59
China Communications Services Corporation Limited Annual Report 2015
REPORT OF THE DIRECTORS
4. The Group is under certain risks in relation to international business and operation
The Group is dedicated in expanding into overseas market and strategically expanding overseas operations. The expansion
into markets outside China will subject us to considerable risks, including differences in business environment, high entry
barrier imposed on foreign enterprises, existing market players, exchange rate fluctuations, legal and regulatory
requirements, potentially unfavorable tax liabilities, inexperience in new markets, competition in the local markets and
protectionism.
Part of our business is conducted overseas, mainly located in developing countries and regions, where the local political and
economic conditions are often unstable and such factors are beyond our control. As we have engaged in operations
overseas, we are subject to various risks related to the countries and regions where we operate.
5. The tax liabilities of the Group may increase due to the taxation policy changes of the
Chinese government
Certain subsidiaries of the Group are entitled to preferential tax rates of High and New Technology enterprise and the
preferential policy of tax deduction before income tax for research and development expenses. However, whether the
Group can enjoy ongoing preferential tax treatment is uncertain. Where the Group ceases to enjoy the existing preferential
tax treatment in the future, the Group’s effective enterprise income tax rate may be increased.
Moreover, the Chinese government is revising the taxation policies, such as (amongst others) value added tax and business
tax, and is replacing the business tax by value added tax. The Group is not yet able to accurately predict the effect of the
above-mentioned taxation policy revisions on the financial status and operating results of the Group, and the changes in
related taxation policies may affect the business, financial status, operating results and prospect of the Group.
AUDITORS
Deloitte Touche Tohmatsu and Deloitte Touche Tohmatsu Certified Public Accountants LLP were engaged as the international
and domestic auditors of the Company respectively for the year ended 31 December 2015. Deloitte Touche Tohmatsu and
Deloitte Touche Tohmatsu Certified Public Accountants LLP have audited the accompanying financial statements, which were
prepared in accordance with International Financial Reporting Standards. A resolution for the reappointment of Deloitte Touche
Tohmatsu and Deloitte Touche Tohmatsu Certified Public Accountants LLP as the international and domestic auditors of the
Company for the year ending 31 December 2016 will be proposed at the upcoming 2015 annual general meeting of the
Company.
By order of the Board
Sun Kangmin
Chairman
Beijing, PRC
31 March 2016
