resident for tax purposes in the UK will not be liable for UK
  tax on capital gains realized or accrued on the sale or other disposal of Ordinary
  Shares or ADSs unless, in the year of assessment in which the gain accrues to
  such holder, that US holder carries on a trade in the UK through a branch or
  agency and the Ordinary Shares or ADSs are or have been used by, held by, or
  acquired for use by or for the purpose of such trade, branch or agency. However,
  a UK non-resident and not ordinarily resident US holder who had been resident in
  the UK for at least part of four years and who held Ordinary Shares or ADSs
  during that period may, in certain circumstances, become liable to UK capital
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his return to the UK following a disposal
  of such Ordinary Shares or ADSs. Any US holders whose circumstances are such
  that they may fall within such provisions are advised to consult their tax adviser.

A US holder who is resident or ordinarily resident for tax purposes in the UK, or a US corporation which is resident in  the UK by reason of being managed and controlled in the UK, or a US holder who, or a US corporation which, is  trading in the UK through a branch or agency where Ordinary Shares or ADSs are or have been acquired, used or held  for the purposes of such trade, branch or agency, may be liable for both UK tax and US federal income tax on a gain on  the disposal of the Ordinary Shares or ADSs. Such US holder generally will be entitled to offset a credit for UK tax  against its US federal income tax liability with respect to such gain.

A US holder of Ordinary Shares or ADSs will be liable for US federal income tax on gains realized or accrued on the sale  or disposal of Ordinary Shares or ADSs to the same extent as on any other gains from sales of shares. Such gain will be a  capital gain if the Ordinary Shares or ADSs were capital assets in the hands of such US holder.

UK Estate and Gift Tax

UK Inheritance Tax ("IHT'') is a tax
  levied at death on the value of an individual's estate at death plus the value
  of any gifts made within seven years of death. It may also apply to certain
  lifetime transfers or to property comprised in a trust or settlement. A US
  domiciliary need only be concerned about liability for IHT to the extent he
  is or is deemed to be also a UK domiciliary (or was a UK domiciliary at
  the time he created any trust or settlement) or otherwise to the limited extent
  of his UK assets. Generally, an individual who is domiciled in the United
  Kingdom is liable for IHT on his worldwide estate. An individual who is domiciled
  within the United States would only be subject to IHT on United Kingdom situated
  assets which would include shares in a UK company. Domicile in the UK can
  arise either as a matter of general law, because the individual regards the
  United Kingdom as his permanent home and intends to remain in the United Kingdom
  for the rest of his life, or it can arise through residence in the United Kingdom
  over a number of years. Once United Kingdom domicile has been acquired then
  an individual will be treated as continuing to be deemed domiciled in the United
  Kingdom for IHT purposes for three years after giving up that domicile.

Under the Convention between the United States
  and the United Kingdom relating to estate and gift taxes, ADSs or Ordinary Shares
  held by an individual who is domiciled for the purpose of the Convention in
  the United States and is not for the purposes of the Convention a national of
  the United Kingdom will not, provided any applicable US tax is paid, be subject
  to IHT on the individual's death or on a gift of the ADSs or the Ordinary Shares
  during the individual's lifetime unless the ADSs or the Ordinary Shares form
  part of the business property of a permanent establishment of the individual
  in the United Kingdom or, in the case of a holder who performed independent
  personal services, pertain to a fixed base in the United Kingdom used for the
  performance of independent personal services. Where the ADSs or Ordinary Shares
  have been placed in trust by a settler who, at the time of settlement, was a
  US Holder, the ADSs or Ordinary Shares will generally not be subject to IHT
  unless the settler, at the time of settlement, was not domiciled in the United
  States and was a United Kingdom national. In the exceptional case where the
  ADSs or Ordinary Shares are subject both to IHT and to US Federal gift or estate
  tax, the Convention generally provides for tax paid in the United Kingdom to
  be credited against tax payable in the United States or for tax paid in the
  United States to be credited against tax payable in the United Kingdom based
  on priority rules set forth in the Convention.

