57
China Communications Services Corporation Limited Annual Report 2015
REPORT OF THE DIRECTORS
The Group will be given priority by China Telecom Group in the provision of comprehensive logistics services, provided that the
terms and conditions offered by independent third parties to China Telecom Group are no more favorable than those offered by
the Company for the same services, and in return, the Company has undertaken to China Telecom that the Company and its
subsidiaries shall not provide supplies procurement related comprehensive logistic services to it on terms which are less favorable
than those offered by the Company and its subsidiaries to independent third parties.
The independent non-executive directors of the Company have confirmed that all the continuing connected transactions for the
year ended 31 December 2015 to which the Group was a party:
1.
had been entered into by the Group in the ordinary and usual course of business;
2.
had been entered into on normal commercial terms or better; and
3.
had been entered into according to the agreements governing them on terms that are fair and reasonable and in the
interests of the shareholders of the Company as a whole.
The independent non-executive directors have further confirmed that:
The values of the continuing connected transactions entered into between the Group and its connected persons which are
subject to annual caps have not exceeded their respective annual caps or revised annual caps.
The auditors of the Company have performed procedures in accordance with Hong Kong Standard on Assurance Engagements
3000 “Assurance Engagements Other Than Audits or Reviews of Historical Financial Information” and with reference to Practice
Note 740 “Auditor’s Letter on Continuing Connected Transactions under the Hong Kong Listing Rules” issued by the Hong Kong
Institute of Certified Public Accountants on the continuing connected transactions and issued a letter to the Board to advise that:
1.
none of the continuing connected transactions entered into between the Group and China Telecom Group during the year
ended 31 December 2015 have not been approved by the Board;
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 2015 and have not found that the continuing connected transactions
were not in accordance with the pricing policies as stated in the relevant agreements in all material respects;
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 2015 and have not found that the continuing connected transactions
were not in accordance with the terms of the agreements governing the transactions in all material respects; and
4.
they have not noted that the continuing connected transactions exceeded the annual caps for 2015 as disclosed in the
circular dated 22 October 2015 of the Company and approved by the independent shareholders of the Company on 11
December 2015.
