Vtech 2006 Annual Report Download - page 25

Corporate Governance Report
VTech Holdings Ltd Annual Report 200622
VTech Holdings Limited is incorporated
in Bermuda. The Company has its
primary share listing on The Stock
Exchange of Hong Kong Limited (the
“Hong Kong Stock Exchange”) and
London Stock Exchange plc. The
primary corporate governance rules
applicable to the Company is the Code
on Corporate Governance Practices (the
“Code”) as set out in Appendix 14 to
the Rules Governing the Listing of
Securities on the Hong Kong Stock
Exchange (the “Listing Rules”).
Throughout the year ended 31st March
2006, the Company has complied with
all the code provisions of the Code and
to a large extent, the recommended
best practices in the Code except for
the deviation from code provision A.2.1
of the Code as described below:
Under code provision A.2.1 of the
Code, the roles of chairman and chief
executive officer should be separate and
should not be performed by the same
individual. Mr. Allan WONG Chi Yun
has the combined role of Chairman and
Group Chief Executive Officer. The
Board of Directors (the “Board”)
considers that this structure will not
impair the balance of power and
authority between the Board and the
management of the Group as the non-
executive directors form the majority of
the Board of which four out of six are
independent. The Board believes the
appointment of Mr. Allan WONG to the
posts of Chairman and Group Chief
Executive Officer is beneficial to the
Group as he has considerable industry
experience.
The Company is not subject to the
Combined Code on Corporate
Governance under the Listing Rules of
the Financial Services Authority in the
United Kingdom (the “UK Listing
Rules”) that applies to United Kingdom
incorporated companies.
Model Code for Securities
Transactions
The Company has adopted the Model
Codes as set out in Appendix 10 of the
Listing Rules and Appendix to Chapter
16 of the UK Listing Rules regarding
securities transactions by directors and
senior management in relation to the
accounting period covered by the
Annual Report. All Directors confirmed,
following specific enquiry by the
Company, that they have fully complied
with the required standard of dealings
set out therein throughout the year
ended 31st March 2006.
The Board
The Board comprises two executive
directors and four independent non-
executive directors. The names and
brief biographies are set out on page
24 of this report. The non-executive
directors are high calibre executives
with diversified industry expertise and
bring a wide range of skills and
experience to the Group. They bring
independent judgement on issues of
strategy, performance, risk and people
through their contribution at Board
meetings. The Board considers that
four non-executive directors, more than
one third of the Board, are independent
in character and judgement and they
also meet the independence criteria set
out in Rule 3.13 of the Listing Rules. All
non-executive directors are appointed
for a specific term of three years and all
directors are required to submit
themselves for re-election at least once
every three years under the Company’s
Bye-laws.
The Board has received from each
independent non-executive director a
written annual confirmation of
independence pursuant to Rule 3.13 of
the Listing Rules.
The Board’s focus is on the formulation
of business strategy and policy, and
control. Matters reserved for the Board
are those affecting the Company’s
overall strategic policies, finances and
shareholders. These include: financial
statements, dividend policy, the annual
operating budgets and major corporate
activities.
Four Board meetings at approximately
quarterly interval are scheduled for
2006/07 with other meetings are held
as required. All Directors have access to
the advice and services of the Company
Secretary and independent professional
advice may be taken by the Directors as
required.
The attendance of individual members
of the Board and other Board
Committees during the financial year is
set out below:
Meetings attended/Eligible to attend
Audit Remuneration
Board Committee Committee
Executive Directors
Allan WONG Chi Yun 4/4 – –
Albert LEE Wai Kuen 4/4 – –
Independent Non-Executive Directors
Raymond CH’IEN Kuo Fung 2/4 2/2 1/1
William FUNG Kwok Lun 3/4 2/2 1/1
Michael TIEN Puk Sun 4/4 2/2 1/1
Patrick WANG Shui Chung 4/4 – –