Ubisoft 2005 Annual Report Download - page 153

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UBISOFT • 2006 ANNUAL REPORT
FINANCIER
CHAIRMAN OF THE BOARD OF DIRECTORS’ REPORT
accounts and the initial forecasts, and to fine-tune the
half-yearly and annual forecasts on the basis of actual
results.
Responsibilities are distributed among these three divisions
in order to facilitate quality control for the accounting and
financial data.
A forecasting tool to support performance:
The Hyperion HFM consolidation tool is used for financial
forecasting.
Each of the group entities’ earnings forecasts are consolidated
in a centralized application to allow:
analysis at the entity level or for a specific line item;
comparisons between actual results and forecasts;
monthly, quarterly or other analysis.
The tool is used by all the group’s entities, which allows a
comprehensive view of the group as a whole.
Reliability of accounting and financial information:
Ubisoft's accounting and financial information is prepared
by the Administration department under the control of the
Chairman and Chief Executive Officer, with final approval
being the prerogative of the Board of Directors.
Each subsidiary’s financial statements are prepared by the
local accounting departments under the supervision of
their director. The half-yearly financial statements are
subject to a limited review and the year-end closing of
accounts is audited by the auditors of each entity.
Accounting information is sent to the Consolidation
department based on a timetable defined by the
Administration department.
The company has invested in resources to shorten and
improve the reliability of the consolidated financial statement
production process.
The group uses Hyperion’s HFM tool to collect and reconcile
accounting data from subsidiaries. This tool provides the
ability to perform consistency checks automatically.
As a result, it ensures fast, reliable data transmission and is
designed to enhance the security of consolidated financial
statements.
The consolidated financial statements are subject to a
limited review on September 30 and a full audit on March
31 by the group's statutory auditors. Periodic reviews
throughout the fiscal year permit a preliminary analysis of
specific accounting issues.
This periodic review allows auditors to anticipate problems
that may arise when the accounts are finalized, and reduces
the time required to prepare the consolidated financial
statements.
The group’s objective is to finalize its consolidated financial
statements by D+45 rather than the current D+60.
Guided by a constant concern to optimize the performance
of its information system and meet its steadily evolving
needs in terms of efficiency, responsiveness and reliability,
the group is considering the deployment of a new version
of its consolidation software in the medium term.
The Consolidation department has implemented procedures
to help the subsidiaries gain a better understanding of the
available tools and use them more effectively:
- establishment of a group-wide chart of accounts;
- implementation of automatic mapping between the
individual and consolidated financial statements;
- creation of a user manual for the consolidation reporting
package;
- development of a consolidation manual.
A manual covering the group’s accounting principles
(IAS/IFRS) is currently being developed. The aim of this
manual is to advise the subsidiaries’ accountants of the
accounting principles used by the group so that they can
clearly distinguish between the local principles and the
group’s principles in terms of accounting treatment.
The group is continuing to expand its accounting ERP system
at the foreign subsidiaries. The long-term objective is
to integrate all significant subsidiaries under People
Soft/Oracle.
This software is being implemented in an effort to establish
a formal, uniform accounting system, a move which is in
keeping with the company's commitment to enhancing the
effectiveness and reliability of strategic information
processing at all levels.
This system addresses the local needs of the subsidiaries as
well as the group’s standards, ensures access to information
at all levels and facilitates comparison of information. It
also helps manage flows, and thus helps to improve the
coordination between departments. All of the computing
procedures implemented are designed to promote increased
data integration.
All of the computing procedures implemented are designed
to promote greater data integration.
The Consolidation department also collects and verifies
the accounting data mentioned in the group’s financial
announcements as well as data pertaining to the consolida-
ted financial statements. These data are verified by the
company as well as by the statutory auditors.
New accounting standards
Application of the IFRS standards becomes mandatory for
year-end financial statements published as of January 1,
2005 for listed companies belonging to the EEC. For Ubisoft,
presentation of the consolidated financial statements in
accordance with the IAS/IFRS standards applies to the fiscal
year ended March 31, 2006 and includes a comparison with
the fiscal year ended March 31, 2005.
A number of measures have been taken internally to prepare
the group’s accountants for the impact of this transition to
IFRS standards. A User’s Guide is available for the subsidiaries
concerned. Certain accounting software parameters were
reviewed to ensure that they adhere to the new standards.
In order to optimize the application of this new reference
document and prepare ahead of time for the annual closing
of accounts, Ubisoft decided to publish all financial data
according to IAS34 when it published its most recent half-
yearly consolidated financial statements. The explanatory
notes were approved and published on March 1, 2006.
Strict authorization rules
The group has established strict rules at both its French
and foreign subsidiaries concerning the authority of each
manager with regard to customer receipts and supplier
payments (a double-signature procedure, secure tools
for payment methods, a regularly updated system of
authorizations and signatures, computer access control