Vtech 2006 Annual Report Download - page 26

VTech Holdings Ltd Annual Report 2006 23
Board Committees
The Board has established four
committees with specific responsibilities
as described below. The terms of
reference of the Remuneration
Committee, Nomination Committee
and Audit Committee are posted on
the Company’s website.
Remuneration Committee
The Remuneration Committee is
chaired by Mr. Michael TIEN Puk Sun
with Mr. Raymond CH’IEN Kuo Fung
and Mr. William FUNG Kwok Lun as
members, all are independent non-
executive directors. It is responsible for
reviewing and recommending all
elements of the executive directors and
senior management remuneration. The
fees of the non-executive directors are
determined by the Board.
The Remuneration Committee was
established on 22nd June 2005 and
met once during the year to review and
adopt the terms of reference. It also
reviewed the level of remuneration paid
to executive directors. Up to the date of
the Annual Report, the Remuneration
Committee reviewed the Group’s
remuneration policy and reviewed the
remuneration package of the executive
directors and senior management for
the year ended 31st March 2006.
Nomination Committee
The Nomination Committee, chaired by
Mr. William FUNG Kwok Lun with
Mr. Patrick WANG Shui Chung and
Mr. Allan WONG Chi Yun as members (a
majority of the members are independent
non-executive directors), was established
on 21st June 2006. It is responsible for
reviewing the Board composition and
identifying and nominating candidates
for appointment to the Board such that it
has the required blend of skills,
knowledge and experience.
Audit Committee
The Audit Committee is chaired by
Mr. Raymond CH’IEN Kuo Fung with
Mr. William FUNG Kwok Lun and
Mr. Michael TIEN Puk Sun as members,
all are independent non-executive
directors. It has been established to
assist the Board in fulfilling its oversight
responsibilities for financial reporting,
risk management and evaluation of
internal controls and auditing
processes. It also ensures that the
Group complies with all applicable laws
and regulations.
Mr. Raymond CH’IEN Kuo Fung has the
appropriate financial management
expertise as required under the Listing
Rules. The Audit Committee held two
meetings during the year. It reviewed
work done by internal and external
auditors, the relevant fees and terms,
reports from external auditors in
relation to the interim and annual
financial statements, and receives
regular reports from the internal audit
functions in accordance with the
Committee’s terms of reference. The
meetings were attended by the
Chairman, Chief Compliance
Officer, Chief Financial Officer and
external auditors.
Auditors’ Remuneration
An analysis of remuneration in respect
of audit and non-audit services
provided by KPMG, the auditors, is
shown in note 2 to the financial
statements.
Risk Management Committee
The Risk Management Committee,
comprising the executive directors, held
two meetings during the year to review
the Group’s risk management and
internal control systems.
Responsibilities in Respect of
Financial Statements
The Board is responsible for presenting
a balanced, clear and understandable
assessment of annual and interim
reports, price-sensitive announcements
and other disclosures required under
the Listing Rules and other regulatory
requirements.
The Directors acknowledge their
responsibility to prepare the financial
statements as set out on pages 33 to
34. The statement of the external
auditors about their reporting
responsibilities on the financial
statements is set out on page 32.
Internal Controls
The Directors have the overall
responsibility for internal control,
including risk management, and sets
appropriate policies having regard to the
objectives of the Group. The Directors,
through the Audit Committee, have
continued to review the effectiveness of
the Group’s system of financial and non-
financial controls. The system of internal
control is designed to manage rather
than eliminate the risk of failure to
achieve business objectives and can only
provide reasonable and not absolute
assurance against material misstatement
or loss. Controls are monitored by
management review and by a
programme of internal audits.
The Audit Committee reviews the
effectiveness of the internal control
environment of the Group. It receives
reports from the internal and external
auditors, which include
recommendation for improvement. The
Internal Audit’s work plan based on risk
assessment is discussed and agreed
every year with the Audit Committee.
The Group has put in place an
organisational structure with formal
defined lines of responsibility and
delegation of authority. There are also
established procedures for planning,
capital expenditure, treasury
transactions, information and reporting
systems, and for monitoring the
Group’s businesses and performance.
Code of Conduct
Employees are required to strictly follow
the Code of Conduct to ensure the
Group operates to the highest
standards of business conduct and
ethics in our dealings with customers,
business partners, shareholders,
employees and the business
communities. Every employee is
provided a copy of the Code of
Conduct and they are required to
confirm compliance with the Code in
writing each year.