Vtech 2002 Annual Report Download - page 33

Annual Report 2002 31
Report of the Directors
CONNECTED TRANSACTIONS
The Company has entered into certain transactions during the year ended 31st March 2002 which also constitute connected transactions for the
Company under Chapter 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and
Chapter 11 of the Listing Rules of the Financial Services Authority in the United Kingdom (as the case may be) as set out below:
On 26th March 2002, VTech Electronics Holdings Limited (“VTE”), a wholly-owned subsidiary of the Company, entered into a sale and purchase
agreement with Mr. Jean VINCENT and Mr. Patrick WAWRZYNIAK to sell the 64% interest in the issued share capital of Fagoe Limited (a non wholly-
owned subsidiary of the Company) held by the Group to Mr. Jean VINCENT and Mr. Patrick WAWRZYNIAK. VTE also entered into a sale and purchase
agreement with Mr. Jean VINCENT to sell the 73% interest in the issued share capital of VJV Services SARL (a non wholly-owned subsidiary of the
Company) held by the Group to Mr. Jean VINCENT.
Mr. Jean VINCENT was a substantial shareholder of each of Fagoe Limited and VJV Services SARL and therefore a connected person of the Company
as defined in the Listing Rules. The entering into of these agreements by VTE constituted connected transactions for the Company.
MATERIAL LEGAL PROCEEDINGS
On 7th June 2002, the Group and Lucent Technologies Inc. (“Lucent”) settled the lawsuit filed by the Group against Lucent in January 2001 in a
mutually satisfactory manner. There was no admission of wrongdoing by either party. Under the terms of the settlement, Lucent has agreed to
adjust the purchase price of the acquisition downward by US$50 million, such amount will be fully settled in cash on or before 3rd July 2002.
ANNUAL GENERAL MEETING SPECIAL BUSINESS
The following special business will be proposed at the annual general meeting to be held on 9th August 2002:
1. the grant to the directors of the Company of a general mandate to repurchase shares of the Company;
2. the grant to the directors of the Company of a general mandate to allot, issue and deal with additional shares of the Company; and
3. the extension of the general mandate which will be granted to the directors of the Company to allot, issue and deal with additional shares
of the Company by adding the number of shares repurchased under the repurchase mandate.
AUDIT COMMITTEE
The Audit Committee has reviewed with management the accounting principles and practices adopted by the Group and discussed internal
control and financial reporting matters including the audited financial statements.
The current members of the Audit Committee comprised:
Mr. Raymond CH’IEN Kuo Fung (appointed on 28th November 2001)
Mr. William FUNG Kwok Lun (appointed on 28th November 2001)
Mr. Michael TIEN Puk Sun (appointed on 28th November 2001)
Other members of the Audit Committee during the year under review:
Mr. Nils Erik Vilhelm MARTENSSON (ceased to be a member on 28th November 2001)
Mr. Philip Leigh TOSE (ceased to be a member on 28th November 2001)
Mr. Patrick WANG Shui Chung (appointed on 28th November 2001 and ceased to be a member on 26th March 2002)
CODE OF BEST PRACTICE
In the opinion of the directors, the Company has complied with the Code of Best Practice as set out in Appendix 14 of the Rules Governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited throughout the accounting period except that certain independent non-
executive directors of the Company are not appointed for a specific term.
AUDITORS
The financial statements have been audited by PricewaterhouseCoopers, who retire and, being eligible, offer themselves for re-appointment.
PricewaterhouseCoopers replaced Price Waterhouse on 6th August 1999 following the merger of Price Waterhouse and Coopers & Lybrand.
By Order of the Board
Allan WONG Chi Yun
Chairman
Hong Kong, 26th June 2002