Lenovo 2014 Annual Report Download - page 76

74 Lenovo Group Limited 2013/14 Annual Report
AUDIT COMMITTEE REPORT
At the meeting held on May 20, 2014, the Audit
Committee reviewed and recommended to the Board
the approval of the audited financial statements of the
Group for the year ended March 31, 2014 together with
the related annual results announcement and this annual
report incorporating the directors’ report and corporate
governance report.
INTERNAL CONTROLS
The Group’s internal control system covers every activity
and transaction. Within this framework, management
performs periodic enterprise wide risk assessments and
continuously monitors and reports the progress of actions
plans to address the key risks. Based on the information
received from management, external auditor and internal
auditor, the Audit Committee concluded that for the
year ended March 31, 2014, the Group’s internal control
system was adequate and effective. Further information
about the internal controls framework and control
processes are set out in the Corporate Governance
Report on pages 57 to 60. The Audit Committee also
confirmed that the Group had, in the fiscal year 2013/14,
satisfactorily complied with the code provisions on
internal controls as set forth in the Corporate Governance
Code and Corporate Governance Report in Appendix 14
to the Listing Rules.
RECOMMENDATION FOR RE-APPOINTMENT
OF THE EXTERNAL AUDITOR
The Audit Committee recognizes the importance
of maintaining the independence of the external
auditor. Consistent with its terms of reference, the
Audit Committee has evaluated PwC’s qualifications,
performance, and independence, including that of the
lead audit partner. The Company has established a
policy pursuant to which non-audit services, provided by
the external auditor must be pre-approved by the Audit
Committee. This policy is more fully described in the
Corporate Governance Report on page 60. The Audit
Committee has concluded that provision of the non-
audit services described in that section was compatible
with maintaining the independence of PwC. In addition,
PwC has provided the Audit Committee an independence
statement confirming that for the year ended March 31,
2014 and thereafter to the date of this annual report, they
are independent of the Group in accordance with the
independence requirements of the Hong Kong Institute of
Certified Public Accountants.
Based on the review and discussions referred to above,
the Audit Committee was satisfied with the external
auditor’s work, its independence and objectivity, and
therefore recommended the re-appointment of PwC
as the Group’s external auditor for the financial year
ending March 31, 2015 for shareholders’ approval at the
forthcoming annual general meeting to be held on July 2,
2014.
PERFORMANCE AND EFFECTIVENESS
The Board undertook an annual review of its committees’
performance and effectiveness. The review concluded
that overall the Audit Committee was effective in carrying
out its duties. Details of the Board and Board committees’
evaluation process can be found under “Board and Board
Committees’ Evaluation” as set out in the Corporate
Governance Report on pages 55 to 56.
PRIORITIES FOR 2014/15
Looking ahead, the priorities of the Audit Committee for
the fiscal year 2014/15 are:
• To stay focused on financial accounting and
reporting, audit quality, internal controls and risk
management.
• To remain vigilant on the impacts of the economic
conditions on the Group.
• To focus on the integration of the Group’s control
processes into new acquisitions.
Members of the Audit Committee*
Mr. Nicholas C. Allen (Chairman)
Mr. Ting Lee Sen
Ms. Ma Xuezheng
* Mr. William Tudor Brown was appointed as a member of the Audit
Committee with effect from May 22, 2014.