The Company strives to maintain high level of corporate governance and has adhered to excellent, prudent and efficient corporate governance principles and continuously improves its corporate governance methodology, regulates its operations, improves its internal control mechanism, implements sound corporate governance and disclosure measures, and ensures that the Company's operations are in line with the long-term interests of the Company and its shareholders as a whole. In 2022, the shareholders' meeting, the Board and the Supervisory Committee operated soundly and efficiently. The Company was dedicated to lean management while ensuring stable and healthy operation, and elevated its high-quality development to a new level, while continuously optimising its internal control system and comprehensive risk management in order to effectively ensure steady operation of the Company. The standard of the Company's corporate governance continued to improve and effectively protected the best long-term interests of shareholders.
The Company persists in refining the basic system of its corporate governance and continues to optimise the corporate governance system and operating mechanism to ensure standardised operation in strict compliance with the Company Law, the Securities Law and the requirements of the CSRC, the SSE and the Stock Exchange on corporate governance. In 2022, in accordance with the latest regulatory requirements from the CSRC and the SSE on corporate governance and standardised operation, and taking into account the actual situation of the Company, the Company revised the relevant provisions of 12 sets of rules such as the Rules of Procedures of Audit Committee of China Telecom Corporation Limited, the Administrative Measures for Shareholding and Change in Shareholding by Directors, Supervisors and Senior Management of China Telecom Corporation Limited, the Rules for the Management of Information Disclosure of China Telecom Corporation Limited, the Administrative Measures for Investor Relations of China Telecom Corporation Limited, the Management System for Registration of Insiders of China Telecom Corporation Limited and the Administrative Measures for Proceeds of China Telecom Corporation Limited, and formulated the Management System of Board Authorisation of China Telecom Corporation Limited to continuously improve the level of corporate governance. At the same time, the Company attaches great importance to the construction and improvement of risk management and internal control systems, which mainly include clear organisational structure and management responsibilities, effective authorisation approval and accountability system, clear objectives, policies and procedures, comprehensive risk assessment and management, sound financial accounting system, continuous operation performance analysis and supervision, etc., which play an important role in ensuring the overall operation of the Company.
A two-tier structure is adopted as the overall structure for corporate governance: the Board and the Supervisory Committee are established under the shareholders' meeting, while the Audit Committee, Remuneration Committee and Nomination Committee are established under the Board. The Board is authorised by the Articles of Association of the Company to make major operational decisions of the Company and to oversee the daily management and operations of the senior management. The Supervisory Committee is mainly responsible for the supervision of the performance of duties of the Board and the senior management. Each of the Board and the Supervisory Committee is independently accountable to the shareholders' meeting. In 2022, the Company convened a total of 2 general meetings, 11 Board meetings and 6 Supervisory Committee meetings. The convening, holding, voting and disclosure procedures of the relevant meetings were in compliance with the requirements of laws and regulations and the Articles of Association.
For the year ended 31 December 2022, the roles of Chairman and Chief Executive Officer of the Company were performed by the same individual. In the Company's opinion, through the supervision by the Board and the Independent Non-Executive Directors of the Company, with effective control of the Company's internal check and balance mechanism, the same individual performing the roles of Chairman and Chief Executive Officer can enhance the Company's efficiency in decision-making and execution and enable the Company to effectively capture business opportunities. Many leading international corporations around the world also have similar arrangements. Save as stated above, the Company was in compliance with all the code provisions under the Corporate Governance Code as set out in Appendix 14 of the Listing Rules (the "Corporate Governance Code") in the year 2022.
The Company has always attached great importance to information disclosure, strictly complied with the requirements of the relevant regulatory rules of the places where the Company's shares are listed, and stringently implemented the Rules for the Management of Information Disclosure of China Telecom Corporation Limited to standardise the procedures for the Company to collect, organise, summarise and report important information internally and prepare external disclosure documents, clarify the responsibilities and code of conduct of relevant departments and branches, and ensure the truthfulness, accuracy, completeness and timeliness of the Company's information disclosure. In addition, the Company actively discloses data such as the numbers of mobile subscribers, 5G package subscribers and wireline broadband users, etc. on a monthly basis to strengthen communication with the capital market and improve the transparency of information disclosure. Meanwhile, the Company attaches great importance to the handling of inside information and standardised management of inside information through the Registration and Management System for Insiders of China Telecom Corporation Limited, ensure the fairness and justice of information disclosure, and protect the legitimate rights and interests of investors and relevant parties.
The Company established an Investor Relations Department which is responsible for providing shareholders and investors with the necessary information, data and services in a timely manner. It also maintains proactive communications with shareholders, investors and other capital market participants. The Company's senior management presents the annual results and interim results every year. Through various activities such as analyst meetings, press conferences, global investor telephone conferences and investors road shows, the senior management provides the capital market and media with important information and responds to key questions which are of prime concerns to the investors. This has helped reinforce their understanding of the Company's business and the overall development of the industry. In 2022, the Company conducted the annual, interim and third quarter results announcement briefings effectively through online means for the first time and proactively innovated the communication modes including the introduction of innovative elements such as virtual data-based intelligence host "Xiao Yi" in the interim results announcement briefing for the first time to demonstrate the achievements of the Company's digital transformation. In daily operation, the Company participated in a number of investor conferences held by major international investment banks and domestic securities firms worldwide through on-site and online integrated means to promote communication with institutional investors. At the same time, the Company set up a dedicated investor relations enquiry line to facilitate communications between investors and the Company and better serve shareholders and investors.
In 2022, the Company's continuous efforts in corporate governance gained wide recognition from the capital market and the Company was accredited with a number of awards. The Company was voted as the "Most Honoured Company in Asia" in the 2022 "All-Asia-Executive-Team" poll organised by Institutional Investor, a prestigious international financial magazine, for twelve consecutive years. The Company also received "Best Overall ESG", "Best Investor Relations" and other honours. In addition, the Company was awarded "Asia's Best CSR", "Best Corporate Communications", "Best Environmental Responsibility" and "Best Investor Relations Company" in "Asian Excellence Award 2022" organised by Corporate Governance Asia, a renowned Asia's journal on corporate governance. The Company was voted as the "Most Outstanding Company in China – Telecommunication Services Sector" in Asiamoney's "Asia's Outstanding Companies Poll 2022". The Company was further awarded with the "Overall Most Outstanding Company in China" among all winners from different sectors in China, and was accredited with the "Most Outstanding IPO in China". In addition, the Company was awarded "Best Practice of Office of Board of Directors for Public Companies in 2022" as well as "Best Practice Award of 2021 Annual Results Briefing for Public Companies" by China Association for Public Companies.
The Company is independent from its controlling shareholder in terms of business, assets and finance, etc. The controlling shareholder of the Company undertakes not to act beyond their authority to interfere with the operation and management activities of the Company and not to misappropriate the interests of the Company. The controlling shareholder of the Company exercise its rights as a shareholder through the general meeting in accordance with the law, and have not acted beyond the authority of the general meeting of the Company, directly or indirectly interfered with the Company's business decisions and operating activities. The Company has independent and complete business and self-operation capabilities. During the Reporting Period, the Company was not aware of any act of controlling shareholder by taking advantage of its special status to encroach on or damage the interests of the Company and other shareholders.
|Session||Date||Designated websites for publishing resolutions||Resolutions of the Meeting|
|The First Extraordinary General Meeting in 2022||2022-03-22||www.hkexnews.hk
|Annual General Meeting for the year 2021||2022-05-19||www.hkexnews.hk
During the Reporting Period, the Company held 2 general meetings, with all resolutions approved. For details, please refer to the relevant announcements published by the Company on the websites of the Stock Exchange and the Company.
The convening, holding, voting and other relevant procedures of the general meetings of the Company were in compliance with the laws and regulations, the Articles of Association of the Company, the Rules of Procedures of the Shareholders' General Meeting and other relevant requirements to ensure that all shareholders, especially minority shareholders, enjoy equal status and fully exercise their rights.
