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Corporate Governance Report
/ Annual Report 2011 /
1
The Group is committed to strengthening its internal control and risk management and has established a sound
internal control foundation. The Group further improved internal control system and implemented comprehensive
risk management pursuant to the relevant requirements of the Stock Exchange, promoted the application of risk
management process in operating activities and daily management, and gradually improved the overall level of the
internal control and risk management. The Group focused on formulating and improving relevant systems in relation
to internal control and risk management, which formulated and published the “Implementation Measures for the
Three Major One Significant Decision Making System of China Communications Services Corporation Limited”. It
was provided in the Measures the objectives of and the fundamental principles for the decision making by the “Three
Major One Significant Decision Making System”. The primary scope of the “Three Major One Significant Decision
Making System”, which refers to major decision making, major appointment and removal of personnel, major project
arrangement and significant funding operation, specifies the decision making limits of those four matters, designates
the decision making procedures of those four matters, clarifies the process of “decision making based on evidence
discussion” with reference to those four matters, and designates the legal representatives and general managers at
all level to be held responsible for the execution of these Measures. Upon the introduction of these Measures, the
organization structure and operation mechanisms of the Group’s internal control and risk management was further
improved. In order to strengthen the leadership of risk control work, the Group reorganized the composition of the
risk management committee and its office at the headquarter level in 2011, taking into account the redeployment
of staff at the headquarter. Such actions secured the effective organization of the Group’s internal control and risk
management work.
The Group also formulated and issued the “Working Plan for the Risk Management of China Communications
Services Corporation Limited in 2012–2015” during 2011, so as to lay a foundation for guiding the better
implementation of internal control works at different levels in the coming years. It was provided in the plan the
missions about the guidance thoughts, operation principles and objectives of our internal control works, and
determined the key missions for the internal control and risk management work. The working plan further defined
the direction for the work of the internal control and risk management departments at all levels in the next few years.
The Group continued to facilitate the construction of informatization for internal control purposes. An informatized
platform is now applied and the website regarding risk management information was online. Such website is set
up under the OA system of the headquarter, which allowed the internal control department to conduct information
exchange online. The Group strived to integrate its internal control and risk management with the information system
to realize an effective solidification of the process of internal control and risk management and a better integration
of the Company’s risk management and operation management, thus strengthening the internal control and risk
management, reducing operation risks and enhancing the level of the Group’s internal control and risk management.
The Board considers that by implementing the above measures, the Company was in compliance with the internal
control requirements under C.2 of the Code Provisions and that the internal control and risk management system of
the Company was effective. The Board intends to continue to further improve and enhance its internal control and
risk management in 2012.