2012 Annual Report - ZTE

ANNUAL REPORT 2012Finally, the Audit Committee reviewed the audit opinion of the PRC and Hong Kong auditors and the auditedfinancial report of the Company for 2012. The Audit Committee was of the view that the report was a truerepresentation of the financial conditions of the Company in 2012 and approved the submission of the report forconsideration by the Board of Directors.(2) Supervision of the audit work of the accountants’ firmsTo ensure the conduct of auditing work in an orderly manner given the complex nature of the Company’s business,the PRC and Hong Kong auditors of the Company had finalised the audit timetable for the year in early January2013 and submitted such timetable to Shenzhen CSRC in early January 2013 in accordance with relevantrequirements on annual report auditing announced by Shenzhen CSRC. In accordance with “Guidelines for Workof the Audit Committee relating to the Annual Report”, the Company arranged the timely report of such audittimetable to the Audit Committee. Following discussion with the accountants’ firms, the Audit Committee wasof the view that the annual audit timetable scheduled by the Company according to actual circumstances wasappropriate, and the Audit Committee concurred with the annual audit plan arranged by the accountants’ firms.During the course of audit, members of the Audit Committee held discussions with principal officers in charge ofthe assignment to inform themselves of the progress of audit and concerns of the accountants. Such concernswere then communicated to relevant departments of the Company in a timely manner. The Audit Committee alsoissued two letters to the accountants’ firms requesting auditors in charge of the assignment to expedite their workin accordance with the original timetable.(3) Summary Report on the 2012 audit work performed by the accountants’ firmsThe PRC and Hong Kong auditors of the Company performed auditing on the Company’s annual report during theperiod from October 2012 to March 2013. During such period, the PRC and Hong Kong auditors of the Companyand the Audit Committee held discussions on the annual audit plan, and issues identified in the audit processwere also brought to the attention of the Audit Committee in a timely manner. The preliminary audit opinion wassubmitted to the Audit Committee for consideration. The PRC and Hong Kong auditors of the Company completedthe full audit process and acquired sufficient and appropriate audit evidence after nearly 6 months of auditingwork. The audit reports by PRC and Hong Kong auditors with unqualified opinion were then submitted to theAudit Committee.During the course of the annual audit, the Audit Committee held discussions and exchanged views with the PRCand Hong Kong auditors of the Company, and also examined the annual audit report furnished by the PRC andHong Kong auditors. The Audit Committee was of the view that the PRC and Hong Kong auditors of the Companywere capable of performing their tasks in strict accordance with audit regulations, focusing on knowledge of theCompany and the environment in which it operated, understanding the building, improvement and implementation ofthe Company’s internal control, demonstrating acute risk awareness and completing the audit work in accordancewith the audit timetable. The auditors maintained their independence and prudence in the course of audit andcompleted the audit of the Company’s 2012 financial report and internal control audit in a satisfactory manner.(4) Recommendations on the appointment of PRC and Hong Kong auditorsBased on cooperation with Ernst & Young Hua Ming LLP and Ernst & Young over the years, the Audit Committeewas of the view that the PRC and Hong Kong auditors of the Company are major accountants’ firms with highcalibreprofessional teams, full qualifications for the practice, rich practical experience and stringent internalmanagement. As such, the Audit Committee recommends the Board of Directors to re-appoint Ernst & Young HuaMing LLP as PRC auditors and Ernst & Young as Hong Kong auditors of the Company for the financial reportsof 2013, and to re-appoint Ernst & Young Hua Ming LLP as the internal control auditor of the Company for 2013.125