Vtech 2012 Annual Report Download - page 33

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VTech Holdings Ltd Annual Report 2012
Other control and management
Code of Conduct
The Company’s policy on code of conduct is also an important part
of the Group’s internal control process. Employees are required to
strictly follow the code of conduct to ensure the Group operates
to the highest standards of business behaviour and ethics in
our dealings with customers, business partners, shareholders,
employees, and the business community. The policy is reinforced
and monitored by an annual confirmation of compliance in writing.
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 suspected internal
malpractices directly to the Chief Compliance Officer, who will
review the complaints and determine the appropriate mode of
investigation and subsequent corrective action. Recommendations
on improvements are communicated to the respective
department’s senior management for implementation. The
Chief Compliance Officer reports the results of his review of the
complaints received to the Audit Committee twice a year.
Model Code of Securities Transactions
The Company has adopted the Model Code for Securities
Transactions by Directors of Listed Issuers (the “Model Code”) as
set out in Appendix 10 to the Listing Rules regarding securities
transactions by Directors and senior management. After specific
enquiry, all Directors confirmed that they have complied with
the required standard of dealings set out in the Model Code
throughout the year ended 31 March 2012.
Shareholders’ Rights
Under the Company’s Bye-laws, in addition to regular Board
meetings, the Board, on the requisition of shareholders of the
Company holding not less than one-tenth of the paid-up capital of
the Company, may convene a special general meeting to address
specific issues of the Company within 21 days from the date of
deposit of written notice to the registered office of the Company.
The requisition must state the purposes of the meeting, and must
be signed by the requisitionist(s).
Shareholders holding not less than one-twentieth of the total
voting rights of all the shareholders or not less than 100
shareholders may propose any resolution at the next annual
general meeting and circulate to other shareholders written
statement with respect to the matter to be dealt with at the
annual general meeting.
Shareholders may send their enquiries requiring the Board’s
attention to the Company Secretary at the Company’s principal
office address at 23rd Floor, Tai Ping Industrial Centre, Block 1,
57 Ting Kok Road, Tai Po, New Territories, Hong Kong.
Shareholders Communication Policy
The Company has established a Shareholders Communication
Policy to set out the Company’s procedures in providing the
shareholders and the investment community with ready, equal and
timely access to balanced and understandable information about
the Company, in order to enable the shareholders to exercise their
rights in an informed manner, and to allow the shareholders and
the investment community to engage actively with the Company.
Responsibilities in respect of Financial
Statements
The Directors are responsible for overseeing the preparation of the
consolidated financial statements for the year ended 31 March 2012,
to give a true and fair view of the state of affairs of the Group as at
that date and of its profit and cash flows for the year then ended. In
doing so the Directors have adopted the appropriate accounting
policies, applied them consistently in accordance with the
International Financial Reporting Standards and made judgements
and estimates that are prudent and reasonable in preparing the
consolidated financial statements on the going concern basis.
The Directors are responsible for ensuring the maintenance of
proper accounting records, safeguarding of the assets of the
Company and taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The statement by the external auditor of the Company regarding
their responsibilities on the financial statements of the Group is
set out in the Independent Auditor’s Report on page 37 of this
Annual Report.
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 Board, through the
Audit Committee, reviewed the overall effectiveness of the
Group’s system of internal control over financial, operational and
compliance issues, risk management process, information systems
security and effectiveness of financial reporting and compliance
with the Listing Rules, and is satisfied that such systems are
effective and adequate. The Board also considered that the
resources, qualifications and experience of staff of the Company’s
accounting and financial reporting function, and their training
programmes and budget were adequate.
The Group has put in place an organisational structure with formal
and clearly defined lines of responsibility and delegation of
authority. There are also established procedures for financial
planning, capital expenditure, treasury transactions, information
and reporting systems, and monitoring the Group’s businesses and
their performance.
Internal Audit Department
The Internal Audit Department reviews the effectiveness of the
internal control system. The Internal Audit Department carries out
annual risk assessment on each identified audit area and devises
an annual audit plan according to the nature of business and
risk exposures, and the scope of work includes financial and
operational reviews. The audit plan is reviewed and agreed 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 Audit Department periodically while
the results of internal audit reviews and responses to the
recommended corrective actions are also reported to the executive
Directors. The Internal Audit Department is also responsible for
following up on the corrective actions to ensure that satisfactory
controls are maintained.