Vtech 2009 Annual Report Download - page 26

24 VTech Holdings Ltd Annual Report 2009
CORPORATE GOVERNANCE REPORT
BOARD COMMITTEES (CONTINUED)
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
and their effectiveness. The Committee also ensured that
any new and emerging risks are promptly evaluated and
appropriate actions are taken by the management.
RESPONSIBILITIES IN RESPECT OF
FINANCIAL STATEMENTS
The Board is responsible for the timely presentation of
balanced, clear and understandable 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 page 33. The
statement of the external auditors about their reporting
responsibilities on the financial statements is set out on
page 33.
INTERNAL CONTROLS
The Directors have the overall responsibility for internal
control, including risk management, and set appropriate
policies having regard to the objectives of the Group. The
Directors, through the Audit Committee, have conducted an
annual review of 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 annual review also considered the adequacy of
resources, qualifications and experience of staff of the
Group’s accounting and financial reporting function, and
their training programmes and budget.
The Audit Committee reviews the effectiveness of the
internal control environment of the Group. The Internal
Audit Department carries out annual risk assessment on
each audit area and derives an annual audit plan according
to their risk rankings. The audit plan is reviewed and
approved by the Audit Committee. In addition to the agreed
schedule of work, the Internal Audit Department conducts
other review and investigative work as may be required.
The Audit Committee receives summary reports from the
internal and external auditors periodically. The results of
internal audit reviews and responses to the recommended
corrective actions are reported to the executive directors
and Audit Committee. The Internal Audit Department is
also responsible for following up the corrective actions to
ensure that satisfactory controls are maintained. The Audit
Committee considered that the key areas of the corrective
actions required for the year were reasonably implemented.
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 their performance.
WHISTLEBLOWER POLICY
The Group maintains a whistleblower policy to facilitate
the raising of concerns by employees. Procedures are
established for employees to report complaints and
internal malpractice directly to the Chief Compliance
Officer, who will review complaints and determine the
mode of investigation and subsequent corrective action.
Recommendations on improvements are communicated
to the respective departments senior management for
implementation. The Chief Compliance Officer reports the
results of the review of the complaints received to the Audit
Committee twice a year.
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 is required to confirm
compliance with the Code in writing each year.