UK stamp duty and stamp duty reserve tax

Stamp duty is (subject to certain exceptions) generally payable at the rate of 1.5% on any instrument transferring Ordinary  Shares to the Custodian of the Depositary. Where the transfer is not on sale, the 1.5% charge is applied to the value of such Ordinary Shares.
Alternatively, where these is no instrument of transfer a similar 1.5% charge
to stamp duty reserve tax (SDRT) may



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arise (see below). In accordance with the
  terms of the Deposit Agreement relating to the ordinary shares, any tax or duty
  payable by the Depositary or the Custodian of the Depositary on future deposits
  of Ordinary Shares will be charged by the Depositary to the party to whom ADSs
  are delivered against such deposits.

No UK stamp duty will be payable on transfer
  of an ADS, provided that the ADS (and any separate instrument of transfer) is
  executed and retained at all times outside the UK. A transfer of an ADS in the
  US thus will not give rise to UK stamp duty provided the instrument of transfer
  is not brought into the UK. A transfer of an ADS in the UK may attract stamp
  duty at a rate of 0.5% of the consideration.

Any transfer (which will include a transfer from the Depositary to an ADS holder) of the Ordinary Shares, including  Ordinary Shares underlying an ADS, may result in a stamp duty liability at the rate of 0.5% of the consideration. There is  no charge to ad valorem stamp duty on gifts. On a transfer of Ordinary Shares from a nominee to the beneficial owner  (the nominee having at all times held the Ordinary Shares on behalf of the transferee) under which no beneficial interest  passes and which is neither on sale, nor arises under or following a contract of sale, nor is in contemplation of sale, fixed  stamp duty of £5 will be payable.

Stamp duty reserve tax generally at a rate of 0.5% of the consideration is currently payable on any agreement to transfer  Ordinary Shares or any interest therein unless: (i) an instrument transferring the Ordinary Shares is executed; (ii) stamp  duty, generally at a rate of 0.5%, is paid; and (iii) generally the instrument is stamped on or before the accountable date for  stamp duty reserve tax. The duty will, however, be refundable if within six years the agreement is completed by an  instrument which has been duly stamped, generally at the rate of 0.5%.

Stamp duty reserve tax will not be payable on any agreement to transfer ADSs though an agreement to transfer the  underlying shares is liable to SDRT as discussed above.

Documents on Display

The Company's articles and memorandum of association are available for inspection during normal business hours upon  prior written request at the Company's registered office, which is located at

Wimbledon Bridge House1, Hartfield RoadWimbledonLondon SW19 3RUUnited Kingdom



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ITEM 11 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Exchange, Interest Rate Risk and Financial Instruments

The Group is exposed to certain market risks arising from transactions in the normal course of business and financial  instruments used to finance the Group's operations. The main risks arising are foreign currency risk and interest rate risk.  The Group's treasury policy is to manage financial risks that arise in relation to underlying business needs. The activities  of the treasury function are carried out in accordance with Board approved policies. The treasury function does not  operate as a profit center. Treasury activities include the use of spot and forward foreign exchange instruments, currency  options and currency swaps. It is, and has been throughout the period under review, the Group's policy that no trading in  financial instruments shall be undertaken.

Movements in foreign exchange rates, particularly
  the U.S. dollar and the Euro, can affect the Group's Sterling profit and loss
  account and balance sheet. The subsidiaries in Japan and Singapore do not impact
  materially on the results of the Group. Foreign currency cashflows are hedged
  in accordance with the Groups treasury policy using the instruments listed above.

During the year the Group's interest rate exposure related to cash deposits and floating rate debt. Cash deposits are  placed on the money markets for periods of up to six months. Floating rate debt related to bank borrowings bearing an  interest at rates based on inter-bank interest rates.

