The Company believes that sound internal control plays an important role in the operation of the Company. The Board is committed to establishing effective internal control system to ensure that the internal control system of the Company is sound, complete and effective. The Audit Committee under the Board is responsible for reviewing the internal control system of the Company, monitoring the implementation of the internal control, and considering the annual internal control assessment reports and annual compliance assessment reports. The Risk Management and Investment Decision-making Committee under the Board is responsible for considering the basic system of risk management of the Company and the annual risk assessment reports, and monitoring the effectiveness of the operation of the risk management system. The Risk Management Committee under the President Office is responsible for guiding, coordinating and supervising the overall risk management work of the Company, considering and assessing material issues of the Company involving operational risks, and submitting its resolutions to material risks to the Board. The functional departments of the Company bear the primary responsibilities for the internal control system. The Compliance Department is responsible for the coordination and planning work of internal control, compliance and risk management before and during implementation, while the Monitoring Department/ Auditing Department is responsible for inspection of internal control, compliance and risk management after implementation and for imposing penalties against any breach of the requirements thereof.
In 2012, the Company focused on improving its internal control and compliance management by further capitalising on the methodology applicable for internal control projects. Firstly, the Company continued promoting the update and maintenance of the achievements of the internal control projects, and kept the internal control procedures consistent with the Company’s operation and management; secondly, the Company put emphasis upon the correction of significant defects in internal control, and controlled key risks effectively by system design and systematic control; and thirdly, the Company accelerated the establishment of the comprehensive risk management system, launched the internal control, compliance and risk management information system development project, and integrated the internal control and compliance standards to the operating process to standardise the risk control through information technology.
With a view to reviewing and continuously enhancing the effectiveness of the Company’s internal control system, the Board and the Audit Committee considered and discussed the Internal Control Assessment Report and the Compliance Assessment Report of the Company for 2012, and the Board and the Risk Management and Investment Decision-making Committee considered and discussed the Risk Assessment Report of the Company for 2012. SUPERVISORY COMMITTEE
Overview
During the Year, the Supervisory Committee discharged its supervisory duties according to the laws, strengthened the supervision over meetings, focused on strengthening risk control, and gave opinions and suggestions to the management about the strengthening of operation and management as well as risk control.
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ORPORATEG
OVERNANCER
EPORTSUPERVISORY COMMITTEE (continued) Composition
The Company’s Supervisory Committee in the Year comprised: Chairman: Zhou Liqun
Supervisors: Sheng Hetai (Supervisor), Lu Zhengfei (Independent Supervisor), Qu Yonghuan (Employee Representative Supervisor), Shen Ruiguo (Employee Representative Supervisor)
Duties and Responsibilities
In accordance with the Company Law and the Articles of Association, the Supervisory Committee is accountable to the shareholders’ general meeting and performs duties of supervision over the financial affairs, directors and other senior management of the Company. Detailed duties and responsibilities are: examining the financial affairs of the Company, verifying the financial information proposed to be submitted by the Board to the shareholders’ general meetings which includes financial reports, business reports and profit distribution plans, supervising the directors and other senior management in their performance of duties for the Company, proposing the removal of such directors or other senior management who have breached the laws, regulations, the Articles of Association or resolutions of the shareholders’ general meetings, requiring the directors and other senior management to rectify their actions in the event that such actions infringed the interests of the Company, bringing lawsuits against directors or other senior management in accordance with the provisions of the Company Law, and convening and presiding over shareholders’ general meetings when the Board fails to perform its duties to convene and preside over any shareholders’ general meeting.
Summary of Work Undertaken
During the Year, the Supervisory Committee carried out its work, performed its supervisory duties and protected the interests of the shareholders, the Company and its employees in accordance with the relevant provisions of the Company Law and the Articles of Association. During the Year, the Supervisory Committee held two meetings, at which six proposals were considered and approved. The attendance of each supervisor is recorded as follows:
Name Zhou Liqun Sheng Hetai Lu Zhengfei Qu Yonghuan Shen Ruiguo
Number of meetings 2/2 1/2 1/2 2/2 2/2
attended/Number of meetings that require attendance
Attendance rate 100% 50% 50% 100% 100%
Note: During the Year, Mr Sheng Hetai and Mr Lu Zhengfei attended one meeting in person and entrusted Mr Zhou Liqun to attend the other
meeting on their behalf.
Details of the tasks accomplished by the Supervisory Committee in the Year are set out in the “Report of the Supervisory Committee” section of this annual report.