Vtech 2011 Annual Report Download - page 27

VTech Holdings Ltd Annual Report 2011 25
Board Committees (Continued)
Remuneration Committee
The Remuneration Committee is chaired by Mr. Michael TIEN Puk
Sun with Dr. William FUNG Kwok Lun, Mr. Denis Morgie HO Pak
Cho and Dr. David SUN Tak Kei as members. All of the members
are independent non-executive directors. It is responsible for
reviewing and recommending all elements of the executive
directors and senior management remunerations.
The emoluments of directors are based on skills, knowledge
and performance, together with reference to the profitability of
the Company, and prevailing market conditions. The Company
has established a share option scheme (the “2001 Scheme”)
to provide long term incentive for the executive directors and
senior management, and a share purchase scheme to motivate
employees and attract suitable personnel for continuous
development of the Group.
The Remuneration Committee met once during the year.
The Remuneration Committee discussed and reviewed the
remuneration packages for all executive directors and senior
management. The Remuneration Committee also reviewed and
approved the establishment of the share purchase scheme.
Nomination Committee
The Nomination Committee is chaired by Dr. William FUNG Kwok
Lun with Mr. Denis Morgie HO Pak Cho, Dr. David SUN Tak Kei,
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 directors may be
sourced internally or externally through various channels such
as 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
considered the appointment of an independent non-executive
director, and the nomination was accepted by the Board.
Audit Committee
The Audit Committee is chaired by Mr. Denis Morgie HO Pak
Cho, with Dr. William FUNG Kwok Lun, Dr. David SUN Tak Kei
(appointed on 25 January 2011), Mr. Michael TIEN Puk Sun and
Dr. Patrick WANG Shui Chung (ceased to be a member on
25 January 2011) 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 and were attended by the Chief Compliance
Officer, the Chief Financial Officer and the external auditor.
In addition, the Chairman of Audit Committee held periodic
independent meetings with the Chief Financial Officer, the Chief
Compliance Officer and the external auditor. Work performed by
the Audit Committee during the year included, but not limited to,
reviewing the following:
– unaudited Group financial statements for the six months
ended 30 September 2010;
– report from the external auditor based on limited agreed
upon procedures on the unaudited Group financial
statements for the six months ended 30 September 2010;
– accounting principles and practices adopted by the Group;
– implementation of applicable International Financial
Reporting Standards;
– appointment of the external auditor and their remuneration;
– significant findings by the Internal Audit Department and
recommendations for corrective actions; and
– respective audit plans of the internal and external auditors.
During the year, the Audit Committee has organised a training
session on accounting, taxation and Listing Rules to directors and
relevant staff.
On 31 May 2011 (the date of this Annual Report), the Audit
Committee met to review the audited Group financial statements
and reports for the year ended 31 March 2011 in conjunction
with the Company’s external auditor and senior management
before recommending them to the Board for consideration and
approval. The Group’s annual results announcement for the year
ended 31 March 2011 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 procedures, and the way in which business
and control risks are managed. Based on the information received
from the management, external auditor and Internal Audit
Department, the Audit Committee is satisfied that the overall
financial and operational controls for the Group continue to be
effective and adequate.
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 external auditor, is shown in
note 2 to the financial statements.