(1) Changes in shareholding and remuneration of current and resigned Directors, Supervisors and senior management during the Reporting Period
|Name||Position||Gender||Age||Commencement date of term||End date
|Number of shares held
at the beginning
of the year
|Number of shares held
at the end
of the year
in shares during the year
|Total remuneration before tax received from the Company during the Reporting Period
(RMB in ten thousands)
|Ke Ruiwen||Executive Director, Chairman and Chief Executive Officer||Male||59||2012-05-30||Annual General Meeting for the year 2022||0||0||0||/||69.62|
|Li Zhengmao (resigned)||Executive Director, President and Chief Operating Officer||Male||60||2020-05-26||2022-07-12||0||0||0||/||33.73|
|Shao Guanglu||Executive Director||Male||59||2020-05-26||Annual General Meeting for the year 2022||0||0||0||/||65.66|
|President and Chief
|2022-08-16||Annual General Meeting for the year 2022|
|Liu Guiqing||Executive Director and Executive Vice President||Male||56||2019-08-19||Annual General Meeting for the year 2022||0||0||0||/||62.94|
|Tang Ke||Executive Vice President||Male||48||2021-11-29||Annual General Meeting for the year 2022||0||0||0||/||62.56|
|Executive Director||2022-03-22||Annual General Meeting for the year 2022|
|Xia Bing||Executive Vice President||Male||49||2022-04-26||Annual General Meeting for the year 2022||0||0||0||/||49.79|
|Executive Director||2023-01-06||Annual General Meeting for the year 2022|
|Li Yinghui||Executive Vice President,
Chief Financial Officer
|Male||52||2022-04-26||Annual General Meeting for the year 2022||0||0||0||/||48.05|
|Secretary of the Board||2022-09-05||Annual General Meeting for the year 2022|
|Executive Director||2023-01-06||Annual General Meeting for the year 2022|
|Chen Shengguang||Non-Executive Director||Male||59||2017-05-23||Annual General Meeting for the year 2022||1,000||1,000||0||/||0.00|
|Tse Hau Yin, Aloysius (resigned)||Independent Non-Executive Director||Male||75||2005-09-09||2023-01-06||0||0||0||/||49.13|
|Xu Erming (resigned)||Independent Non-Executive Director||Male||73||2005-09-09||2023-01-06||0||0||0||/||25.00|
|Wang Hsuehming||Independent Non-Executive Director||Female||73||2014-05-29||Annual General Meeting for the year 2022||0||0||0||/||26.80|
|Yeung Chi Wai, Jason||Independent Non-Executive Director||Male||68||2018-10-26||Annual General Meeting for the year 2022||0||0||0||/||26.80|
|Ng, Kar Ling Johnny||Independent Non-Executive Director||Male||62||2023-01-06||Annual General Meeting for the year 2022||0||0||0||/||0.00|
|Chen Dongqi||Independent Non-Executive Director||Male||66||2023-01-06||Annual General Meeting for the year 2022||0||0||0||/||0.00|
|Chairman of the Supervisory Committee and Shareholder Representative Supervisor||Male||59||2015-05-27||2022-03-22||0||0||0||/||32.01|
|Han Fang||Chairlady of the Supervisory Committee and Shareholder Representative Supervisor||Female||49||2022-03-22||Annual General Meeting for the year 2022||0||0||0||/||75.75|
|Zhang Jianbin||Employee Representative Supervisor||Male||57||2012-10-16||Annual General Meeting for the year 2022||1||1||0||/||108.31|
|Dai Bin||Employee Representative Supervisor||Male||54||2020-05-26||Annual General Meeting for the year 2022||0||0||0||/||105.23|
|Xu Shiguang||Shareholder Representative Supervisor||Male||43||2018-10-26||Annual General Meeting for the year 2022||0||0||0||/||92.89|
|Shareholder Representative Supervisor||Male||49||2020-05-26||2022-03-22||0||0||0||/||0.00|
|Wang Yibing||Shareholder Representative Supervisor||Female||56||2022-03-22||Annual General Meeting for the year 2022||0||0||0||/||0.00|
- During the Reporting Period, the Company also settled the bonus for the year 2021, including RMB1,080,400 for Mr. Ke Ruiwen, RMB727,300 for Mr. Shao Guanglu, RMB970,000 for Mr. Liu Guiqing, RMB254,200 for Mr. Tang Ke and RMB84,800 for Mr. Xia Bing.
- Mr. Tse Hau Yin, Aloysius resigned from his position as an Independent Non-Executive Director of the Company on 16 August 2022 and his resignation took effect on the date of election of a new Independent Non-Executive Director at the shareholders' meeting on 6 January 2023.
- Mr. Xu Erming resigned from his position as an Independent Non-Executive Director of the Company on 16 August 2022 and his resignation took effect on the date of election of a new Independent Non-Executive Director at the shareholders' meeting on 6 January 2023.
- Mr. Sui Yixun resigned from his position as a Supervisor of the Company on 17 December 2021 and his resignation took effect on the date of election of a new Supervisor at the shareholders' meeting on 22 March 2022.
- Mr. You Minqiang resigned from his position as a Supervisor of the Company on 17 December 2021 and his resignation took effect on the date of election of a new Supervisor at the shareholders' meeting on 22 March 2022.
(2) Positions of current and resigned Directors, Supervisors and senior management during the Reporting Period
1. Positions held in shareholder entities
|Name||Name of shareholders||Positions held in shareholders||Commencement
date of term
|End date of term|
|Ke Ruiwen||China Telecommunications Corporation||Chairman||2019-04-15||Present|
|Li Zhengmao (resigned)||China Telecommunications Corporation||Director
|Shao Guanglu||China Telecommunications Corporation||Director
|Liu Guiqing||China Telecommunications Corporation||Director
|Tang Ke||China Telecommunications Corporation||Vice President||2021-06-23||Present|
|Xia Bing||China Telecommunications Corporation||Vice President||2021-11-09||Present|
|Li Yinghui||China Telecommunications Corporation||Chief Accountant||2022-02-22||Present|
|Chen Shengguang||Guangdong Rising Holdings Group Co., Ltd.||Director and General Manager||2016-11||Present|
|Han Fang||China Telecommunications Corporation||Managing Director of Audit Department
Managing Director of Capital Operation Department
|Zhang Jianbin||China Telecommunications Corporation||Deputy General Counsel
Managing Director of the Legal Department (Compliance Management Department)
|Dai Bin||China Telecommunications Corporation||Director of the Party Community Work Department
Vice Chairman of the Labour Union
|Zhejiang Provincial Financial Development Co., Ltd.||Deputy Director of the Organisation Department (Human Resources Department)||2019-12-13||Present|
|Wang Yibing||Zhejiang Provincial Financial Development Co., Ltd.||Vice General Manager||2021-01-30||Present|
2. Positions held in other entities
|Name||Name of other entities||Positions held in other entities||Commencement
date of term
|End date of term|
|Shao Guanglu||Communications Science and Technology Committee of the Ministry of Industry and Information Technology||Deputy Director||2017-12||Present|
|Liu Guiqing||China Institute of Communications||Deputy Director General||2018-06||Present|
|Global System for Mobile communications Association||Director||2018-09||Present|
|China Tower||Non-Executive Director||2022-01-14||Present|
|China Comservice||Chairman of the board of directors and Executive Director||2022-06-17||Present|
|Tang Ke||Internet Society of China||Deputy Director General||2021-11||Present|
|Zhongguancun Digital Economic Industry Alliance||Deputy Executive Director General||2021-11||Present|
|China Netcasting Services Association||Vice President||2022-01||Present|
|Xia Bing||China Association of Communication Enterprises||Vice President||2022-07||Present|
|Li Yinghui||China Association for Public Companies||Vice President||2022-07||Present|
|Chen Shengguang||Guangdong Rising Holdings Co., Ltd.||Director and General Manager||2016-11||Present|
|China Nonferrous Metals Industry Association||Vice President of the Council||2019-04||Present|
|Guangdong Nonferrous Metals Industry Association||President||2017-07||Present|
|Tse Hau Yin, Aloysius (resigned)||CNOOC Limited||Independent Non-Executive Director||2005-06-08||Present|
|Sinofert Holdings Limited||Independent Non-Executive Director||2007-06-28||Present|
|SJM Holdings Limited||Independent Non-Executive Director||2007-10-15||Present|
|SJM Resorts, Limited||Chairman of the Supervisory Committee||2014-12||Present|
|Grand Lisboa Property Investment Company Limited||Chairman of the Supervisory Committee||2014-12||Present|
|Sociedade de Desenvolvimento Unido de Macau S.A.R.L.||Chairman of the Supervisory Committee||2014-12||Present|
|Pier 16 Property Development Limited.||Chairman of the Supervisory Committee||2014-12||Present|
|Cotai Magnific View Property Development Company Limited||Chairman of the Supervisory Committee||2014-12||Present|
|China Huarong Asset Management Co., Ltd.||Independent Non-Executive Director||2015-03-23||Present|
|CCB International (Holdings) Limited||Independent Non-Executive Director||2013-03-14||2022-12-31|
|Bacchus Fine Wines (Hubei) Company Limited||Chairman||2010-11-16||Present|
|Xu Erming (resigned)||China Enterprise Management Research Association||Vice Chairman||2004-09||Present|
|Yeung Chi Wai, Jason||Fung Holdings (1937) Limited and its listed companies in Hong Kong||Group Chief Compliance and Risk Management Officer||2015-07-01||Present|
|Bank of Communications Co., Ltd.||Independent Non-Executive Director||2016-10-17||2022-06-28|
|Enchated Hills Limited||Director||1997-05-14||Present|
|Ng, Kar Ling Johnny||China Petroleum & Chemical Corporation||Independent Non-Executive Director||2018-05-15||Present|
|China Vanke Co., Ltd.||Independent Non-Executive Director||2017-06-30||Present|
|Metallurgical Corporation of China Ltd.||Independent Non-Executive Director||2020-04-29||Present|
|Fangdd Network Group Ltd.||Independent Director||2018-11-01||2022-07-18|
|Chen Dongqi||Chinese Academy of Social Sciences||Professor and Ph.D. tutor||1994-12||Present|
|Sun Yefang Foundation||Executive council member||2021-12||Present|
|Sui Yixun (resigned)||China Tower||Supervisor||2018-05-03||2022-01-14|
|Han Fang||China Tower||Supervisor||2022-01-14||Present|
|China Telecom Group Investment Co., Ltd.||Chairlady of the board||2022-12-29||Present|
|Wang Yibing||Zhejiang Provincial Financial Holdings Co., Ltd||Supervisor||2012-08-27||Present|
|Zhejiang Financial Holding Enterprises Alliance||Vice President of Council||2022-03-07||Present|
|Explanation on positions held in other entities||Tse Hau Yin, Aloysius tendered resignation as an independent non-executive director of China Huarong Asset Management Co., Ltd. on 23 March 2021. Such resignation shall take effect after the commencement of term of office of a new independent non-executive director.|
(3) Remuneration of Directors, Supervisors and senior management
for remuneration of Directors,
Supervisors and senior management
|Decision-making procedures for remuneration of Directors and senior management: The Remuneration Committee makes recommendations to the Board in respect of the overall remuneration policy and structure for the Company's Directors and senior management and the establishment of a formal and transparent procedure for developing remuneration policy; The Board of Directors determines the remuneration plan for senior management and the remuneration plan for Directors is approved at shareholders' general meetings.