Interest Rate Sensitivity

The interest rate and currency profile of the Group's financial assets and liabilities at March 31, 2002 was as follows:

|                                                  |          |        | Japanese |  |       |  
|------------------------------------------------- | -------- | ------ | -------- |  | ----- | -
|                                                  | Sterling |        | Yen      |  | Total |  
|                                                  |          |        |          |  |       |  
|                                                  | £'000    |        | £'000    |  | £'000 |  
|Cash
        and liquid resources – floating rate |          | 42,310 |          |  | —     |  
|Floating
        rate debt                        |          | —      |          |  | (66   | )
|                                                  |          |        |          |  |       |  
|                                                  |          | 42,310 |          |  | (66   | )
|                                                  |          |        |          |  |       |  

The corresponding interest rate and currency profile of the Group's financial assets and liabilities at March 31, 2001 was  as follows:

|                   | Sterling |         | Total | 
|------------------ | -------- | ------- | ----- | 
|                   |          |         |       | 
|                   | £'000    |         | £'000 | 
|Floating rate debt |          | (18,868 | )     | 
|                   |          |         |       | 
|                   |          | (18,868 | )     | 
|                   |          |         |       | 

The maturity profile of the Group's financial liabilities at March 31, 2002 was as follows:

|                    | 2001  |        | 2002  | 
|------------------- | ----- | ------ | ----- | 
|                    |       |        |       | 
|                    | £'000 |        | £'000 | 
|In one year or less |       | 18,868 |       | 

Exchange Rate Sensitivity

Forward Exchange Contracts

The Group enters into forward foreign currency contracts to eliminate the currency exposures that arise on trading  balances denominated in foreign currencies. Changes in the fair value of instruments used to hedge foreign currency  monetary assets and liabilities are recognised in the hedged periods. There were no unrecognised gains or losses at the  year end.





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PART II

ITEM 15 – CONTROLS
  AND PROCEDURES

In the year ended March 31, 2002, the Company did not make any significant changes in, nor take any corrective actions  regarding, the Group's internal controls or other factors that could significantly affect these controls. Management of the  Company periodically reviews the Group's disclosure controls and procedures for effectiveness and plans to conduct an  evaluation of the Group's disclosure controls and procedures regularly.



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PART III

ITEM 18 – FINANCIAL
  STATEMENTS

These documents are contained within Item 8.

ITEM 19 – EXHIBITS.

The following documents are filed as part of this annual report:

|                                                                                     |  | Page | 
|------------------------------------------------------------------------------------ |  | ---- | 
|Press
        Release dated February 26, 2002, dealings by Directors                 |  | E-1  | 
|Press
        Release dated March 19, 2002, trading update                           |  | E-2  | 
|Press
        Release dated April 18, 2002, appointment of a non-executive Chairman  |  | E-3  | 
|UK
        Press release dated May 15, 2002, containing details of full year results |  | E-4  | 
|US
        Press release dated May 15, 2002, containing details of full year results |  | E-5  | 
|Chief
        Executive Officer Certification                                        |  | E-6  | 
|Group
        Finance Director Certification                                         |  | E-7  | 

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and  authorized the undersigned to sign this annual report on its behalf.

Eidos plc
  (Registrant)/s/Stuart Cruickshank
(Group Finance Director)

Date: September 27, 2002

CERTIFICATIONS

I, Michael McGarvey, certify that:

|1. | I have reviewed this annual report on Form 20-F of Eidos plc:
|-- | -------------------------------------------------------------
|  

|2. | Based on my knowledge, this annual report
      does not contain any untrue statement of a material fact or omit to state
      a material fact necessary to make the statements made, in light of the circumstances
      under which such statements were made, not misleading with respect to the
      period covered by this annual report:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  

|3. | Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all materially respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  

|Date:
      September 27, 2002 |  | /s/Michael
      McGarvey                                               
|------------------------------ |  | ------------------------------------------------------------------------
|                               |  | Michael
      McGarvey
                    Chief
      Executive Officer



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I, Stuart Cruickshank, certify that:

|1. | I have reviewed this annual report on Form 20-F of Eidos plc:
|-- | -------------------------------------------------------------
|  

|2. | Based on my knowledge, this annual report
      does not contain any untrue statement of a material fact or omit to state
      a material fact necessary to make the statements made, in light of the circumstances
      under which such statements were made, not misleading with respect to the
      period covered by this annual report:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  

|3. | Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all materially respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  

|Date:
      September 27, 2002 |  | /s/Stuart
      Cruickshank                                              
|------------------------------ |  | -------------------------------------------------------------------------
|                               |  | Stuart
      Cruickshank
                    Group
      Finance Director



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