Ubisoft 2003 Annual Report Download - page 118

FINANCIAL REPORT
2004
118
Currency risk:
The group is exposed to foreign exchange risk on cash flows
arising from operating activities as well as on investments in
its foreign subsidiaries.
The group only protects its positions with regard to operating
cash flows in the major currencies (i.e. the US, Canadian and
Australian dollars and pounds sterling). The strategy is to
hedge one fiscal year at a time; as a result, the hedge period
does not exceed 15 months.
The group uses natural hedges stemming from transactions
in the opposite direction (i.e. the purchase of goods in foreign
currencies offset by royalties originating from subsidiaries in
the same currency). For non-hedged balances as well as for
non-commercial transactions (i.e. internal loans in foreign
currencies), the parent establishment borrows in these
currencies or sets up forward-sale contracts or options.
The Ubisoft group is composed of 19 French subsidiaries and 31 foreign subsidiaries, broken down as follows: 21 distribution
companies, 20 production companies, seven support companies and two Internet companies.
Major strategies and objectives are determined by general management, represented by the Board of Directors and by the
general management at each subsidiary.
Each subsidiary has its own management and management team.
The implementation of strategies to achieve the objectives thus defined is handled by each subsidiary.
6.3
Scope of internal audit
6.4.1 General organization
The organization and role of the various bodies that
contribute to the internal audit are described below.
The CEO of the group is responsible for preparing the
procedures and mobilizing the resources to be deployed with
regard to conducting and monitoring the internal audit.
Accounting and Financial departments:
These include operational departments with a dual mission of
expert evaluation and auditing..
The following departments exist in all of the group's companies:
The Controlling and Valuating department supplies relevant
data (sales, margins, costs etc.) to line managers, enabling
them to make strategic management decisions for the
subsidiary. Its objective is to provide monthly forecasting and
reporting tools, adapted to the various levels of responsibility,
and to analyze the discrepancies between objectives and
actual achievements.
Each Accounting department manager draws up the monthly
accounts by the 15th of the following month and completes
the consolidation reporting package.
The Consolidation department, which reports to
Administrative Management, prepares the monthly consolidated
accounts for the group by the 30th of the following month; it
also monitors the group’s consolidated sales figures on a
day-to-day basis.
This department centralizes all of the accounting procedures
relating to the preparation and analysis of monthly accounts
(harmonization of group accounting standards, preparation
of the consolidation manual etc.), and ensures that the
consolidated accounts are prepared in accordance with
current standards and regulations and that they give a true
and accurate picture of group's activity and financial
situation.
6.4
General organization of internal audit
procedures at the group level