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/ China Communications Services Corporation Limited /
Report of the Directors
The auditors of the Company have performed procedures on the continuing connected transactions and issued a
letter to the Board to advise that:
1.
the continuing connected transactions entered into between the Group and China Telecom Group during the
year ended 31 December 2011 have been approved by the Directors;
2.
they have performed sample checks on the continuing connected transactions entered into between the
Group and China Telecom Group during the year ended 31 December 2011 and have not found that the
continuing connected transactions were not in accordance with the pricing policies as stated in the relevant
agreements;
3.
they have performed sample checks on the continuing connected transactions entered into between the
Group and China Telecom Group during the year ended 31 December 2011 and have not found that the
continuing connected transactions were not in accordance with the terms of the agreements governing the
transactions; and
4.
they note that the continuing connected transactions have not exceeded the 2011 annual caps as disclosed
in the circular dated 12 November 2010 and 15 November 2011 of the Company and approved by the
independent shareholders of the Company on 30 December 2010 and 30 December 2011.
Employees
As at 31 December 2011, the Group had 127 thousand employees as follows:
Number of
staff
(thousand)
Percentage
Management
9
7.1%
Technical and marketing
54
42.5%
Operations
64
50.4%
Total
127
100%
The Company regards the management of talent as one of its major strategies for the new period and continuously
optimizes the human resources structure and creates a new mechanism so as to give full play to the functions of
talents. The Company adopts a remuneration policy which is linked to staff’s performance. Staff’s remuneration
consists of basic salary, performance pay and benefits. Furthermore, the Company attaches much importance
to staff training. Directed by the needs of the Company’s strategic development and practical requirements, the
Company utilizes resources within and outside the Company and through various types of trainings to improve the
quality and capability of its core staff.
Compliance with Code on Corporate Governance Practices
Please see the “Corporate Governance Report” set out in this annual report for details of our compliance with the
Code on Corporate Governance Practices.
Material Legal Proceedings
As at 31 December 2011, so far as the directors are aware, the Company was not involved in any material litigation
or arbitration and no material litigation claims had been made against, or were pending or threatened against the
Company.