Decision-making procedures for remuneration of Supervisors: Supervisors of the Company do not receive remuneration as Supervisors.
|Basis for determining the remuneration of Directors, Supervisors and senior management||In accordance with the administrative requirements of the SASAC, the remuneration is determined based on the Remuneration Plan for Senior Management of the Company and factors such as the duties, responsibilities, experience of the Directors, Supervisors and senior management and the prevailing market conditions.|
|Actual payment of remuneration of Directors, Supervisors and senior management||For details, please refer to "(1) Changes in shareholding and remuneration of current and resigned Directors, Supervisors and senior management during the Reporting Period" in this section.|
|Total remuneration actually received by all Directors, Supervisors and senior management as at the end of the Reporting Period||For details, please refer to "(1) Changes in shareholding and remuneration of current and resigned Directors, Supervisors and senior management during the Reporting Period" in this section.|
(4) Changes in Directors, Supervisors and Senior Management of the Company
|Name||Position held||Type of changes||Reason for change|
|Tang Ke||Executive Director||Elected||Work needs|
|Sui Yixun||Supervisor||Resigned||Reason of age|
|Han Fang||Supervisor||Elected||Work needs|
|You Minqiang||Supervisor||Resigned||Work adjustment|
|Wang Yibing||Supervisor||Elected||Work needs|
|Han Fang||Chairlady of the Supervisory Committee||Elected||Work needs|
|Xia Bing||Executive Vice President||Appointed||Work needs|
|Li Yinghui||Executive Vice President and Chief Financial Officer||Appointed||Work needs|
|Li Zhengmao||Executive Director, President and Chief Operating Officer||Retired||Reason of age|
|Shao Guanglu||President and Chief Operating Officer||Appointed||Work needs|
|Li Yinghui||Secretary of the Board||Appointed||Work needs|
|Xia Bing||Executive Director||Elected||Work needs|
|Li Yinghui||Executive Director||Elected||Work needs|
|Tse Hau Yin, Aloysius||Independent Non-Executive Director||Resigned||Served as an Independent
Non-Executive Director for more than 6 years
|Xu Erming||Independent Non-Executive Director||Resigned||Served as an Independent
Non-Executive Director for more than 6 years
|Ng, Kar Ling Johnny||Independent Non-Executive Director||Elected||Work needs|
|Chen Dongqi||Independent Non-Executive Director||Elected||Work needs|
- Mr. Tang Ke was elected as an Executive Director of the Company at the first Extraordinary General Meeting in 2022 held on 22 March 2022.
- Madam Han Fang and Madam Wang Yibing were elected as Shareholder Representative Supervisors of the Company at the first Extraordinary General Meeting in 2022 held on 22 March 2022. Mr. Sui Yixun and Mr. You Minqiang no longer served as Supervisors of the Company with effect from 22 March 2022.
- Madam Han Fang was elected as the Chairlady of the Supervisory Committee of the Company at the 12th meeting of the seventh session of the Supervisory Committee held on 29 March 2022.
- Mr. Xia Bing was appointed as an Executive Vice President of the Company and Mr. Li Yinghui was appointed as an Executive Vice President and the Chief Financial Officer of the Company at the 18th meeting of the seventh session of the Board held on 26 April 2022.
- Due to his age, Mr. Li Zhengmao has retired from his positions as an Executive Director, the President and Chief Operating Officer of the Company with effect from 12 July 2022.
- Mr. Shao Guanglu was appointed as the President and Chief Operating Officer of the Company at the 19th meeting of the seventh session of the Board held on 16 August 2022.
- Mr. Li Yinghui was appointed as the Secretary of the Board of the Company at the 20th meeting of the seventh session of the Board held on 5 September 2022.
- Mr. Xia Bing and Mr. Li Yinghui were elected as Executive Directors of the Company at the second Extraordinary General Meeting in 2022 held on 6 January 2023.
- Mr. Ng, Kar Ling Johnny and Mr. Chen Dongqi were elected as Independent Non-Executive Directors of the Company at the second Extraordinary General Meeting in 2022 held on 6 January 2023. Mr. Tse Hau Yin, Aloysius and Mr. Xu Erming no longer served as Independent Non-Executive Directors of the Company with effect from 6 January 2023.
(5) Composition of Board of Directors and Board Diversity Policy
As at 31 December 2022, the Board consisted of 9 Directors with 4 Executive Directors, 1 Non-Executive Director and 4 Independent Non-Executive Directors. There is no relationship (including financial, business, family or other material or relevant relationship) among the Board members. The Audit Committee, Remuneration Committee and Nomination Committee under the Board consist solely of Independent Non-Executive Directors, which ensures that the Committees are able to provide sufficient checks and balances and make independent judgements to protect the interests of the shareholders and the Company as a whole. The number of Independent Non-Executive Directors exceeds one-third of the members of the Board. Mr. Tse Hau Yin, Aloysius who served as the Chairman of the Audit Committee during the Reporting Period, is an internationally renowned financial expert with extensive expertise in accounting and financial management. The Board currently comprises 11 Directors, including 6 Executive Directors, 1 Non-Executive Director and 4 Independent Non-Executive Directors. The term of office for the seventh session of the Board (including the Non-Executive Directors) lasts for 3 years, starting from 26 May 2020 until the day of the Company's Annual General Meeting for the year 2022 to be held in 2023, upon which the eighth session of the Board will be elected.
In August 2013, the Company implemented the Board Diversity Policy. The Company strongly believes that board diversity will contribute significantly to the enhancement of the overall performance of the Company. The Company views board diversity as the key element for accomplishing its strategic goals and sustainable development. In determining the composition of the Board, the Company takes into account diversity of the Board from a number of perspectives, including but not limited to gender, age, educational background, professional experience, skills, knowledge, duration of service and time commitment, etc. All appointments made or to be made by the Board are merit-based, and candidates are selected based on objective criteria taking full consideration of board diversity. Final decisions are comprehensively made based on each candidate's attributes and the consideration for his/her valuable contributions that can be made to the Board. The Nomination Committee oversees the implementation of Board Diversity Policy, reviews the existing policy as and when appropriate, and recommends proposals for revisions for the Board's approval.
There is currently one female Director on the Board. The Company will continue to be committed to maintaining gender diversity in the composition of the Board. The Board currently comprises experts from diversified professions such as telecommunications, accounting, finance, law, banking, regulatory, compliance, management and economics with diversification in terms of gender, age, duration of service, etc., advancing the enhancement of management standard and the further standardisation of corporate governance practices, which results in a more comprehensive and balanced Board structure and decision-making process. Each Director brings to the Board different views and perspectives. Both the Nomination Committee and the Board believe that the gender, age, educational background, professional experience, skills, knowledge and the duration of service of the Board members are in alignment with the Board Diversity Policy.
The below chart sets out the analysis of the current Board composition:
The Company strictly complies with the Corporate Governance Code to rigorously regulate the operating procedures of the Board and its Committees, and to ensure that the procedures of the Board meetings are in compliance with related rules in terms of organisation, regulations and personnel. The Board responsibly and earnestly supervises the preparation of financial statements for each financial period, so that such financial statements truly and fairly reflect the financial condition, the operating results and cash flows of the Company for such period. In preparing the financial statements for the year ended 31 December 2022, the Directors adopted appropriate accounting policies and made prudent, fair and reasonable judgements and estimates, and prepared the financial statements on a going concern basis.
The Articles of Association clearly defines the respective duties of the Board and the management. The Board is accountable to the shareholders' meetings, and its duties mainly include the execution of resolutions, formulation of major operational decisions, financial proposals and policies, formulation of the Company's basic management system and the appointment of senior management. The management is responsible for leading the production, operation and management of the Company, the implementation of Board resolutions and the annual operation plans and investment proposals of the Company, formulating the proposal of the Company's internal administrative organisations and suborganisations, and performing other duties as authorised by the Articles of Association and the Board. In order to maintain highly efficient operations, as well as flexibility and swiftness in operational decision-making, the Board may delegate its management and administrative powers to the management when necessary, and shall provide clear guidance regarding such delegation so as to avoid impeding or undermining the capabilities of the Board when exercising its powers as a whole.
The Board formulates and reviews the Company's policies and practices on corporate governance; reviews and monitors the training and continuous professional development of Directors and senior management; reviews and monitors the Company's policies and practices on compliance with legal and regulatory requirements; formulates, reviews and monitors the code of conduct for employees; and reviews the Company's compliance with the Corporate Governance Code and disclosure in the Corporate Governance Report.
(6) Directors' training and continuous professional development
The Company provides guidelines including on directors' duties, continuing obligations, relevant laws and regulations, operation and business of the Company to newly appointed Directors so that they are provided with tailored induction relating to their appointment. To ensure that the Directors are familiar with the Company's latest operations for decision-making, the Company arranges for key financial data and operational data to be provided to the Directors on a monthly basis. Meanwhile, through regular Board meetings and reports from management, the Directors are able to have clearer understanding of the operations, business strategy, and the latest development of the Company and the industry.
