Vtech 2010 Annual Report Download - page 31

VTech Holdings Ltd Annual Report 2010 29
Board Committees (Continued)
Remuneration Committee (Continued)
The emoluments of Directors are based on skills, knowledge
and performance, together with reference to the profitability of
the Company, and prevailing market conditions. Share option
scheme has been established to provide long term incentives for
the executive directors and senior management.
The Remuneration Committee met twice during the year. The
Committee discussed and reviewed the remuneration packages
for all executive directors and senior management, assessing
performance of executive directors and the granting of share
options to the executive directors and senior management. The
Committee also reviewed the proposed 2011 directors’ fees and
made recommendation to the Board.
Nomination Committee
The Nomination Committee is chaired by Dr. William FUNG Kwok Lun
with Mr. Denis Morgie HO Pak Cho, Mr. Michael TIEN Puk Sun,
Dr. Patrick WANG Shui Chung and Dr. Allan WONG Chi Yun as
members. The majority of the members of the Nomination
Committee are independent non-executive directors. It is
responsible for reviewing the Board composition and
identifying and nominating candidates for appointment to the
Board such that it has the relevant blend of skills, knowledge and
experience. Candidates for appointment as executive directors
may be sourced internally or externally using the services of
specialist executive search firms. The aim is to appoint individuals
of the highest calibre in their area of expertise and experience.
The Nomination Committee met once during the year and
reviewed the structure, size and composition of the Board.
Audit Committee
The Audit Committee is chaired by Mr. Denis Morgie HO Pak Cho,
with Dr. William FUNG Kwok Lun and Mr. Michael TIEN Puk Sun
as members. All of the members 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. Denis HO, as Chairman of the Audit Committee, has the
appropriate financial management expertise as required
under the Listing Rules. The Audit Committee held two meetings
during the year. The meetings were attended by the Chairman,
Chief Compliance Officer, Chief Financial Officer and
external auditor. In addition, the Chairman of Audit Committee
held regular meetings with the Chief Financial Officer and
Chief Compliance Officer. Work performed by the Committee
during the year included reviewing the:
– unaudited Group financial statements for the six months
ended 30 September 2009;
– report from the external auditor based on limited agreed
upon procedures on the unaudited Group financial
statements for the six months ended 30 September 2009;
– accounting principles and practices adopted by the Group;
– implementation of applicable International Financial
Reporting Standards;
– appointment of the external auditor and their remuneration;
– Internal Audit Plan for the year ending 31 March 2011;
– significant findings by the internal audit department and
recommendations for corrective actions; and
– enhanced manual on Group Internal Audit Practices and
Procedures.
On 14 June 2010 (the date of this Report), the Audit Committee
met to review the audited Group financial statements and
reports for the year ended 31 March 2010 in conjunction with
the Company’s external auditor, senior management and
internal auditor before recommending them to the Board
for consideration and approval. The Group’s annual results
announcement for the year ended 31 March 2010 has been
agreed by the Group’s external auditor.
The Audit Committee assists the Board in meeting its
responsibilities for maintaining an effective system of internal
control during the year. The Audit Committee reviews the
process by which the Group evaluates its control environment
and risk assessment process, and the way in which business
and control risks are managed. Based on the information
received from management, external auditor and Internal Audit
Department, the Audit Committee is satisfied that the overall
financial and operational controls for the Group continues to be
effective and adequate.
On 14 June 2010, Dr. Patrick WANG Shui Chung, an independent
non-executive director of the Company, has been appointed as
the member of Audit Committee with effect from 15 June 2010.
External Auditor
The Audit Committee reviews and monitors the external auditor’s
independence and objectivity. It also meets with the auditor to
consider the nature, scope and results of their audit with senior
management.
During the year, the fees in respect of audit and non-audit
services provided by KPMG, the auditor, is shown in note 2 to the
financial statements.