Ubisoft 2012 Annual Report Download - page 178

Governance and Internal control
2012
173
1.8.2 COMPONENTS OF THE INTERNAL CONTROL SYSTEM
1.8.2.1 ORGANIZATION OF INTERNAL CONTROL AND OPERATING PROCEDURES
Since the internal audit department was closed in 2010, in the interests of proximity and effectiveness,
and in order to strengthen team-working, the regional managers will be in charge of keeping this
internal control process going and improving it from now on.
The internal control system relies on a solid foundation of autonomy and collaboration within the
Group’s teams, encouraging the alignment of goals, resources and the mechanisms deployed. It is
based on the clear identification of goals and responsibilities, a human resources policy ensuring that
resources and skill levels are sufficient, and that information systems and tools are adapted to each
team and/or subsidiary.
Each subsidiary is responsible for implementing the relevant strategies to achieve these objectives,
although the monitoring of the internal control system and risk management is highly centralized by
the operational departments.
Organization
The key parties involved in the internal control system are as follows:
 The CEO of Ubisoft Entertainment SA: He defines and directs Group strategy. He is
responsible for establishing the procedures and mechanisms employed to ensure both the functioning
and monitoring of the internal control system. He takes charge of the internal control system, more
specifically as part of his duties as Chief Executive Officer with the Board of Directors and the
assistance of the auditors.
 The Board of Directors: Its operations are described in section 1.3. It primarily defines the
policies governing the Company’s business activities and ensures their application. It strives in
particular to examine the accounting and financial documents and to determine the risks in relation
with the Company’s internal control. It ensures the efficiency of the mechanisms and procedures
applied as part of internal control. To this end, it has access to all documents and reports required to
perform this task. Each director may independently require additional information from the CEO, who
is at all times available to provide relevant information and explanations to the Board of Directors.
 The Group’s managers and employees: The major policies and goals are decided upon by
senior management of each area in consultation with Group senior management and are passed on to
the subsidiaries. Each subsidiary has its own senior management and management team and is
responsible for implementing the strategies designed to ensure that these goals are achieved.
 Operational management: In collaboration with senior management, they are collectively
involved in setting the key accounting, finance, legal, tax, IT and human resources policies, and
supporting the subsidiaries with their implementation. Specific visits are made to the subsidiaries in
order to carry out audits and training and to make recommendations so as to ensure that the internal
control system is sufficient.
These procedures are presented in detail in the paragraph “Control activities”.
 Finance and accounting teams: Present in all subsidiaries, they are responsible for
performing analysis and control functions, including budgeting and the preparation of the financial
statements.