2012 Annual Report - ZTE

ANNUAL REPORT 2012VIII. Accountability and AuditThe Directors of the Company confirm that they are responsible for providing balanced, objective assessmentswhich are clear and easy to understand in the consolidated financial statements of the annual reports, interimreports and quarterly reports, other price-sensitive announcements and other financial disclosures required underthe Hong Kong Listing Rules, and disclosing information to regulatory authorities in accordance with statutoryrequirements.If the Directors become aware of significant uncertainties or conditions that might have an adverse material impacton the ability of the Company to operate as a going concern, the Directors must provide a clear disclosure anddetailed discussion of such uncertainties in the corporate governance report.A statement of the Company’s Hong Kong auditor on its reporting responsibility and views on the financialstatements of the Company for the year ended 31 December 2012 is set out in the report of the Independentauditors in page 312 to 313 of this report.IX.Internal ControlThe Board of Directors of the Company is responsible for reviewing the Company’s internal control systems toensure its effective implementation. The Board of Directors has delegated to the Audit Committee the responsibilityfor reviewing the effectiveness of the internal control systems of the Company and its subsidiaries. The Directorsare responsible for reviewing resources on the financial reporting functions qualification and experience of thestaff and whether the courses and budget for staff training are sufficient.The Company continued to improve its internal control system in 2012. In accordance with 18 application guidelinesin the “Supplementary Guidelines for Corporate Internal Control”, the internal control development project teamstreamlined the business processes again on the basis of internal control work completed in 2011, prepared arisk checklist, conducted walk-through tests on key controls and updated the risk control matrix during the year. Italso set up specialised groups to conduct research and investigation on key management issues of the Companyand made recommendations on management optimisation in respect of risks existing in our operation. All in all,the Company has established and effectively implemented an internal control regime that meets its operationalneeds and covers all segments of the Company’s operation. The Company will continue to adjust and improvethe development of its internal control regime in a timely manner in response to changes in internal and externalconditions.The Audit Committee under the Board of Directors convenes regular meetings each year in accordance withrelevant laws and regulations to review the effectiveness of and identify rooms for further improvements in financial,operational and supervisory controls and the risk management procedures. Reports are being submitted to theBoard of Directors of the Company on the implementation of internal control measures.The internal control system of the Company was designed to provide reasonable (but not absolute) assuranceagainst material misstatements or losses and to manage (but not eliminate) risks arising from the malfunctioningof operating systems or failures to attain the Company’s objectives. The Board of Directors is of the view thatthe internal control system was in normal operation as at 31 December 2012.During the year, the Company performed self-inspection on its corporate governance and self-assessment on itsinternal control. A self-assessment report on internal control has been prepared as a result. For details of theCompany’s internal control in 2012, please refer to the section of this report headed “Internal Control”.143