Ubisoft 2005 Annual Report Download - page 154

procedures and more). Consequently, each significant
subsidiary has local internal audit procedures (delegation
of signing authority for banking transactions, audit of
current transactions, separation of tasks between the
signatory and the preparer of the payment guaranteeing
effective prevention against fraud, and so on).
Centralized decisions and controls with subsidiaries
Group Finance and Funding
This department provides for all financing needs of subsidiaries,
many of which benefit from a cash-pooling system. This system
centralizes financing and promotes the optimization of financial
resources within the group.
Similarly, the group treasury software enables the centralized
management of the group’s cash position by optimizing the
management of liquidity on a day-to-day basis, thus providing
increased visibility over the cash flow of subsidiaries.
Off-balance-sheet commitments (bank guarantees for
purchasing funds, letters of credit, comfort letters, price
guarantees, securities etc.) are managed by the group
Finance department. Bank guarantees are used to enable
subsidiaries to place orders with their main suppliers by
directly committing the parent company.
Disputes and litigation:
The group Legal department handles all subsidiaries’ disputes
and litigation of a corporate or contractual nature directly.
Acquisitions
are managed by the Acquisitions department attached to the
Finance division, which examines and evaluates the strategic
interest of total or partial acquisition transactions being
considered by a company and submits them to the group’s
general management, which makes the final decision. No
subsidiary of the group can make this decision on its own.
Other procedures:
A number of procedures for French subsidiaries exist in the
following areas:
- Purchasing: management and accounting of purchases,
placing of purchasing orders, tracking of the computer
stock, fixed assets, and end-of-life management for
computer equipment and furniture;
- Inventory: general inventory procedures (internal pro-
cedures);
- Invoicing: invoicing of subsidiaries (i.e. studios, distribution
subsidiaries) and of customers outside France, creation of
customer accounts and resolution of disputes on customer
deliveries.
- Corporate: payroll preparation and processing of post-
payroll procedures.
The aim of all these procedures is to define the principles
of authorization and approval and stress the principles of
separation of tasks, thereby optimizing control in all areas.
Several other procedures are in the process of being finalized
or have been proposed for 2006-07.
Outlook
The group plans to continue to map out risks, introduce
any new action plans that may be needed and identify and
document control procedures.
7.2.6
Limitations on the powers
of the Chief Executive Officer
7.3
You are informed that the Chairman and Chief Executive Officer exercises his functions without any particular limitations, subject
to the powers expressly granted by law and the Articles of Association to the Board of Directors.