In addition, the Company reminds the Directors of their functions and duties by continuously providing them with information regarding the latest development of the Dual Listing Rules and other applicable regulations, and arranging internal training on topics related to the latest development of the industry and operational focus of the Company for mutual exchange of ideas and discussion. The Directors actively participate in training and continuous professional development to develop and refresh their knowledge and skills in order to contribute to the Company.
During the year, the Directors have participated in training and continuous professional development activities, and the summary is as follows:
|Directors||Types of training|
|Ke Ruiwen||A, B|
|Li Zhengmao*||A, B|
|Shao Guanglu||A, B|
|Liu Guiqing||A, B|
|Tang Ke||A, B|
|Chen Shengguang||A, B|
|Independent Non-Executive Directors|
|Tse Hau Yin, Aloysius*||A, B|
|Xu Erming*||A, B|
|Wang Hsuehming||A, B|
|Yeung Chi Wai, Jason||A, B|
Mr. Tse Hau Yin, Aloysius and Mr. Xu Erming resigned from their position as Independent Non-Executive Directors of the Company on 16 August 2022 and their resignation took effect on the date of election of new Independent Non-Executive Directors at the shareholders' meeting on 6 January 2023.
(7) Compliance with the Model Code for Securities Transactions by Directors and Supervisors and confirmation of independence by the Independent Non-Executive Directors
The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules to govern securities transactions by the Directors and Supervisors. Based on the written confirmation from the Directors and Supervisors, the Company's Directors and Supervisors have strictly complied with the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix 10 of the Listing Rules regarding the requirements in conducting securities transactions for the year 2022. Meanwhile, the Company has received annual independence confirmation from each of the Independent Non-Executive Directors and considered them to be independent.
|Session||Date||Resolutions of the Meeting|
|15th meeting of
the seventh session of the Board
|2022-02-23||THAT the proposal on the purchase of liabilities insurance for the Company and its Directors, Supervisors and senior management be considered|
|16th meeting of
the seventh session of the Board
|17th meeting of
the seventh session of the Board
|2022-04-20||THAT the proposal on the 2022 First Quarterly Report be considered|
|18th meeting of
the seventh session of the Board
|2022-04-26||THAT the proposal on the appointment of Executive Vice Presidents, Chief Financial Officer and the proposed appointment of Directors of the Company be considered|
|19th meeting of
the seventh session of the Board
|20th meeting of
the seventh session of the Board
|2022-09-05||THAT the proposal on the appointment of the Secretary of the Board of the Company be considered|
|21st meeting of
the seventh session of the Board
|22nd meeting of
the seventh session of the Board
|2022-12-08||THAT the proposal on convening the second extraordinary general meeting in year 2022 be considered|
|23rd meeting of
the seventh session of the Board
|2022-12-12||THAT the proposal on external auditor's audit fees for the year of 2022 be considered|
|24th meeting of
the seventh session of the Board
|2022-12-13||THAT the proposal on entering into agreements in relation to related party transactions with China Tower Corporation Limited and expected annual caps for the year of 2023 in respect of such related party transactions be considered|
|25th meeting of
the seventh session of the Board
In 2022, the Company convened 11 Board meetings in total (including on-site meetings and meetings held by communication); the Chairman held a meeting to independently communicate with the Independent Non-Executive Directors without the presence of any other Directors to ensure their opinions can be fully expressed, which further facilitated the exchange of different views within the Board.
Attendance of Directors at Board meetings and general meetings
|Attendance at Board meetings||Attendance at general meetings|
|Name of Director||Whether as an Independent Director||Required attendance during the year||Attendance in person||Attendance by way of communication||Attendance by proxy*||Absent Times||Failure to attend two consecutive meetings in person||Number of general meetings attended|
|Li Zhengmao (resigned)||No||4||4||2||0||0||No||2|
|Tse Hau Yin, Aloysius (resigned)||Yes||11||11||7||0||0||No||2|
|Xu Erming (resigned)||Yes||11||11||7||0||0||No||2|
|Yeung Chi Wai, Jason||Yes||11||11||7||0||0||No||2|
|Number of Board meetings held during the year||11|
|Including: Number of on-site meetings||4|
|Number of meetings held by communication||7|
|Number of meetings held both on site and by means of communication||0|
(1) Members of the special committees under the Board as at the end of the Reporting Period
|Category of special committees||Name of Members|
|Audit Committee||Tse Hau Yin, Aloysius (Chairman), Xu Erming, Wang Hsuehming,
Yeung Chi Wai, Jason
|Remuneration Committee||Xu Erming (Chairman), Tse Hau Yin, Aloysius, Wang Hsuehming|
|Nomination Committee||Wang Hsuehming (Chairlady), Tse Hau Yin, Aloysius, Xu Erming|
(2) Audit Committee
As at 31 December 2022, the Audit Committee comprised 4 Independent Non-Executive Directors, Mr. Tse Hau Yin, Aloysius as the Chairman and Mr. Xu Erming, Madam Wang Hsuehming and Mr. Yeung Chi Wai, Jason as the members. The Audit Committee currently comprises 4 Independent Non-Executive Directors, Mr. Ng, Kar Ling Johnny as the Chairman and Madam Wang Hsuehming, Mr. Yeung Chi Wai, Jason and Mr. Chen Dongqi as the members. The Audit Committee is responsible to the Board. The Rules of Procedures of the Audit Committee clearly defines the status, structure and qualifications, work procedures, duties and responsibilities, funding and remuneration, etc. of the Audit Committee. The Audit Committee's principal duties include the supervision of the truthfulness and completeness of the Company's financial statements, the effectiveness and completeness of the Company's internal control and risk management systems as well as the work of the Company's Internal Audit Department. It is also responsible for the supervision and review of the qualifications, selection and appointment, independence and services of external independent auditors. The Audit Committee ensures that the management has discharged its duty to establish and maintain an effective risk management and internal control system including the adequacy of resources, qualifications and experience of staff fulfilling the accounting, internal control and financial reporting functions of the Company together with the adequacy of the staff's training programmes and the related budget. The Audit Committee also has the authority to set up a reporting system on whistleblowing to receive and handle cases of complaints or complaints made on an anonymous basis regarding the Company's accounting, internal control and audit matters.
In 2022, pursuant to the requirements of the governing laws and regulations of the places of listing and the Rules of Procedures of the Audit Committee, the Audit Committee fully assumed its responsibilities within the scope of the clear mandate from the Board and communicated independently with the external auditors twice a year. The Audit Committee proposed a number of practical and professional recommendations for improvement based on the Company's actual circumstances in order to promote the continuous improvement and perfection of corporate management. The Audit Committee has provided important support to the Board and played a significant role in protecting the interests of the independent shareholders.
The Audit Committee convened 7 meetings during the Reporting Period
|Date||Agenda of meeting||Important comments and suggestions||Other Performance of Duties|
|2022-04-20||To consider the proposal on the 2022 First Quarterly Report||Nil||Nil|
|2022-10-20||To consider the proposal on the 2022 Third Quarterly Report||Nil||Nil|
|2022-12-13||To consider the proposal on entering into agreements in relation to related party transactions with China Tower Corporation Limited and expected annual caps for the year of 2023 in respect of such related party transactions||Nil||Nil|
The attendance of each member is as follows:
|Name of Members||Actual attendance/Required attendance|
|Tse Hau Yin, Aloysius||7/7|
|Yeung Chi Wai, Jason||7/7|
(3) Remuneration Committee
As at 31 December 2022, the Remuneration Committee comprised 3 Independent Non-Executive Directors, Mr. Xu Erming as the Chairman and Mr. Tse Hau Yin, Aloysius and Madam Wang Hsuehming as the members. The Remuneration Committee currently comprises 3 Independent Non-Executive Directors, Mr. Yeung Chi Wai, Jason as the Chairman and Mr. Ng, Kar Ling Johnny and Madam Wang Hsuehming as the members. The Remuneration Committee is responsible to the Board. The Rules of Procedures of the Remuneration Committee clearly defines the status, structure and qualifications, work procedures, duties and responsibilities, funding and remuneration, etc. of the Remuneration Committee. The Remuneration Committee assists the Board to formulate overall remuneration policy and structure forthe Company's Directors and senior management, and to establish related procedures that are standardised and transparent. The Remuneration Committee's principal duties include giving recommendations to the Board in respect of the overall remuneration policy and structure for the Company's Directors and senior management and the establishment of a formal and transparent procedure for developing remuneration policy, and determining, with delegated responsibility by the Board, the remuneration packages of individual Executive Directors and senior management including benefits in kind, pension rights and compensation payments (including any compensation payable for loss or termination of their office or appointment). Its responsibilities comply with the requirements of the Corporate Governance Code.
The Remuneration Committee convened 1 meeting during the Reporting Period
|Date||Agenda of meeting||Important comments and suggestions||Other Performance of Duties|
|2022-10-20||THAT the resolution in relation to Directors' remuneration proposal be considered.||Nil||Nil|
The attendance of each member is as follows:
|Name of Members||Actual attendance/Required attendance|
|Tse Hau Yin, Aloysius||1/1|
(4) Nomination Committee
As at 31 December 2022, the Nomination Committee comprised 3 Independent Non-Executive Directors, Madam Wang Hsuehming as the Chairlady and Mr. Tse Hau Yin, Aloysius and Mr. Xu Erming as the members. The Nomination Committee currently comprises 3 Independent Non-Executive Directors, Mr. Chen Dongqi as the Chairman and Mr. Ng, Kar Ling Johnny and Mr. Yeung Chi Wai, Jason as the members. The Nomination Committee is responsible to the Board. The Rules of Procedures of the Nomination Committee clearly defines the status, structure and qualifications, work procedures, duties and responsibilities, funding and remuneration, etc. of the Nomination Committee, and it specifically requires that the Nomination Committee members shall have no significant connection with the Company, and comply with the regulatory requirements related to "independence". The Nomination Committee assists the Board to formulate standardised, prudent and transparent procedures for the appointment and succession plans of Directors, and to further optimise the composition of the Board. The principal duties of the Nomination Committee include regularly reviewing the structure, number of members, composition and diversity of the Board; identifying candidates with the appropriate qualifications for the position of Directors and senior management and advising the Board on the same; reviewing the Board Diversity Policy as appropriate to ensure its effectiveness; evaluating the independence of Independent Non-Executive Directors; advising the Board on matters regarding the appointment or re-appointment of Directors and succession plans for the Directors.
