Lenovo 2008 Annual Report Download - page 45

Lenovo Group Limited • Annual Report 2007/08 43
Within this framework, management perform periodic enterprise wide risk assessments and continuously monitor
and report the progress of action plans to address the key risks. They also track and report on the implementation
of strategic initiatives, business plans, budgets and financial results. As part of the focus on financial integrity all
relevant senior executives regularly verify the accuracy and completeness of the quarterly financial statements and
compliance with key internal controls.
While management is responsible for the design, implementation and maintenance of internal controls, the Board
and its Audit Committee oversee the actions of management and monitor the effectiveness of the established
controls.
To assist the Audit Committee in its oversight and monitoring activities, the Company maintains an independent
worldwide Internal Audit function which provides objective assurance to the Audit Committee that the system of
internal controls is effective and operating as intended. To help ensure the quality of the Internal Audit function and
provide assurance that the Internal Audit function is in conformity with the Standards of the Institute of Internal
Auditors, the Audit Committee periodically commissions an independent external quality assurance review of the
Internal Audit function.
Internal Audit has unrestricted access to all corporate operations, records, data files, computer programs, property,
and personnel. To preserve the independence of the internal audit function, the Head of Internal Audit reports
directly to the Audit Committee on audit matters and to the Chief Financial Officer on administrative matters. The
Head of Internal Audit is authorized to communicate directly with the Chairman of the Board and other Board
members.
Using a risk based methodology, Internal Audit prepares its audit plan in consultation with, but independent of,
management. The audit plan focuses on those areas of the Company’s activities with the greatest perceived risk.
The plan is reviewed by the Audit Committee, who are also given quarterly updates on the performance of the plan
and key findings. Ad hoc reviews will also be performed on areas of concern identified by the Audit Committee and
management. Management of individual business units or processes are informed of areas for improvement, and
Internal Audit monitors the corrective actions to completion.
Regarding procedures and internal controls for the handling and dissemination of price-sensitive information, the
Company is aware of its obligations under the Listing Rules and the overriding principle that information which
is expected to be price-sensitive should be announced immediately it is the subject of a decision. The Company
conducts its affairs with close regard to the “Guide on Disclosure of Price-sensitive Information” issued by the Hong
Kong Stock Exchange in 2002 and has implemented policies and procedures which strictly prohibit unauthorized
use of confidential and sensitive information, and has communicated to all relevant staff regarding this matter. In
addition, only Directors and delegated officers can act as the Company’s spokesperson and respond to external
enquiries about the Company’s affairs.
The Board, through the Audit Committee of the Company, conducts a continuous review of the effectiveness of the
internal control system operating in the Company and considers it is adequate and effective. The review covers all
material controls, including financial, operational and compliance controls, and risk management functions. The
Board is not aware of any significant areas of concern which may affect the shareholders. The Board is satisfied
that the Company has fully complied with the code provisions on internal controls as set forth in the CG Code.