Annual Report 2012

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7 CORPORATE GOVERNANCE REPORTSpecial statement and independent opinion given by the independent directors regarding the external guaranteesprovided by the BankPursuant to the relevant provisions and requirements under the circular of Zheng Jian Fa [2003] No. 56 issued by the CSRC, the independentdirectors of the Bank, including Mr. Yam Chi Kwong, Joseph, Rt Hon Dame Jenny Shipley, Ms. Elaine La Roche, Mr. Zhao Xijun and Mr.Wong Kai-Man made the following statements on external guarantees provided by the Bank based on the principles of fairness, justice, andobjectiveness:The external guarantee business provided by the Bank has been approved by the PBC and the CBRC, and is part of the ordinary business of theBank. With regard to the risks arising from guarantee business, the Bank formulated specific management measures, operational processes andapproval procedures, and carried out the business accordingly. The guarantee business of the Bank is mainly in the form of letter of guarantees.As at 31 December 2012, the balance of letter of guarantees issued by the Group was approximately RMB606,661 million.Delegation of powers by the BoardThe division of power between the Board and senior management is implemented in strict compliance with the Articles of Association of theBank and other corporate governance documents. By virtue of the authorisation conferred by the Articles of Association and the Board, thepresident makes decisions within his scope of authority on operations, management and other issues to be decided, including:• presiding over the operation and management of the Bank and initiating the implementation of board resolutions;• submitting operational plans and investment proposals of the Bank to the Board and implementing the proposals upon approval of theBoard;• formulating proposals for the establishment of internal management departments;• formulating the basic management system of the Bank;• formulating specific rules and regulations of the Bank;• proposing to the Board the appointment or dismissal of executive vice presidents and other senior management officers (excluding thechief audit officer and the secretary to the Board);• exercising other powers conferred by the Articles of Association of the Bank and the Board.Accountability of the directors in relation to the financial reportThe directors are responsible for overseeing the preparation of the financial report for each financial period to give a true and fair view of theGroup’s financial position, operating results and cash flow for that period. In preparing the financial report for the year ended 31 December 2012,the directors have selected appropriate accounting policies, applied them consistently, and made judgements and estimates that are prudent andreasonable.During the reporting period, in accordance with the provisions of relevant laws, regulations and listing rules of the listing venues, the Bank hasreleased 2011 annual report, the report for the first quarter of 2012, half-year report 2012, and the report for the third quarter of 2012 on time.Independent operating capability of the BankThe Bank is independent from its controlling shareholder Huijin with respect to business, personnel, assets, organisations and finance. The Bankhas independent and complete operating assets, independent operating capability and the ability to survive in the market on its own strength.Internal transactionsThe internal transactions of the Bank cover credit and guarantees, asset transfer, receivables and payables, service charges, and agencytransactions between the Bank and subsidiaries as well as between the subsidiaries. The internal transactions of the Bank were in line withregulatory requirements, and did not bring about the negative impact upon the Group’s sound operation.Please refer to Note in the “Financial Statements” of this annual report for details of the internal transactions as defined by domestic laws andregulations.China Construction Bank Corporation annual report 201259
7 CORPORATE GOVERNANCE REPORTImpact of restructuring, reorganisation and others on peer competition and related party transactionDuring its restructuring, the former China Construction Bank was split into the Bank and Jianyin. Jianyin is positioned as a company forinvestment and disposal of financial assets, which has no conflict with the positioning of the Bank and would not lead to the problem of peercompetition.In July 2009, Jianyin transferred all of its shares of the Bank to Huijin. According to provisions of the Rules Governing the Listing of Stocks onShanghai Stock Exchange, transactions between Jianyin and the Bank would not be regarded as related party transactions.The Bank had no issues of peer competition or related party transactions caused by character of the industry, state policies, or mergers andacquisitions.Internal controlThe Board is responsible for establishing and maintaining an adequate internal control system for financial reports. The internal control of financialreports aims to assure the truthfulness, completeness and reliability of financial reports, and to prevent significant misreporting risk. The Boardhas assessed the internal control relating to financial reports pursuant to the Basic Standard for Enterprises Internal Control, and deemed that itwas effective on 31 December 2012.The Bank actively conducted on-site testing and off-site assessment of internal control, and the internal control assessment covered allmanagement levels and departments, domestic institutions, overseas entities, subsidiaries and its products and business lines. In the processof the internal control assessment, the Bank has not found material and significant internal control deficiencies. And the matters that need to beimproved did not constitute material impact on the Bank’s operations and management. The Bank has paid keen attention to such matters andwill take further action for continuing improvement.The Bank thoroughly implemented the Basic Standard for Enterprises Internal Control and the guidelines ancillary thereto issued by fiveministries/commissions including the MOF. It established the Internal Control and Compliance Department, and clarified the responsibledepartments that assumed the duty of internal control management at branch and sub-branch level, and preliminarily built up the organisationalsystem for internal control and compliance management.The Bank formulated the basic rules for internal control, clarified the objectives, principles and management requirements of internal control byfocusing on the five elements including internal environment, risk assessment, control activities, information and communication, and internalmonitoring, which serves as the fundamental system for implementing internal control of the Bank.The Bank formulated rules for internal control assessment, clarified contents, procedures and measures for internal control assessment. Itpromoted all staff management, comprehensive and whole process management of internal control by assessing the control status of key controlpoints in its main business processes. The Bank formulated internal control regulations implementation guidelines for its subsidiaries to guidethem to improve their internal control management.The Bank proposed a three-year development plan on the internal control system, and clarified the objectives, contents, responsibilities andschedules for the development of the internal control system in the next three years, to ensure the continuous improvement of the internal controlsystem.In August 2011, the Board approved the Measures on Accountability of Major Mistakes in Information Disclosure of Annual Report, andestablished the rules for the accountability of major mistakes. During the reporting period, the Bank did not have any major mistakes ininformation disclosure of annual report.60 China Construction Bank Corporation annual report 2012
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Annual Report 2012China Constructio
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DEFINITIONSIn this annual report, u
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INTRODUCTIONHeadquartered in Beijin
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2 CORPORATE INFORMATIONLegal name a
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Page 11 and 12: 3 CHAIRMAN’S STATEMENTDear shareh
Page 13 and 14: 4 PRESIDENT’S REPORTDear sharehol
Page 15 and 16: 5 MANAGEMENT DISCUSSION AND ANALYSI
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Page 73 and 74: 8 PROFILES OF DIRECTORS, SUPERVISOR
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Page 89 and 90: 11 MAJOR ISSUESMaterial litigations
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14 UNAUDITED SUPPLEMENTARY FINANCIA
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15 ORGANISATIONAL STRUCTUREPublic R
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16 BRANCHES AND SUBSIDIARIESTier-on
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16 BRANCHES AND SUBSIDIARIESBranche
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16 BRANCHES AND SUBSIDIARIESChongqi
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16 BRANCHES AND SUBSIDIARIESZhejian
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Annual Report 2012

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