The Nomination Committee convened 3 meetings during the Reporting Period
|Date||Agenda of meeting||Important comments and suggestions||Other Performance of Duties|
|2022-03-16||THAT the proposal on the structure and operation review of the Board for the year of 2021 be considered||Nil||Nil|
|2022-04-26||THAT the proposal on the appointment of Executive Vice Presidents, Chief Financial Officer and the proposed appointment of Directors of the Company be considered||Nil||Nil|
The attendance of each member is as follows:
|Name of Members||Actual attendance/Required attendance|
|Tse Hau Yin, Aloysius||3/3|
The Supervisory Committee had no objection to the matters under supervision during the Reporting Period.
|Total number of employees||280,683|
|Composition of professions|
|Categories of professions||Number of professionals|
|Management, Finance and Administration||49,650|
|Sales and Marketing||134,426|
|Operations and Maintenance||74,265|
|Sci-tech Research and Product Development||22,342|
|Categories of education level||Number (person)|
|High school and below||19,330|
As at the end of the Reporting Period, the percentages of female employees, female managers and female among new employees are 31.68%, 21.30% and 34.77%, respectively. The Company offers equal opportunities to all the applicants in its recruitments without discrimination against ethnicity, race, gender, age, region, marital status or physical condition, adheres to principles of equal pay for equal work, and provides employees with promotion in their positions. For details, please refer to the CSR Report 2022 of the Company published by the Company on the websites of the Hong Kong Stock Exchange (www.hkexnews.hk) and the Company (www.chinatelecom-h.com).
(2) Emolument policy
In accordance with the income distribution principle of enhancing efficiency and promoting fairness, while improving the market-oriented remuneration distribution mechanism with efficiency as the priority, the Company emphasises on protecting and improving the salary income of grassroots front-line employees and ensures that employees can share the benefits of the Company's reform and growth. The Company actively implemented medium and long-term incentives such as equity incentives for listed companies and equity and dividend incentives for state-owned technology enterprises to further stimulate the enthusiasm and creativity of core talents at all levels.
(3) Training program
In 2022, the Company attached importance to the development of cadres and professional talent team. According to the high quality and professionalised requirements, the Company organised various special education training courses for leaders and cadres; Serving the transformation of the workforce, the Company organised a series of trainings for high-level professionals in key areas; In reliance on the online university learning platform, the Company held the "Cloudification and Digital Transformation" lectures, talk series on the road to transformation and online training courses for various professions; Focusing on cloud business and Industrial Digitalisation development, the Company adopted the methods of theory+practice and training+certification to launch the Overall Cloud team empowerment, thus facilitating high quality development of the Company.
(1) Formulation, implementation or adjustment of cash dividend policy
Pursuant to the Articles of Association, under the premise that the Company's profit distribution does not exceed the cumulative distributable profit and that the Company takes into account the continuous profits, meeting regulatory requirements, operating normally and development in the long term, the Company will give priority to cash distribution of dividends. If the Company has no events such as major investment plans or significant cash expenditures, and the Company's risk control indicators can meet regulatory requirements and the normal operating capital requirements of the Company can be satisfied after the distribution of cash dividends, within any three consecutive years, the cumulative profit distributed by the Company in cash shall be no less than 30% of the annual average distributable profit realised in such three years.
Pursuant to the previous decision of the Board, within three years after the A Share Offering and Listing, the profit to be distributed by the Company in cash for each year will gradually increase to 70% or above of the profit attributable to equity holders of the Company for that year. After fully considering the Company's cash flow level, the cash return to shareholders, etc., the Board of Directors proposed a final dividend of RMB0.076 per share (pre-tax) in an aggregate amount of RMB6,955 million calculated based on 91,507 million shares, being the total number of issued share capital of the Company as at the end of 2022. The dividend distribution is derived from net profit realised in the current period. Together with the 2022 interim dividend of RMB0.120 per share (pre-tax) which has been distributed, the full-year dividend of 2022 amounts to RMB0.196 per share (pre-tax) in an aggregate amount of RMB17,935 million which represents 65% of the profit attributable to equity holders of the Company for the year 2022. In case of any change in the total number of issued share capital of the Company before the record date for the implementation of the dividend distribution, the total distribution amount will remain unchanged, and the distribution amount per share will be adjusted accordingly.
The profit distribution plan will be submitted to the Annual General Meeting of the Company for the year 2022 for consideration and approval.
(2) Specific description of cash dividend policy
|Compliance with the Articles of Association or the resolutions of the general meeting||✔ Yes||▢ No|
|Clear and definite standards and proportion of dividend distribution||✔ Yes||▢ No|
|Complete decision-making procedures and mechanisms||✔ Yes||▢ No|
|Independent Directors fulfilled their duties and played their role||✔ Yes||▢ No|
|Minority shareholders have the opportunity to fully express their opinions and appeals, and their legitimate rights and interests have been fully protected||✔ Yes||▢ No|
(3) Profit distribution and conversion of capital reserve into share capital during the Reporting Period
|Unit: Yuan Currency: RMB|
|Number of bonus shares for every 10 shares (share)||0|
|Dividend per 10 shares (RMB) (pre-tax)||1.96|
|Number of shares converted for every 10 shares (share)||0|
|Amount of cash dividend (pre-tax)||17,935,399,185|
|Profit attributable to shareholders of the Company in the consolidated financial statements for the year of dividend distribution||27,593,420,934|
|Percentage of profit attributable to shareholders of the Company in the consolidated financial statements (%)||65%|
|Amount of shares repurchased in cash included in cash dividend||0|
|Total amount of dividend (pre-tax)||17,935,399,185|
|Percentage of total dividend to profit attributable to shareholders of the Company in the consolidated financial statements (%)||65%|
(1) Share appreciation rights
The Company implemented two phases of share appreciation rights scheme in 2018 and 2021, respectively, to provide mid- to long-term incentives for key personnel (excluding the Executive Directors, Non-Executive Directors, Independent Directors, Supervisors and senior management of the Company). As approved by the Board, according to the 2021 Share Appreciation Rights Proposal, the Company granted a total of approximately 2,402 million H share appreciation rights to 7,908 key personnel of the Company with an exercise price of HK$2.686.
Firstly, share appreciation rights are distributed based on contribution, adhering to the value-oriented principle and tilting towards units with remarkable high-quality development. Secondly, share appreciation rights are distributed based on potential, which adheres to the development orientation and tilts to the key areas of "Cloudification and Digital Transformation" and high-end and high-quality talents. Thirdly, share appreciation rights are granted based on performances. The Company adheres to the performance-oriented principle and closely links the number of rights exercised with the Company's performance and employees' individual performance, and imposes penalties for failure to achieve performance targets.
The scheme does not involve the grant of shares or other securities of the Company or any of its principal subsidiaries (including the grant of options for the purchase of any of such shares or securities) and therefore, it does not fall within the scope of, and is not subject to, the requirements under Chapter 17 of the Listing Rules. Further details of the share appreciation scheme are set out in note 46 of the audited consolidated financial statements.
(2) Establishment and implementation of the appraisal mechanism and incentive mechanism for senior management during the Reporting Period
During the Reporting Period, the incentives of senior management were closely linked to the overall operating results of the Company. The senior management are evaluated for work performance within their scope of duties, focusing on the financial performance, customer and market performance, compliance and risk control, completion of annual key tasks and cadre training in their areas of responsibilities.
The Board attaches great importance to the establishment and perfection of the risk management and internal control systems. The Board is responsible for evaluating and determining the nature and extent of the risks it is willing to take in achieving the Company's strategic objectives, and ensuring that the Company establishes and maintains appropriate and effective risk management and internal control systems, and the Board acknowledges that it is responsible for the risk management and internal control systems and for reviewing their effectiveness. Such systems are designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable but not absolute assurance against material misstatements or losses. The Board oversees management in the design, implementation and monitoring of the risk management and internal control systems. The Board takes effective approaches to supervise the implementation of related control measures, whilst enhancing operation efficiency and effectiveness, and optimising corporate governance, risk assessment, risk management and internal control so that the Company can achieve long-term development goals.
The risk management and internal control systems of the Company is built on clear organisational structure and management duties, an effective delegation and accountability system, definite targets, policies and procedures, comprehensive risk assessment and management, a sound financial accounting system, and continuing analysis and supervision of operational performance, etc. which plays a pivotal role in the Company's overall operation. The Company has formulated a code of conduct for the senior management and employees which ensures their ethical value and competency. The Company attaches great importance to the prevention of fraud and has formulated its internal reporting system, which encourages anonymous reporting of situations where employees, especially Directors and senior management, breach the rules.
