Vtech 2007 Annual Report Download - page 21

VTech Holdings Ltd
Annual Report 2007 19
Nomination Committee
The Nomination Committee is chaired
by Mr. William FUNG Kwok Lun with
Mr. Patrick WANG Shui Chung and
Mr. Allan WONG Chi Yun as members.
Mr. Raymond CH’IEN Kuo Fung
and Mr. Michael TIEN Puk Sun were
appointed as additional committee
members in April 2007. The majority
of the members of the Nomination
Committee are independent non-
executive directors. It is responsible for
reviewing the Board composition and
identifying and nominating candidates
for appointment to the Board such
that it has the required blend of skills,
knowledge and experience.
The Nomination Committee was
established on 21st June 2006 and
did not held any meeting during the
fi nancial year.
The Nomination Committee met once
in April 2007 and considered the
appointments of Mr. Edwin YING Lin Kwan
and Mr. PANG King Fai to the Board as
executive directors.
Audit Committee
The Audit Committee is chaired by
Mr. Raymond CH’IEN Kuo Fung with
Mr. William FUNG Kwok Lun and
Mr. Michael TIEN Puk Sun as members,
all of whom are independent non-
executive directors. It has been
established to assist the Board in
fulfi lling its oversight responsibilities for
fi nancial reporting, risk management
and evaluation of internal controls and
auditing processes. It also ensures that
the Group complies with all applicable
laws and regulations.
Mr. Raymond CH’IEN is the Chairman
of the Audit Committee and has the
appropriate fi nancial management
expertise as required under the Listing
Rules. The Audit Committee held two
meetings during the year. It reviewed
the work done by internal and external
auditors, the relevant fees and terms,
reports from external auditors in
relation to the interim and annual
fi nancial statements, and receives
regular reports from the internal
audit functions in accordance with
the Committee’s term of reference.
The meetings were attended by the
Chairman, Chief Compliance Offi cer,
Chief Financial Offi cer and external
auditors.
Auditors’ Remuneration
An analysis of remuneration in respect
of audit and non-audit services
provided by KPMG, the auditors,
is shown in note 2 to the fi nancial
statements.
Risk Management Committee
The Risk Management Committee,
comprising the executive directors, held
two meetings during the year to review
the Group’s risk management and
internal control systems.
RESPONSIBILITIES IN
RESPECT OF FINANCIAL
STATEMENTS
The Board is responsible for presenting
a balanced, clear and understandable
assessment of annual and interim
reports, price-sensitive announcements
and other disclosures required under
the Listing Rules and other regulatory
requirements.
The Directors acknowledge their
responsibility to prepare the fi nancial
statements as set out on page 29. The
statement of the external auditors
about their reporting responsibilities on
the fi nancial statements is set out on
page 29.
INTERNAL CONTROLS
The Directors have the overall
responsibility for internal control,
including risk management, and sets
appropriate policies having regard
to the objectives of the Group.
The Directors, through the Audit
Committee, have conducted an
annual review of the effectiveness of
the Group’s system of fi nancial and
non-fi nancial controls. The system of
internal control is designed to manage
rather than eliminate the risk of failure
to achieve business objectives and
can only provide reasonable and not
absolute assurance against material
misstatement or loss. Controls are
monitored by management review and
by a programme of internal audits.
The Audit Committee reviews the
effectiveness of the internal control
environment of the Group. The Internal
Audit Department carries out annual
risk assessment on each audit area and
derives an annual audit plan according
to their risk rankings. The audit plan
is reviewed and agreed by the Audit
Committee. In addition to the agreed
schedule of work, the Internal Audit
Department conducts other review and
investigative work as may be required.
The Audit Committee receives summary
reports from the internal and external
auditors periodically. The results of
internal audit reviews and responses to
the recommended corrective actions
are reported to the Executive Directors
and Audit Committee. The Internal
Audit Department is also responsible
for following up the corrective actions
to ensure that satisfactory controls
are maintained. The Audit Committee
considered that the key areas of the
corrective action were reasonably
implemented.
The Group has put in place an
organisational structure with formal
defi ned lines of responsibility and
delegation of authority. There are
also established procedures for
planning, capital expenditure, treasury
transactions, information and reporting
systems, and for monitoring the Group’s
businesses and their performance.
WHISTLEBLOWER POLICY
The Group maintains a whistleblower
policy to facilitate the raising of
concerns by employees. Procedures are
established for employees to report
complaints and internal malpractice
directly to the Chief Compliance
Offi cer, who will review complaints and
determine the mode of investigation
and subsequent corrective action.
Recommendations on improvements
are communicated to the respective
departments senior management for
implementation. The Chief Compliance
Offi cer reports the results of their
review of the complaints received to the
Audit Committee twice a year.
CODE OF CONDUCT
Employees are required to strictly
follow the Code of Conduct to
ensure the Group operates to
the highest standards of business
conduct and ethics in our dealings
with customers, business partners,
shareholders, employees, and the
business communities. Every employee
is provided a copy of the Code of
Conduct and they are required to
confi rm compliance with the Code in
writing each year.
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