In 2007, the First Session of the Second Board of Directors re-elected the members of the Special Committees. The Audit Committee include Sun Shuyi, Ng Lin-fung and Ouyang Jie, of which Sun Shuyi  and  Ng  Lin-fung  are  independent  non-executive  directors  with  expertise  and  experience
in financial management. The Remuneration Committee include Yang Xianzu, Ng Lin-fung and Li
Shaozhu, of which Yang Xianzu and Ng Lin-fung are independent non-executive directors.
AttendanceofmembersofeachSpecialCommittee(Attendance/NumberofMeetings)

(3)     Internal Control Mechanisms
i.      Supervisors and Supervisory Committee
On  9  October  2007,  the  members  of  the  Company’s  Supervisory  Committee  were  re-elected  to  be  members  of  the  Second  Session  of  the  Supervisory  Committee  by  shareholders  at  an extraordinary general meeting, with a term of office expiring on 9 October 2010. The Supervisory Committee   of   the   Company   consists   of   eight   supervisors,   of   which   seven   of   which   are shareholders’  representatives  (including  two  independent  supervisors)  and  the  remaining  one  is employees’  representative.  The  size  and  composition  of  the  Company’s  Supervisory  Committee are in compliance with the requirements of the relevant laws and regulations.
Two  Supervisory  Committee  meetings  were  held  during  2007  and  the  attendance  rate  (in person  or  by  proxy  of  other  supervisors)  was  100%.  The  Supervisory  Committee  supervised the Company’s financial matters and the legality and compliance of rules and regulations by the directors and senior management during their performance of duty. The Supervisory Committee’s members attended all Board Meetings and diligently performed their supervisory duties.
ii.     Internal Controls
The Board of Directors is responsible for establishing and maintaining an internal control system of the Company to protect shareholders’ interest and to safeguard the Group’s assets by reviewing the  effectiveness  of  major  control  procedures  for  financial,  operational,  compliance  and  risk management  matters.  Review  work  includes  evaluation  of  internal  controls  by  the  Company’s audit department and the reports by the external auditors setting out issues identified during their statutory audit.
During  the  year,  the  Board  of  Directors  thoroughly  reviewed  the  effectiveness  and  supervision
of  the  Company’s  internal  control  system  for  2007  through  the  Audit  Committee  and  the Company’s audit department in the five major areas of internal control: the control environment, risk  assessment,  control  activities,  information  and  communication  and  supervision.  Based  on the reviews in previous years and the assessment of the internal control system for the year, the Board of Directors is of the opinion that during the year and as at the date of this annual report, the Company has continuously maintained a comprehensive internal control system covering the areas  of  corporate  governance,  operation,  construction,  finance,  administration  and  personnel management, and that such internal control system is effective.
The Board of Directors is of the opinion that the Company’s internal control system is established for the purpose of managing potential risks instead of completely eliminating all risks. Accordingly, the   Company’s   internal   control   system   can   only   render   reasonable,   rather   than   absolute, assurance for the achievement of the Company’s operating objectives.
iii.   Auditors and Auditors’ Remuneration
The Audit Committee is responsible for reviewing the appointment, resignation or replacement of external auditors, as well as assessing their qualifications for providing services to the Company and the reasonableness of the audit fees, and making recommendations to the Board of Directors
in this regard. The appointment and replacement of the Company’s external auditors as well as the audit fees are proposed by the Board of Directors to the general meetings for approval.
Ernst & Young has been appointed as external auditors since 2005 for three consecutive years. The audit fee of the Company for 2007 was RMB10 million.
The  Audit  Committee  has  discussed  and  assessed  the  professionalism  of  Ernst  &  Young,  its performance  of  audit  work  for  2007  and  the  proposed  fees  for  2008.  The  Audit  Committee proposed  to  re-appoint  Ernst  &  Young  as  the  Company’s  external  auditors  and  the  proposal has been approved by the Board of Directors and will be submitted to the 2007 annual general meeting for shareholders’ consideration and approval.