Vtech 2008 Annual Report Download - page 21

VTech Holdings Ltd Annual Report 2008 19
The Remuneration Committee met twice during the year. The
Committee discussed and reviewed the remuneration packages
of all executive directors and the granting of share options to
the executive directors and senior management.
Nomination Committee
The Nomination Committee is chaired by Dr. William FUNG
Kwok Lun with Dr. Raymond CH’IEN Kuo Fung, Mr. Michael
TIEN Puk Sun, Dr. Patrick WANG Shui Chung and Dr. Allan
WONG Chi Yun as members. 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 met once during the year and
considered the appointment of two executive directors during
the year.
Audit Committee
The Audit Committee is chaired by Dr. Raymond CH’IEN Kuo
Fung with Dr. 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 ful lling
its oversight responsibilities for  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.
Dr. Raymond CH’IEN is the Chairman of the Audit Committee
and has the appropriate  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  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 O cer, Chief Financial O 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  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
 nancial statements as set out on page 28. The statement of the
external auditors about their reporting responsibilities on the
 nancial statements is set out on page 28.
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 e ectiveness of the Group’s system of  nancial
and non- 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 e ectiveness 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 de ned lines of responsibility and delegation of
authority. There are also established procedures for planning
and budgeting, 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 O 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 O 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 con rm compliance with the
Code in writing each year.