The internal control management system of the Company mainly includes internal control manual, implementation guidance, list of authority and relevant systems and measures. The Company continuously revises and improves the internal control system according to the changes in the internal control environment and the needs of business development. In accordance with the internal control management system of the Company and based on the management needs of the Company, each subsidiary has refined and improved its internal control manual, forming a complete, comprehensive and effective internal control system.
The Company views risk management as an important task within the Company's daily operation. Pursuant to regulatory requirements in capital markets where the shares of the Company are listed, the Company has achieved closed-loop management of risk identification, risk assessment, key risk analysis, risk response and tracking and monitoring of risk management based on risk management theory. In continuously strengthening the risk process control and management and focusing on significant risk which may be encountered, the Company follows, monitors and reports the status of risk management and control regularly to ensure risks are manageable and controllable. Following the efforts made over the years, the Company has established a structured and highly effective comprehensive risk management system and has gradually perfected its comprehensive risk monitoring and prevention mechanism.
In 2022, pursuant to the requirement of code provision D2 of the Corporate Governance Code promulgated by the Stock Exchange, the Company concentrated resources on the prevention of significant potential risks, and strived to reduce negative effect from significant risks. The Company was not confronted by any major risk event throughout the whole year.
The Company has identified, assessed and analysed potential major risks faced by the Company in 2023, including areas of economic and policy environment adaptation, business operation, network and information security and international operation etc., determined major risk points and put forward detailed response plans. For details of the major risks that the Company may face and the response measures thereof, please refer to the section headed "Management's Discussion and Analysis (Report of the Directors)" in this annual report. Through strict and appropriate risk management procedures, the Company will ensure the potential impact from the above risks on the Company is limited and within an expected range.
The Company highly values the compliance with the laws and regulations of the PRC as well as the places of listing of the Company and where the Company's business operations are located, strictly complies with all laws and regulations and timely and proactively incorporates the laws and regulations into the Company's rules and regulations to protect the Company's legitimate business management, maintain the Company's legitimate rights and interests and support the Company to achieve long-term healthy development target. Please refer to the section headed "Management's Discussion and Analysis (Report of the Directors)" of this annual report for the newly published policies, laws and regulations relating to the industry in which the Company operated during the Reporting Period.
Since 2003, the Company has formulated manuals, implementation rules and related rules in relation to internal control, and has developed the Policies on Internal Control Management and Internal Control Accountability Management to ensure the effective implementation of the above systems. The Company has all along continuously revised and improved the manuals and implementation rules in view of the ever changing internal and external operation environment as well as the requirements of business development over the years. While continuing to improve the internal control related policies, the Company has also been strengthening its IT internal control capabilities, which has improved the efficiency and effectiveness of internal control and enhanced the safety of the Company's information system so that the integrity, timeliness and reliability of data and information are maintained. At the same time, the Company attaches great importance to the control and monitoring of network information safety. The Company persistently optimises the relevant rules and guidances, further defines the responsible entities and regularly commences the inspection of network safety and information safety in order to promote the enhancement of the awareness of network information safety and relevant skills and knowledge.
The Company attaches great importance to the construction of internal control system. In 2022, in consideration of the needs from various aspects including external regulatory environment, internal regulatory requirements and business development, the Company revised the internal control evaluation method, internal control manual, authority list and implementation details during the year. The Company added the DICT business management process to optimise the government-enterprise business process, procurement management process, reward point business process, budget management and financial analysis business process, etc. The Company has built an enhanced comprehensive internal control system.
The Internal Audit Department plays a vital role in supporting the Board, the management and the risk management and internal control systems. The functions of the Internal Audit Department are independent of the Company's business operations, complementary with the functions of the external auditors and plays an important role in the monitoring of the Company's internal management. The Internal Audit Department is responsible for internal control assessment of the Company, and provides reasonable assurance to the Audit Committee and the Board that the risk management and internal control systems are maintained and operated by the management in compliance with agreed processes and standards. The Internal Audit Department regularly reports the internal audit results to the Audit Committee on a quarterly basis, and reports the internal audit results to the Board through the Audit Committee.
Annual evaluation of risk management and internal control systems
The Company has been continuously improving the risk management and internal control systems to meet the regulatory requirements of the places where the Company's shares are listed and strengthening its internal control while guarding against operational risk.
With Specific Standards for Internal Audit No. 2201 issued by the China Institute of Internal Audit as guidance, the Company's internal control assessment system is composed of the self-assessment conducted by the persons responsible for internal control together with the independent assessment conducted by the Internal Audit Department. In order to evaluate the nature of internal control deficiencies, reach a conclusion as to the effectiveness of the internal control system and rectify any deficiencies found during the assessment, the Company mainly adopts the following 4 major steps of assessment: (1) analyse and identify areas which require assessment, (2) assess the effectiveness of the design of internal control, (3) assess the operating effectiveness of internal control, (4) analyse the impact of deficiencies in internal control. By formulating "Measures for the Internal Control Assessment", "Manual for the Self Assessment of Internal Control", "Manual for the Independent Assessment of Internal Control" and other systems, the Company has ensured the assessment procedures are standardised. In 2022, the Company's Internal Audit Department initiated and coordinated the assessment of internal control all over the Company, and reported the results to the Audit Committee and the Board. In response to the problems identified in the audit and evaluation, the Company carried out the rectification responsibility one by one, which effectively controlled and prevented risk and provided a strong guarantee for the healthy development of the Company.
In 2022, in terms of internal control self-assessment, the Company continued to insist on 100% coverage of all units (including the newly incorporated professional companies). Through internal control self-assessment, the Company continued to encourage management at all levels to consolidate the responsibility of self-assessment, and incorporated the internal control self-assessment into the examination, reward and punishment system of each unit, further increasing the quality of internal control self-assessment; By optimising the self-assessment programme, the Company pivoted on the major decisions and deployments of the state and the "Cloudification and Digital Transformation" strategy of the Company, with focuses on the major risks, key areas, important processes and management weaknesses, further highlighting the essence and focuses of the self-assessment; The Company innovated the self-assessment methods and launched a company-wide internal control self-assessment labour competition to stimulate employees' enthusiasm and creativity in self-assessment as well as promote departmental synergy and business-finance linkage; The Company strengthened the application of information technology, and enhanced its ability to assess and detect significant risks by means of systematic modeling and risk profiling, thus improving the efficiency and effectiveness of self-assessment; In order to strengthen the rectification of problems, the Company carried out self-assessment on the problems found in the rectification and "looked back" to establish a mechanism for checking and cleaning up problems, thus further strengthening the closed-loop management and consolidating the achievements of self-assessment.
In 2022, the Company carried out independent assessment of internal control for its 5 subordinate units and achieved three-year full coverage of independent assessment of internal control for all subordinate units. During the year, the independent assessment of internal control continued toThe Audit Committee convened 7 meetings during the Reporting Period strengthen the tracking, analysis and judgment of changes in the internal and external environment of the enterprise development, and focused on the selection of evaluation units and contents. Firstly, the Company carried out an audit combining responsibility and internal control. On the basis of identifying the problems, the causes of problems were analyzed in depth from the perspective of internal control, which helped the auditees to strengthen governance at the sources, so that multiple outcomes from first audit and multiple functions from a single outcome could be achieved, which in turn improved the audit effectiveness; Secondly, the Company strengthened the guidance, supervision and inspection of independent assessment on self-assessment, so as to conduct independent assessment on self-assessment and prevent self-assessment from "going through over leniency", thus improving the overall efficiency and effectiveness of internal control assessment; Thirdly, the Company focused on joint defence and control. By means of special audit and internal control investigation, the Company strengthened audit supervision on key units and key areas such as emerging businesses and financial-related businesses in order to prevent and resolve major risks; Fourthly, the Company attached great importance to the rectification of problems and analyzed their causes in depth, implemented rectification by analogy and addressed both the symptoms and root causes of the problems, so as to enhance corporate's self-examination and self-recovery abilities and support high-quality development of the Company.
Furthermore, the Company organised the risk management and internal control assessment team and other relevant departments to closely coordinate with the external auditors' audit of internal control over financial reporting. The internal control audit performed by the external auditor covered the Company and all of its subsidiaries as well as the key processes and control points in relation to material financial statements items. The external auditors regularly communicated with the management in respect of the audit results.
The Company attaches great importance to rectifying internal control deficiencies. In response to the defects and problems found in the internal and external audit, the Company consolidated its rectification responsibilities, strengthened governance at the sources and implemented long-term rectification by analogy. By supervising and inspecting the rectification in a timely manner, the Company ensured the effectiveness of rectification through various means and strengthened closed-loop management. The internal control deficiencies and issues identified by the Company during the year have been basically rectified and passed the year-end attestation undertaken by the external auditors.
The Board oversees the Company's risk management and internal control systems on an on-going basis and the Board, through the Audit Committee, conducted an annual review of the risk management and internal control systems of the Company and its subsidiaries for the year ended 31 December 2022, which covered all material areas including financial controls, operational controls and compliance controls, as well as its risk management functions. After receiving the reports from the Internal Audit Department and other relevant department and the confirmation from the management to the Board on the effectiveness of the Company's risk management and internal control systems (including Environmental, Social and Governance risk management and internal control systems), the Board is of the view that these systems are solid, well established, effective and sufficient. The annual review also confirms the adequacy of resources relating to the Company's accounting, internal control and financial reporting functions and Environmental, Social and Governance performance and reporting, the sufficiency of the qualifications and experience of staff, together with the adequacy of the staff's training programmes and the relevant budget.
