This excerpt taken from the CRGI 20-F filed Aug 11, 2005.
Disclosure Controls and Procedures
Based on their evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the U.S. Securities Exchange Act of 1934) as of March 31, 2005, our Executive Chairman and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of that date.
The Group believes that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. The Groups disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and the Executive Chairman and the Chief Financial Officer have concluded that these controls and procedures are effective at the reasonable assurance level.
In January 2005, the Group began implementation of a detailed plan to achieve compliance with the Sarbanes-Oxley (SOX) Act - Section 404 requirements. The Group engaged Ernst and Young as a consultant for the SOX Section 404 implementation project, and a Zindart SOX Steering Committee and related Project Management Office were formed. During the first quarter of calendar year 2005, the Group completed SOX training and performed a gap analysis of the existing internal controls versus the requirements stipulated in SOX Section 404 for all business segments. In the second quarter of calendar year 2005, the Group commenced review of internal control documentation within Corgis Hong Kong and U.S. operations. Management assessed that according to the current project progress, the Group should be able to meet the SOX Section 404 compliance deadline of March 31, 2007.
The Audit Committee pre-approves all audit, audit-related and non-audit services not prohibited by law to be performed by our independent registered public accounting firm and associated fees prior to the engagement of the independent registered public accounting firm with respect to such services. The Audit Committee approved all of the non-audit services relating to the fees listed above for the fiscal year ended March 31, 2005.