Ubisoft 2012 Annual Report Download - page 177

Governance and Internal control
2012
172
1.8 INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES
IMPLEMENTED BY THE UBISOFT GROUP
The preparation of this report is based on the information and control methods reported by the various
parties involved in internal control within Ubisoft and its subsidiaries, as well as the internal audit work
performed at the request of senior management.
1.8.1 DEFINITION AND OBJECTIVES OF INTERNAL CONTROL AND RISK
MANAGEMENT
1.8.1.1 DEFINITION OF INTERNAL CONTROL
Ubisoft has drawn up this report in accordance with the reference framework of the AMF, initially
published in January 2007, and updated and revised in July 2010, and the principles of the application
guide. The Group also uses this reference framework to improve its internal control procedures.
Under this framework, internal control is defined as a system designed to ensure:
 Compliance with laws and regulations;
 Application of the instructions and policies fixed by senior management;
 That the Company’s internal processes are functioning correctly, in particular, those
involving the security of its assets;
 The reliability of the financial information published.
This system must also contribute to the control over its activities, the efficiency of its operations and
efficient use of its resources, while enabling the Company to adequately take into account significant
operational, financial or compliance risks. Therefore, the internal control system plays a key role in
conducting and monitoring its activities.
Since 2007, Ubisoft has used a proactive approach in order to continuously assess the adequacy and
effectiveness of its internal control system. Consequently, the internal control system will continue to
adapt to the constraints and specific features of the Group and its subsidiaries, and to changes in its
external environment.
Since 2010, it has been decided to more specifically target the audits carried out in the Group’s
production studios (4 French companies and 24 foreign companies) and in support-level companies (3
French companies). Audits are still carried out within distribution companies but are more
comprehensive and less detailed.
However, the Group is aware that the internal control system cannot provide an absolute guarantee
that the Company’s objectives will be met and that all the potential risks it may face will be controlled.
1.8.1.2 DEFINITION OF RISK MANAGEMENT
Risk management is a tool for company management that contributes to:
- Creating and preserving the value, assets and reputation of the Company;
- Securing the decision-making organization and processes of the Company to help achieve its
objectives;
- Promoting consistency of actions with company values;
- Involving Company employees in a common vision of the principal risks.
The risk management system is a component of internal control. It allows the Company to anticipate
and identify the key internal or external risks which could pose a threat and prevent the Company from
achieving its objectives.