In order to make every effort to build a more mature and established modern enterprise system with Chinese characteristics and promote the modernisation of governance system and capability, China Telecom issued a series of system documents related to the promotion and improvement of modern enterprise system with Chinese characteristics to guide subsidiaries at all levels to standardise and strengthen corporate governance. Firstly, the Company strengthened the construction of the corporate fundamental system of the Articles of Association of the subsidiaries, improved the basic internal regulations, enhanced the internal system, and promoted all governance bodies to perform their duties in accordance with their Articles of Association and systems in decision-making, implementation, supervision and other aspects, leading to the better transformation and integration of system construction and governance efficiency. Secondly, the Company strengthened the establishment of the board of directors of subsidiaries with terms of reference to promote the fulfillment of the requirements to strengthen the construction of the board of directors, standardise the operation of the board of directors, reasonably determine the size of the board of directors, scientifically allocate directors, achieve the majority of external directors and implement the terms of reference of the board of directors. Thirdly, the Company strengthened the delegation of authority, streamlined decision-making procedures and improved the quality of decision-making. The Company encouraged the subsidiaries to improve the working system of each governance body, established a management system authorised by the board of directors to the management in accordance with practices and strengthened the management before, during and after the events, so as to promote each subsidiary to become a more independent market operation entity.
PricewaterhouseCoopers Zhong Tian LLP engaged by the Company has issued an audit opinion on the effectiveness of the Company's internal control over financial reporting and issued the Internal Control Audit Report, and is of the view that the Company has maintained effective internal control over financial reporting in all material aspects in accordance with the Basic Standards for Enterprise Internal Control and relevant regulations as at 31 December 2022. There was no disagreement between the 2022 Internal Control Assessment Report of China Telecom Corporation Limited disclosed by the Company and the Internal Control Audit Report.
The Company will identify suitable Director candidates through multiple channels such as internal recruitment and recruiting from the labour market. The criteria of identifying candidates include but not limited to their gender, age, educational background, professional experience, skills, knowledge and length of service and capability to commit to the affairs of the Company and, in the case of Independent Non-Executive Director, the candidates should fulfill the independence requirements set out in the Dual Listing Rules from time to time. After the Nomination Committee and the Board have reviewed and resolved to appoint the appropriate candidate, the relevant proposal will be put forward in writing to the shareholders' meeting for approval.
Directors shall be elected at shareholders' general meeting for a term of three years. At the expiry of a director's term, the director may stand for re-election and reappointment for a further term. However, independent directors shall not serve for more than six consecutive years. Pursuant to the Articles of Association, before the Company convenes a shareholders' general meeting, the board of directors, the supervisory committee or shareholders, individually or jointly, holding 3% or more of the total voting shares of the Company shall have the right to propose new motions (such as election of directors) in writing, and the Company shall place such proposed motions on the agenda for such general meeting if they are matters falling within the functions and powers of shareholders in general meetings. Pursuant to the Articles of Association, shareholders can also request to convene an extraordinary general meeting. Shareholder(s) individually or collectively holding 10% or more of the Company's issued and outstanding voting shares may sign a written proposal requesting the board of directors to convene an extraordinary general meeting. If the board of directors decides to convene an extraordinary general meeting, a notice to convene such meeting shall be issued within five days after the resolution to convene an extraordinary general meeting is adopted by the board of directors. The Company shall convene an extraordinary general meeting for election of directors within two months. The minimum period during which written notice given to the Company of the intention to propose a person for election as a director, and during which written notice to the Company by such person of his/her willingness to be elected may be given, will be at least 7 days. Such period will commence no earlier than the day after the despatch of the notice of the meeting for the purpose of considering such election and shall end no later than 7 days prior to the date of such meeting. An ordinary resolution for election of directors must be passed by votes representing half or more of the voting rights represented by the shareholders (including proxies) present at the meeting.
As at 31 December 2022, the Company's Supervisory Committee comprised 5 Supervisors, including 2 Employee Representative Supervisors. The principal duties of the Supervisory Committee include supervising, in accordance with the law, the Company's financials and performance of its Directors, managers and other senior management so as to prevent them from abusing their powers. The Supervisory Committee is a standing supervisory organisation within the Company, which is accountable to and reports to all shareholders. The Supervisory Committee convened 6 meetings in 2022. The term of office for the seventh session of the Supervisory Committee lasts for 3 years, starting from 26 May 2020 until the day of the Annual General Meeting for the year 2022 to be held in year 2023, upon which the eighth session of the Supervisory Committee will be elected.
|Supervisors||Number of Meetings Attended/Required Attendance|
(Chairlady of the Supervisory Committee and Shareholder Representative Supervisor)
|Zhang Jianbin (Employee Representative Supervisor)||6/6|
|Dai Bin (Employee Representative Supervisor)||6/6|
|Xu Shiguang (Shareholder Representative Supervisor)||6/6|
|Wang Yibing (Shareholder Representative Supervisor)||5/5|
|Sui Yixun (Chairman of the Supervisory Committee and Shareholder Representative Supervisor)*||1/1|
|You Minqiang (Shareholder Representative Supervisor)*||1/1|
The Company's external auditors are PricewaterhouseCoopers and PricewaterhouseCoopers Zhong Tian LLP. A breakdown of the remuneration received by the external auditors for audit and non-audit services provided to the Company for the year ended 31 December 2022 is as follows:
|Service item||Fee (excluding value-added tax)
|Non-audit services (mainly tax and other advisory services)||6|
The Directors of the Company are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with the International Financial Reporting Standards as issued by the International Accounting Standards Board and the disclosure requirements of the Hong Kong Companies Ordinance, and for such internal control as the Directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The Directors were not aware of any material uncertainties relating to any events or conditions which may cast a serious impact upon the Group's ability to continue as a going concern. The statements by the external auditors of the Company, PricewaterhouseCoopers, regarding their reporting responsibilities on the consolidated financial statements of the Company is set out in the Independent Auditor's Report on pages 179 to 184 of this annual report.
The term of appointment of Deloitte Touche Tohmatsu and Deloitte Touche Tohmatsu Certified Public Accountants LLP, the international and domestic auditors for the year 2020, expired on the date of the Annual General Meeting for the year 2020 (7 May 2021). The appointments of PricewaterhouseCoopers and PricewaterhouseCoopers Zhong Tian LLP as the external auditors of the Company for the year of 2021 and the external auditors of the Company for the year of 2022 were respectively approved at the Annual General Meeting for the year of 2020 and the Annual General Meeting for the year of 2021. The Audit Committee and the Board of the Company had agreed on the re-appointment of PricewaterhouseCoopers and PricewaterhouseCoopers Zhong Tian LLP as the external auditors of the Company for the year of 2023 and would propose the re-appointment of PricewaterhouseCoopers and PricewaterhouseCoopers Zhong Tian LLP at the Annual General Meeting for the year of 2022 of the Company for consideration.
The Company established an Investor Relations Department which is responsible for providing shareholders and investors with the necessary information, data and services. It also maintains proactive communications with shareholders, investors and other capital market participants so as to allow them to timely and fully understand the operation and development of the Company. In 2022, the Company formulated and published rules and measures such as the Administrative Measures of Investor Relations of China Telecom Corporation Limited to further strengthen relevant work. The Company's management presents the annual results and interim results every year. Through various activities such as analyst meetings, press conferences, global investor telephone conferences and investors road shows, management provides the capital market and media with important information and responds to key questions which are of prime concerns to the investors. This has helped to reinforce the understanding of the Company's business and the overall development of the telecommunications industry in China. Since 2004, the Company has been holding the Annual General Meeting in Hong Kong. After the completion of A-share listing in 2021, Annual General Meeting was held in both Beijing and Hong Kong physically starting from 2022, with the two venues being connected through video conferencing system. This provided convenience and encouraged its shareholders from both the mainland and Hong Kong, especially the retail shareholders, to actively participate in the Annual General Meeting and promote direct and two-way communications between the Board and shareholders. Due to the COVID-19 Epidemic and relevant travel restrictions in 2022, management attended the results announcement briefings and communicated with investors and the media through online and video conferencing. To strengthen communications with investors and shareholders, the Company set up a dedicated investor relations enquiry line, for the purpose of providing a direct channel to address enquiries from investors. This allows the Company to better serve its shareholders and investors.
In addition, the Investor Relations Department of the Company closely follows the development of the capital market and timely reflects the latest information of the capital market as well as investors' views, suggestions and feedback to management through regular and ad-hoc reports, with an aim to promote two-way communications between the Company and the capital market. In 2022, apart from regular reports such as "China Telecom Weekly Analysis Report of the Capital Market" and the capital market commentaries on the Company's results announcements, Investor Relations Department also prepared thematic reports on a variety of topics such as "corporate governance disclosure", "investor relations" and etc., which helped the management to have a better understanding of the expectations and suggestions from the capital market and enhance interaction with the capital market.
After the successful completion of A-share listing in 2021, the Company further strengthened communications with the capital market, especially domestic investors, through various channels and means. In 2022, the Company launched "China Telecom Investor Relations" official WeChat account. Through this platform, investors can browse important information about the Company such as announcements and press releases more timely and conveniently. In addition, the Company released "results-at-a-glance" for the first time during its results announcements, to allow investors to learn about results highlights in one single picture. The Company also provided live webcast of results briefing for the first time, and answered to investors' questions in real time on the "e-Interaction" section of SSE. The above measures strengthened the Company's information disclosure from different channels and with different means, which effectively promoted investors' understanding of the Company and the communications between the Company and the capital market.
