Vtech 2008 Annual Report Download - page 29

VTech Holdings Ltd Annual Report 2008 27
CONTINUING CONNECTED TRANSACTIONS CONTINUED
(B) On 10th August 2007, VTech Communications Limited
(“VCL”), an indirectly wholly owned subsidiary of the
Company as manufacturer, and Ality Limited (“Ality”) as
purchaser entered into a Manufacturing Agreement for an
initial term of 24 months commencing 10th August 2007
for the supply by VCL of electronic products to Ality with
an annual cap of HK$28.68 million in transaction value for
the year ended 31st March 2008. Ality is a company which
is wholly owned by Mr. William WONG Yee Lai, the son of
Dr. WONG. Ality is therefore a connected person of the
Company.
The independent non-executive directors of the Company have
reviewed the continuing connected transactions and con rmed
that the transactions have been (i) entered into in the ordinary
and usual course of business of the Group; (ii) either on normal
commercial terms or terms no less favourable to the Group than
terms available to or from independent third parties; and
(iii) in accordance with the relevant agreements governing them
on terms that are fair and reasonable and in the interests of the
shareholders of the Company as a whole.
Pursuant to Rule 14A.38 of the Listing Rules, the Company
has engaged the auditors of the Company to perform certain
factual  nding procedures in respect of the continuing
connected transactions of the Group in accordance with the
Hong Kong Standard on Related Services 4400 “Engagements
to Perform Agreed-Upon Procedures Regarding Financial
Information” issued by the Hong Kong Institute of Certi ed
Public Accountants. The auditors have reported their factual
 ndings on these procedures to the Board and con rmed that
for the year ended 31st March 2008, the continuing connected
transactions (i) have received the approval of the Board; and
(ii) have charged for the price in accordance with the pricing
terms set out in the relevant agreement governing such
transactions or where the related agreement did not clearly
specify a price, were consistent with the price charged for
comparable transactions that were identi ed by management;
and (iii) have been entered into in accordance with the
relevant agreements governing the transactions, and (iv) have
not exceeded the cap amounts disclosed in the respective
announcements.
ANNUAL GENERAL MEETING
The following special business will be proposed at the annual
general meeting to be held on 5th September 2008:
1. the grant to the directors of the Company of a general
mandate to repurchase shares representing up to 10% of
the issued share capital of the Company as at the date of
the annual general meeting;
2. the grant to the directors of the Company of a general
mandate to allot, issue and otherwise deal with shares
representing up to 10% of the issued share capital of the
Company as at the date of the annual general meeting;
3. the grant to the directors of a general authority to allot,
issue and otherwise deal with shares of the aggregate
amount of the shares repurchased under the repurchase
mandate; and
4. the refreshment of the Scheme Mandate Limit under the
Share Option Scheme 2001.
The Directors believe that an authority given to the Directors
to allot and issue shares and to repurchase shares would give
the Company additional  exibility that would be bene cial. As
for the repurchase mandate, the Directors would only make
a repurchase in circumstances where they consider it to be in
the best interests of the Company and in circumstances where
they consider that the shares can be repurchased on favourable
terms. The proposed refreshment of Scheme Mandate Limit
shall enable the Share Option Scheme 2001 to continue to
provide incentives and rewards to the employees of the Group.
AUDITORS
The  nancial statements have been audited by KPMG, who
retire and, being eligible, o er themselves for re-appointment
at the forthcoming annual general meeting of the Company.
A resolution for the re-appointment of KPMG as auditors of the
Company will be proposed at the forthcoming annual general
meeting of the Company.
By Order of the Board
Allan WONG Chi Yun
Chairman
Hong Kong, 3rd July 2008