Lenovo 2011 Annual Report Download - page 39

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2010/11 Annual Report Lenovo Group Limited
42
CORPORATE GOVERNANCE
EXTERNAL AUDITOR
The Group’s external auditor is PricewaterhouseCoopers (“PwC”), who is remunerated mainly for its audit services
provided to the Group. The Company has adopted a policy on engagement of external auditor for non-audit
services, under which the external auditor is required to comply with the independence requirements under Code of
Ethics for Professional Accountants issued by Hong Kong Institute of Certified Public Accountants. External auditor
may provide certain non-audit services to the Group given that these do not involve any management or decision
making functions for and on behalf of the Group; or perform any self assessments; or acting in an advocacy role
for the Company. The engagement of the external auditor for permitted and approved non-audit services shall be
approved by the Audit Committee if the value of such non-audit services equals to or above US$320,000.
During the year, PwC provided audit and insignificant non-audit services to the Group.
The fees paid or payable to PwC for audit and non-audit services for the financial year ended March 31, 2011 and
the comparative figures for the financial year ended March 31, 2010 are as follows:
2011 2010
US$mn US$mn
Audit
– 2009/10 –3.6
– 2010/11 4.0 –
4.0 3.6
Non-audit 0.6 0.5
Total 4.6 4.1
INTERNAL CONTROL
The Board acknowledges its responsibility to ensure the Company maintains sound and effective internal controls.
This is achieved through a defined management structure with specified limits of authority and defined control
responsibility to:
• Achievebusinessobjectivesandsafeguardassetsagainstunauthorizeduseordisposition;
• Ensuremaintenanceofproperaccountingrecordsfortheprovisionofreliablefinancialinformationforinternal
use or for publication; and
• Ensurecompliancewiththerelevantlegislationandregulations.
To achieve this, the Company has established an integrated framework of internal controls which is consistent with
the COSO (the Committee of Sponsoring Organizations of the Treadway Commission) framework.
The internal control system of the Company covers every activity and transaction. Within this framework, management
performs 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.