Atari 2011 Annual Report Download - page 149

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
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negotiated settlement, whenever the amount involved exceeds 750,000 Euros;
• The granting of security interests on the Company’s assets, whenever the secured obligation or the
value of the collateral exceeds 750,000 Euros;
• The signing of any licensing or IP agreement, whenever the amount involved exceeds 1 million Euros.
The Board of Directors approves the annual Budget and the multiannual game publishing plan. The Board of
Directors also approves any material change in the Budget or in the publishing plan during the year.
3. INTERNAL CONTROL
During Fiscal Year 2010/2011, the Group has been working on relying on the AMF internal control reference
framework and implementing guide for small and mid caps (“Cadre de reference du contrôle interne : Guide de
mise en oeuvre pour les valeurs moyennes et petites”). In July 2010, the Audit Committee, the management of
the Group and the auditors met and discussed, among other things, global risk assessment and internal control,
first step towards the implementation of the AMF recommendations.
In addition, the audit committee suggested that the Company should establish a €150K annual fund for internal
audits, primarily for fraud and other investigations. This fund is available to the CEO to use at his discretion.
Internal control is a process carried out by the Chief Executive Officer, management and the staff, under the
authority of the Board of Directors, aimed at obtaining reasonable assurances concerning the fulfillment of the
following objectives:
• The proper operation of the Company's internal control procedures;
• The performance and effectiveness of operations;
• The consistency of financial transactions;
• Compliance with applicable laws and regulations.
One of the aims of the internal control system is to prevent and control risks to which the business is exposed and
risks of errors and fraud, in particular in the financial and accounting areas. As in the case of other oversight
systems, it cannot provide an absolute guarantee that all of those risks will be eliminated.
(1) Risk assessment procedures implemented by the Group
Internal control is based on risk assessment procedures performed by the management of operating entities and
the Group, in connection with annual review and budgeting processes. A Global Risk Assessment (“GRA”) project
has been initiated, to be completed in Fiscal Year 2011/2012. The GRA is used to identify, assess and prioritize
risk. The GRA conclusions are presented to both the Audit Committee and the Board of Directors for discussion
and approval. Based on these discussions, the Group establishes remediation plans where required. Risks are
separated into four major categories: Strategic, Operational, Reporting and Compliance. The GRA for Fiscal
Year 2010/2011 has been approved by the Board of Directors at its July 22, 2010 meeting. The GRA for Fiscal
Year 2011/2012 has been approved by the Board of Directors at itsJuly 2011 meeting. The GRA will be
evaluated on a semi-annual basis and accordingly, risks will be reassessed upon subsequent review.
Risk factors are reviewed in section 8 of the Board of Directors’ Management Report included in this Registration
Document (see “Risks to which the business is exposed”).
(2) Responsibility for internal control
In addition to the Board of Directors and pursuant to the Group's internal control policy, the management of
operating entities has direct authority for internal control. Finance management is responsible for the
implementation of procedures at the local level.
The internal control of processes that have an impact on the accuracy on the Group's financial information,
whether of a financial reporting nature (consolidation, financial accounting, etc.) or having to do with upstream
operating procedures (purchases, sales), is specifically under the authority of:
• The Chief Financial Officers at the Group or division level for the definition and design of internal control
procedures;
• The management of operating entities, regions, subsidiaries and the Group, for the supervision of the
effective implementation of internal control measures.
• The operational and legal restructuring of the Group will cause changes in its management. As changes
take place, roles and responsibilities in terms of internal control will be redefined.
(3) Internal control documents
Group procedures are communicated to affiliates and are comprised of the reporting methods and accounting
policies adopted by the Group's senior management. These procedures are continually updated for changes in
accounting policies, financial reporting requirements and consolidation methods. In the coming months, the Group
is planning to formally document these procedures.
Detailed reports on key oversight of processes that have an impact on the accuracy of financial information will
also continue to be issued in the Company’s main regions following the restructuring of operating entities.