Vtech 2004 Annual Report Download - page 29

27
Report of the
Directors
VTech Holdings Ltd Annual Report 2004
Save as disclosed above, the Company has not been notified by
any person (other than the directors of the Company) who had
interests or short positions in the shares or underlying shares of the
Company as at 31st March 2004 which were required to be
disclosed to the Company under Part XV of the SFO, or which were
recorded in the register required to be kept by Company under
Section 336 of the SFO or which were required to be notified to the
UK Listing Authority pursuant to Paragraphs 9.11 to 9.14 of the UK
Listing Rules.
MANAGEMENT CONTRACTS No contracts concerning the
management and administration of the whole or any substantial
part of the business of the Company were entered into or existed
during the year.
SECURITIES PURCHASE ARRANGEMENTS At the annual
general meeting held on 6th August 2003, shareholders renewed
the approval of a general mandate authorising the directors to
effect repurchases of the Company’s own shares up to a limit of
10% of the shares in issue as at that date.
PURCHASE, SALE OR REDEMPTION OF LISTED SHARES The
Company has not redeemed any of its shares during the year.
Neither the Company nor any of its subsidiaries has purchased or
sold any of the Company’s shares during the year.
MAJOR CUSTOMERS AND SUPPLIERS During the year, the
Group’s largest supplier accounted for approximately 13.3% of the
total value of the Group’s purchases and the five largest suppliers
in aggregate accounted for 32.7% of the total value of the Group’s
purchases. The Group’s largest customer accounted for
approximately 13.9% of the Group revenue and the Group’s five
largest customers in aggregate accounted for approximately 41.0%
of the Group revenue during the year.
None of the directors, their associates or any shareholder (who, to
the knowledge of the directors, owns more than 5% of the
Company’s share capital) had an interest in the customers and the
suppliers noted above.
PRE-EMPTIVE RIGHTS There is no provision for pre-emptive
rights under the Bye-laws of the Company and there are no
statutory restrictions against such rights under the laws of
Bermuda in which the Company is incorporated.
SHARE OPTION SCHEME The Company operates share option
scheme for the purposes of providing incentives and rewards to
eligible participants who contribute to the success of the Group’s
operations. Eligible participants of these share option schemes
include executive directors and employees of the Company and its
subsidiaries.
On 10th August 2001, the Company adopted a share option
scheme (the “2001 Scheme”) under which the directors may, at
their discretion, at any time during the 10 years from the date of
adoption of the 2001 Scheme, invite employees of the Company
and any subsidiaries of the Group, including executive directors
(but excluding non-executive directors) to take up shares of the
Company in accordance with the terms of the 2001 Scheme.
HomeRelay Communications, Inc. (“HomeRelay”), a subsidiary of
the Company, located and established under the laws of the
United States of America, adopted a stock option plan in August
2000 (the “HomeRelay Plan”). Under the HomeRelay Plan,
HomeRelay may grant up to 10% of HomeRelay’s common stock
and a committee designated by the board of directors of
HomeRelay may fix the terms and vesting of the options which in
no event shall exceed 10 years. All outstanding stock options of
HomeRelay Plan lapsed since 10th September 2003 as a result of
the termination of employment of the relevant grantees under the
HomeRelay Plan.
Details of the 2001 Scheme and the HomeRelay Plan are set out in
note 18 to the financial statements.
CONNECTED TRANSACTION As announced on 11th April 2003
and 14th May 2004, the Company has entered into a transaction
which constituted a connected transaction of the Company under
the Listing Rules and Chapter 11 of the UK Listing Rules (as the
case may be) as set out below:
On 11th April 2003, the Company as tenant entered into a lease
(the “Lease”) with Aldenham Company Limited (“Aldenham”) as
landlord for the lease of the premises situated at Bowen Road,
Hong Kong for 2 years commencing on 1st April 2003 and expiring
on 31st March 2005 at a monthly rental of HK$250,000 for the
purpose of providing housing to Mr. Allan WONG Chi Yun (“Mr.
WONG”), a director and a substantial shareholder holding 41.22%
of the entire issued share capital of the Company at that time. As at
11th April 2003 when the Lease was entered into, Aldenham was
50% owned by the spouse of Mr. WONG and 50% indirectly owned
by a trust, the discretionary objects of which were Mr. WONG and
his family members. Aldenham subsequently became an indirect
wholly-owned subsidiary of the said trust, the beneficiaries of
which are family members of Mr. WONG, a director, the chief
executive and a substantial shareholder.
ANNUAL GENERAL MEETING The following business will be
proposed at the annual general meeting to be held on 13th August
2004:
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;