Blackberry 2007 Annual Report Download - page 58

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RESEARCH IN MOTION LIMITED
management’s discussion and analysis of financial
condition and results of operations continued
FOR THE THREE MONTHS AND FISCAL YEAR ENDED MARCH 3, 2007
• the conclusion of the Special Committee upon completion
of the Review, as disclosed by the Company in a press
release on March 5, 2007, that the Company failed to
maintain adequate internal and accounting controls prior
to August 8, 2006 with respect to the issuance of options
in compliance with the Stock Option Plan, both in terms
of how options were granted and documented, and the
measurement date used to account for certain option
grants;
• the steps taken by the Company to enhance its controls
following the commencement of the Review on August
8, 2006, including the measures adopted by the Board
of Directors that are summarized above, based on
the recommendations of the Special Committee, in
response to the findings of the Special Committee, that
are designed to enhance the oversight and corporate
governance of the Company and to strengthen the
Company’s control over its stock option granting process;
• the fact that the Special Committee did not find
intentional misconduct on the part of any director, officer
or employee responsible for the administration of the
Company’s stock option grant program; and
• the increased participation of, and reliance by the
Company on, outside accounting advisors and legal
counsel following the commencement of the Review, which
will continue until the Company has established its internal
audit department and has enhanced its capabilities in U.S.
GAAP.
In light of these and other measures undertaken as described
above, management has concluded that the control
deficiencies that resulted in the Restatement were addressed
following the commencement of the Review on August 8,
2006 and has determined that as of March 3, 2007, the design
and operating effectiveness of controls over the recording of
stock-based compensation expense were effective. These
measures included increased documentation and testing
of the design and operation of internal controls, the
establishment of guidelines and the enhanced focus by
all levels of management on the improvement of controls
following the commencement of the Review, and increased
participation in the Company’s processes by external
advisors.
Disclosure Controls and Procedures
As of March 3, 2007, the end of the period covered by this
Annual Report on Form 40-F, the Company carried out an
evaluation, under the supervision and with the participation
of the Company’s management, including the Company’s
Co-Chief Executive Officers and its Chief Accounting Officer,
of the effectiveness of the design and operation of the
Company’s disclosure controls and procedures, as defined in
Rules 13a-15(e) and 15d-15(e) of the United States Securities
and Exchange Act of 1934 (the “Exchange Act”). Based on
that evaluation, the Co-Chief Executive Officers and the
Chief Accounting Officer have concluded that, as of such
date, the Company’s disclosure controls and procedures were
effective to give reasonable assurance that the information
required to be disclosed by the Company in reports that
it files or submits under the Exchange Act is (i) recorded,
processed, summarized and reported, within the time periods
specified in the Securities and Exchange Commission’s
rules and forms, and (ii) accumulated and communicated to
management, including its principal executive and principal
financial officers, or persons performing similar functions,
as appropriate to allow timely decisions regarding required
disclosure.
Management’s Report on Internal Control Over Financial
Reporting
Management of the Company is responsible for establishing
and maintaining adequate internal control over financial
reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) and 15d-15(f) under the Exchange
Act as a process designed by, or under the supervision of,
the Company’s principal executive and principal financial
officers and effected by the Company’s Board of Directors,
management and other personnel to provide reasonable
assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes
in accordance with GAAP and includes those policies and
procedures that:
• pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and
dispositions of the assets of the Company;