Ubisoft 2009 Annual Report Download - page 171

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3.1.2.12.3 Audit Committee
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To date, the Company has not set up the Audit Committee recommended by the AFEP-MEDEF Code,
largely owing to the difficulty in doing so given the recommended composition of such a committee. In
accordance with the provisions of Article L. 823-19 of the French Commercial Code, introduced by
Directive 2008-1278 of December 8, 2008 (having transposed into French law the eighth directive on
statutory audits (Directive 2006/43/EC)), the Company intends to establish an Audit Committee within
the time frame shown in Article 21 of the Directive, using the expiry of Board Members’ terms in office
as a benchmark.
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3.1.3 Internal control procedures
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 the Senior Management.
3.1.3.1 Internal control definition and goals
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Ubisoft has drawn up this report in accordance with the reference framework provided by the AMF
(French Financial Markets Authority) published in January 2007 and the principles of the application
guide. The Group also uses this reference framework to fine-tune 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.
In order to continuously assess the adequacy and effectiveness of its internal control system, Ubisoft
introduced a proactive approach. Consequently, the internal control system will continue to adapt to
the constraints and specificities of the Group and its subsidiaries, and to changes in its external
environment.
It is applicable to all Group subsidiaries, now comprised of 37 French companies and 43 foreign
companies, broken down as follows: 19 distribution companies, 44 production companies, 15 support
companies, one digital animation company and one special effects company.
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.