With an aim of strengthening communications with the capital market and enhancing transparency of information disclosure, the Company has provided quarterly disclosure of revenue, operating expenses, EBITDA, net profit figures and other key operational data, and monthly announcements of the number of access lines in service, mobile and wireline broadband subscribers. The Company attaches great importance to maintaining daily communication with shareholders, investors and analysts. In 2022, in view of the travel restriction brought by the COVID-19 Epidemic, the Company proactively participated in a number of investor conferences held by a number of major international investment banks and domestic securities firms around the globe both in person and through online meetings, which facilitated communications with institutional investors.
In 2022, the Company attended the following investor conferences held by major international investment banks and domestic securities firms:
|Date||Name of Conference|
|January 2022||ICBCI Corporate Pre-blackout NDR 2022|
|January 2022||UBS Greater China Conference 2022|
|January 2022||Guosheng Securities Capital Market Summit 2022|
|March 2022||25th Credit Suisse Asian Investment Conference|
|May 2022||Nomura Virtual Greater China TMT Corporate Day 2022|
|May 2022||9th Credit Suisse China A-shares Conference|
|May 2022||HSBC 9th Annual China Conference|
|May 2022||CICC Digital Economy Online Strategy Conference|
|May 2022||CITIC Securities Technology Theme Online Strategy Conference|
|June 2022||CITIC Securities Capital Market Forum 2022|
|June 2022||Haitong Securities Mid-year Investment Strategy Conference 2022|
|June 2022||Guotai Junan Mid-year Strategy Conference 2022|
|June 2022||China Securities Mid-year Capital Market Summit 2022|
|June 2022||Nomura Investment Forum Asia 2022|
|August 2022||Nomura Virtual China Investor Forum 2022|
|August 2022||UBS Tech Week: TMI and Digital Assets Conference 2022|
|September 2022||Jefferies Asia Forum 2022|
|September 2022||23rd Credit Suisse Asian Technology Conference|
|September 2022||CLSA 29th Investors' Forum|
|November 2022||13th Credit Suisse China Investment Conference|
|November 2022||Citi China Investor Conference 2022|
|November 2022||Daiwa Investment Conference Hong Kong 2022|
|November 2022||2022 CICC Investment Forum|
|December 2022||Everbright Securities Annual Online Investment Strategy Conference 2023|
The Company's investor relations website (www.chinatelecom-h.com) not only serves as an important channel for the Company to disseminate press releases and corporate information to investors, media and the capital market, but also plays a significant role in the Company's valuation and its compliance with regulatory requirements for information disclosure. The Company launched a responsive website with the latest technology, which allows automatic adjustment to fit for different screen resolution and user interface, assuring the best browsing experience of website content with desktop computers, laptops or mobile devices. This allows investors, shareholders, reporters and the general public to browse the latest information on the Company's website with any device more easily and promptly anytime anywhere. The Company's website is equipped with a number of useful functions including interactive stock quote, interactive KPI, interactive FAQs, auto email alerts of investors activities, downloading to excel, RSS Feeds, self-selected items in investors briefcase, html version annual report, financial highlights, investor toolbar, historical stock quote, adding investor events to calendars, content sharing to social media, etc. The Company's website has recently introduced the push notification function, which pushes important content update to terminals including desktop computers, laptops and mobile devices through browsers, timely informing website users of the Company's latest news. In addition to setting up a dedicated investor relations enquiry line, a specialised appointment function to schedule a meeting with investor relations professionals was also launched on the Company's website, to promote direct and close communication between the Company and investors, as well as to increase transparency.
The Company also strives to enhance the disclosure quality and format of annual report. The Company further enhanced the transparency of disclosure in environmental, social and governance areas, by following the guidelines of Environmental, Social and Governance Reporting Guide, Appendix 27 of the Listing Rules as well as other relevant regulatory requirements of its places of listing, to report the Company's achievements and key performance indicators on environmental protection. For details, please refer to the CSR Report 2022 which is published on HKEx website (www.hkexnews.hk) and the Company's website (www.chinatelecom-h.com). Relevant indicators and data were analysed and assessed by independent third party to ensure compliance with relevant requirements.
The Company also actively seeks recommendations on how to improve the Company's annual report from shareholders through survey, and prepared and distributed the annual report in a more environmentally-friendly and cost-saving manner according to the recommendations received. Shareholders can ascertain their choice of receiving the annual reports and communications by electronic means, or receiving printed version in English and/or Chinese. The Company clearly and precisely delivered the messages about its strategies and goals in its 2021 Annual Report "A New Milestone", so that shareholders and investors can easily understand the Company's development directions and focus. The print and online versions of the 2021 Annual Report won a number of top accolades in international competitions, including receiving 3 gold awards in total in this year's "Galaxy Awards", while the online annual report further claimed a grand award, achieving outstanding award-wining results. In addition, the 2021 annual report received two gold awards in this year's "International ARC Awards" while also won in total four platinum and six gold awards, and ranked No.10 of "Top 100 Reports Worldwide" in "LACP Vision Awards". The 2021 annual report also won two gold awards in this year's "W3 Awards". The above prestigious accolades won by China Telecom reflect the market's recognition and commendation of the Company's tireless pursuit of excellence and globally leading outstanding performance in areas such as corporate governance, as well as disclosure of important information and development strategy of the Company through both conventional and digital channels.
The Company has always maintained a sound and effective information disclosure mechanism while keeping highly transparent communications with media, analysts and investors. Meanwhile, we attach great importance to the handling of inside information and have formulated rules on information disclosures and guidelines on inside information which encompass (including but not limited to) disclosure of sensitive information and rules on confidential information, identifying the scope of inside information, procedure and management guidelines on handling inside information. In general, the authorised speakers only clarify and explain on information that is available on the market, and avoid providing or divulging any unpublished inside information either as an individual or as a team. Before conducting any external interview, if the authorised speaker has any doubt about the information to be disclosed, he/she would seek verification from the relevant person or the person-in-charge of the relevant department, so as to determine if such information is accurate. In addition, discussions on the Company's key financial data or other financial indicators are avoided during the blackout periods.
The Company formulated "Shareholders Communication Policy of China Telecom Corporation Limited" which is available on the Company's website (www. chinatelecom-h.com). The Company conducted review of the implementation of such shareholders communication policy during the Reporting Period and confirmed its effectiveness.
Procedures for convening of an extraordinary general meeting or a class meeting
According to the Articles of Association, shareholders who request for the convening of an extraordinary general meeting or a class meeting shall comply with the following procedures:
(1) Shareholders who individually or jointly hold more than 10% of the Company's issued and outstanding shares with voting rights (the "Requesting Shareholders") may sign a written proposal requesting the board of directors to convene an extraordinary general meeting or a class meeting. The board of directors shall reply in writing agreeing or disagreeing to convene an extraordinary general meeting or a class meeting within ten days upon receipt of such proposal in accordance with laws, regulations and the Articles of Association.
(2) If the board of directors decides to convene an extraordinary general meeting or a class meeting, a notice to convene such meeting shall be issued within five days after the resolution is adopted by the board of directors. Any changes to the original proposal in the notice require the consent of the Requesting Shareholders.
(3) If the board of directors decides not to convene an extraordinary general meeting or a class meeting or does not reply within ten days upon receipt of such request, the Requesting Shareholders have the right to propose to the Supervisory Committee to convene an extraordinary general meeting or a class meeting by way of written request(s).
(4) If the Supervisory Committee agrees to convene an extraordinary general meeting or a class meeting, a notice to convene such meeting shall be issued within five days upon receipt of such request. Any changes to the original proposal in the notice require the consent of the Requesting Shareholders.
(5) If the Supervisory Committee does not issue the notice of the shareholders' general meeting within the required period, it will be deemed as having failed to convene and preside over the shareholders' general meeting, and shareholders individually or jointly holding 10% or more of the shares of the Company for 90 consecutive days or more (the "Convening Shareholders") have the right to convene and preside over the meeting on their own.
(6) In the event where shareholders convene a shareholders' general meeting on their own initiative, the Convening Shareholders must hold no lower than 10% of shares in the Company immediately before the resolution of such meeting is announced.
Procedures for proposing resolutions at the Annual General Meeting
When the Company convenes an Annual General Meeting, shareholders who individually or jointly hold 3% or more of the total voting shares of the Company shall have the right to propose new motions in writing, and the Company shall place such proposed motions on the agenda for such Annual General Meeting if they are matters falling within the functions and powers of shareholders' meetings.
Process of forwarding shareholders' enquiries to the Board or requesting for convening of an extraordinary general meeting or a class meeting or proposing new motions
Shareholders may at any time send their enquiries, requests, proposals and concerns to the Board in writing through the Company Secretary and the Investor Relations Department.
The contact details of the Company Secretary are as follows:
The Company Secretary
China Telecom Corporation Limited
28th Floor, Everbright Centre,
108 Gloucester Road, Wanchai,
Tel No.: (852) 2877 9777
IR Enquiry: (852) 2582 0388
Fax No.: (852) 2877 0988
A dedicated "Investor" section is available on the Company's website (www.chinatelecom-h.com). There is a FAQ function in the "Investor" section designated to enable timely, effective and interactive communication between the Company, shareholders and investors. Company Secretary and the Investor Relations Department of the Company handle both telephone and written enquiries from shareholders of the Company from time to time. Shareholders' enquiries and concerns will be forwarded to the Board and/or the relevant Board Committees of the Company, where appropriate, which will answer the shareholders' questions. Information on the Company's website is updated regularly.