Lenovo 2012 Annual Report Download - page 62

2011/12 Annual Report Lenovo Group Limited
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AUDIT COMMITTEE REPORT
• Reviewedanddiscussedwithmanagementon
significant judgements and key assumptions together
with presentational and disclosure issues associated
with accounting standards and interpretive guidance
affecting the Group’s financial statements and
financial results announcements; items reviewed and
discussed included (a) the accounting treatment for
the joint ventures with NEC Corporation and Compal
Electronics, Inc. respectively and the acquisition of
Medion AG, (b) the carrying value of the Group’s
goodwill and the reallocation thereof following the
restructuring of the geographical reporting segments
and (c) the provisions for warranty costs, expected
returns, slow moving inventories and doubtful
receivables;
• Reviewedthestatutoryaccountsfilingprogressofthe
Group;
Review of Internal Controls and Risk Management
Systems
• DiscussedtheyearlyinternalauditplanoftheGroup
to ensure adequate scope, coverage over the activities
of the Group and the resource requirements of internal
audit to carry out its functions and also reviewed the
results of the internal audit work quarterly;
• Reviewedtheeffectivenessoftheinternalcontrol
system (including the adequacy of resources, staff
qualification and experience, training programmes and
budget of the Group’s internal audit, accounting and
financial reporting function) operating in the Company
and reviewed the corrective actions taken by the
management;
• Reviewedtheenterpriseriskmanagementofthe
Group including a summary of the work performed
in FY2010/11 and the plan for FY2011/12; assessed
the risk universe and the high risk items and reviewed
the steps taken by management to control these
risks; reviewed the crisis management following the
earthquake in Japan and the flooding in Thailand;
• Reviewedtheglobalbusinesspartnermanagement
process of the Group and the steps for its
improvement;
• ReviewedtheLenovoLine,awhistleblowing
mechanism of the Group for employees to raise
concerns about possible improprieties in financial
reporting, internal control or other matters, and the
proposed enhancements to this mechanism;
Relationship with External Auditor
• Reviewedandconsideredtheexternalauditor’s
statutory audit scope for the fiscal year 2011/12,
including their plan and the terms of engagement, and
the letter of representation to be given by the Board;
• Reviewedtheresultsoftheaudit,thereportsand
management letters submitted by external auditor,
which summarised matters arising from their audit
on the Group during the year ended March 31,
2012, together with management’s responses and/or
comments to the findings;
• Assessedtheexternalauditor’sindependenceand
objectivity by considering the provision of non-audit
services by the external auditor;
• EvaluatedtheperformanceofPwCandrecommended
to the Board for approval the re-appointment PwC as
external auditor of the Group for the year ended March
31, 2012;
Others
• Reviewedthecontinuingconnectedtransactionsas
set out in the directors’ report of 2010/11 annual
report of the Company and received the external
auditor’s confirmation letter on continuing connected
transaction of the Group;
• ReceivedandreviewedthereportsfromGeneral
Counsel regarding legal matters of the Group;