Vtech 2012 Annual Report Download - page 32

30 VTech Holdings Ltd Annual Report 2012
Corporate Governance Report
The Nomination Committee met once during the year and
reviewed the structure, size and composition of the Board and the
revised Nomination Committee Charter.
Remuneration Committee
The Remuneration Committee is chaired by Mr. Michael TIEN Puk Sun
with Dr. William FUNG Kwok Lun, Mr. Denis Morgie HO Pak Cho
and Dr. David SUN Tak Kei as members. All of the members are
independent non-executive Directors. It is responsible for
reviewing and recommending all elements of the executive
Directors and senior management remunerations to the Board.
The emoluments of Directors are based on skills, knowledge and
performance, together with reference to the profitability of the
Company, and prevailing market conditions. In addition, the
Company has established a share option scheme to provide
incentives and rewards to eligible participants, and a share
purchase scheme to motivate employees and attract suitable
personnel for continuous development of the Group.
The Remuneration Committee held two meetings during the year.
The Remuneration Committee discussed and reviewed a new 2011
share option scheme, granting of share options to the executive
Directors and senior management and the revised Remuneration
Committee Charter. The Remuneration Committee also reviewed
the remuneration packages for all executive Directors and senior
management and the shares to be awarded under the share
purchase scheme.
Risk Management Committee
The Risk Management Committee is chaired by Dr. Allan WONG
Chi Yun with Dr. PANG King Fai, Mr. Andy LEUNG Hon Kwong and
Dr. David SUN Tak Kei as members. The Risk management
committee held two meetings during the year to review the
Group’s risk management and internal control systems and their
effectiveness. The Risk Management Committee has put in place
policies and procedures for the identification and management of
risks.
The Risk Management Committee has developed a framework for
the management and control of risks in the Group. Risks are being
more formally identified and recorded in the Risk Register for key
operations. This Risk Register is updated regularly and the major
risks are being reviewed from time to time by the Risk Management
Committee.
The Risk Management Committee also ensures that any new and
emerging risks are promptly identified, evaluated and appropriate
actions are taken by the management. This requires the active and
frequent participation by the process owner of each function in
identifying risks affecting its business and implementing measures
to reduce such risks, as well as the active monitoring on the
progress of the improvement in internal control procedures.
External Auditor
The Audit Committee reviews and monitors the external auditor’s
independence and objectivity. It also meets with the external
auditor to consider the nature, scope and results of their audit with
senior management.
During the year, the fees in respect of audit and non-audit services
provided by KPMG, the external auditor, is shown in note 2 to the
financial statements.
Board Committees (Continued)
Audit Committee (Continued)
– report from the external auditor based on limited agreed-upon
procedures on the unaudited Group Interim Financial Report
for the six months ended 30 September 2011 in the 2011/2012
Interim Report of the Company;
– accounting principles and practices adopted by the Group;
– implementation of applicable International Financial Reporting
Standards;
– appointment of the external auditor and their remuneration;
– significant findings by the Internal Audit Department and
recommendations for corrective actions;
– respective audit plans of the internal and external auditors; and
– revised Audit Committee Charter.
During the year, the Audit Committee has organised a one-day
training session conducted by qualified professionals on
accounting, taxation and Listing Rules to Directors and relevant
staff.
On 23 May 2012 (the date of this Annual Report), the Audit
Committee met to review the audited Group financial statements
and reports for the year ended 31 March 2012 in conjunction with
the Company’s external auditor and senior management before
recommending them to the Board for consideration and approval.
The financial results for the year ended 31 March 2012 have been
reviewed with no disagreement by the Audit Committee. The
figures in respect of the preliminary announcement of the Group’s
results for the year ended 31 March 2012 have been agreed with
the Company’s external auditor to the amounts set out in the
Group’s consolidated financial statements for the year.
The Audit Committee assists the Board in meeting its
responsibilities for maintaining an effective system of internal
control during the year. The Audit Committee reviews the process
by which the Group evaluates its control environment and risk
assessment procedures, and the way in which business and control
risks are managed. Based on the information received from the
management, the external auditor and the Internal Audit
Department, the Audit Committee is satisfied that the overall
financial and operational controls for the Group continue to be
effective and adequate.
The Audit Committee has also been given the responsibility to
oversee the effectiveness of formal procedures for employees to
raise any matters of serious concerns and is required to review any
reports made under this by the Internal Audit Department.
Nomination Committee
The Nomination Committee is chaired by Dr. William FUNG Kwok
Lun with Mr. Denis Morgie HO Pak Cho, Dr. David SUN Tak Kei, 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 relevant blend of skills, knowledge and
experience. Candidates for appointment as Directors may be
sourced internally or externally through various channels such as
using the services of specialist executive search firms. The aim is to
appoint individuals of the highest calibre in their area of expertise
and experience.