Building an internal control system is not only the inherent demand for consolidating the Company’s strength and international competitiveness, but also the investors’ basic requirements on corporate governance.
In 2006, the Company established an effective internal control system in accordance with the requirements of US Sarbanes-Oxley (SOX) Act, Guidance on Internal Control of Listed Companies bySSE and Listing RulesbyHKEX.Starting from 2011, the Company officially implemented Corporate Internal Control Guidelines jointly issued by the Ministry of Finance and the other four ministries.
In accordance with the above provisions and the reality, the Company has successively formulated Internal Control System Design and Application in 2007, Quantitative Assessment Standards for Internal Control in 2010,Basic Internal Control Standards in 2011, Internal Control System Operation Management Measures (Trial) in 2013 and other related provisions on internal control, which has led to the continuous improvement of corporate internal control system and its operating procedures.
The Board of Directors of the Company takes responsibilities for the establishment, improvement and effective implementation of the internal control system. The Audit Committee of the Board are held responsible for reviewing and supervising the effective operation, continuous improvement and self-evaluation of the internal control system of the Company, and coordinating the external audit institutions to audit the Company regarding the implementation of the internal control and other related matters. The Supervisory Committee supervises the Board of Directors in terms of establishing and implementing the internal control system. And the management team takes charge of the daily operation of the internal control system.
The Company has set up specialized departments that are responsible for the daily operation, supervision and management of internal control. The major participants include Audit & Risk Management Department, Financial Management Department, Human Resources Department, Investment and Development Planning Department as well as the Secretariat Office to the Board.
Starting from 2007, the Board of Directors conduct regular annual evaluations on the operation of the internal control system, and appoint domestic and oversea auditors to evaluate whether the internal control system of the Company comply with the requirements of US Sarbanes-Oxley (SOX) Act, and Corporate Internal Control Guidelines jointly issued by the Ministry of Finance and the other four ministries.Since 2007, both domestic and overseas auditors have unanimously agreed that the Company has maintained effective internal control over financial reports in all material aspects.