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China Communications Services Corporation Limited Annual Report 2015
CORPORATE GOVERNANCE REPORT
RISK MANAGEMENT AND INTERNAL CONTROL
Risk Management and Internal Control System
The Board of the Company is fully responsible for maintaining healthy, comprehensive and effective internal control to safeguard
the investment of the shareholders and the assets of the Group. The Company has set up the internal control system and risk
management mechanism in compliance with the COSO standards, covering the defined management structure and its authority.
This aims at ensuring the efficient and effective utilization of the resources of the Company to assist the Company to achieve
business target and to safeguard assets, with a view to preventing unauthorized utilization or treatment of the resources of the
Company, to secure appropriate accounting records and provide reliable financial data for internal use or external dissemination,
so as to ensure that the operating activities are in compliance with relevant laws and rules. The above control system is designed
to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not
absolute assurance against material misstatement or loss.
Since listing in 2006 , the Company has formulated systems such as internal control guidelines and internal control assessment
methods on the basis of COSO internal control framework. Over the years, the Company has strived to perform ongoing revision
and improvement to the systems related to internal control in light of the changes in internal and external operating environment
and business development requirements. After nearly a decade of refinement and drawing conclusion from the past experience
after the listing, the Company put in place a set of practicable risk management methods, which solidified risk management
procedures, enhanced risk management efficiency and basically established a comprehensive risk management mechanism. In
2015, the Company took into account the requirements of Rule C.2 of the Corporate Governance Code of the Hong Kong Stock
Exchange to continue to strengthen the identification, rationalization and assessment and control of risk, without any material
risk issue throughout the year. After strict rationalization and assessment and analysis of risks, the Company conducted initial
assessment on the potential risks that the Company may be exposed to in 2016, such as (amongst others) strategic risks and
market risks, and proposed practicable corresponding solutions.
The risk management department of the Company has established the internal audit division, which focuses on the emergencies
arising from the operating and administrative activities and operating procedures to strengthen audit supervision, and attaches
importance to the utilization and transformation of the results of audit, so as to foster management improvement and to prevent
loophole. It plays an important role in supporting the Board, the management and the risk management and internal control
assessment. The internal audit division is responsible for providing objective guarantee to the Audit Committee and the Board to
ensure that the management will maintain effective risk management and internal control system.
Annual Risk Management and Internal Control Assessment
The Company continues to focus on strengthening internal control and risk management and has sound internal control
foundations in place. The Company’s main control measures in 2015 are summarized as below:
In 2015, the internal audit division of the Company took the lead to organize a self assessment exercise for internal control
within the whole Company. The self assessment exercise for internal control strives to, on the basis of comprehensive assessment,
focus on the assessment of key control aspects and control points identified after the risk identification assessment. In 2015, we
selected the process of fund management, contract management, subcontracting management and inventory management to
undergo key assessment, and such self assessment covered all the subsidiaries of the Company.
