Sustainability

Board of Directors

The Board governs the Group and is responsible for overall management of the Group’s business. It focuses on the overall strategies, policies and business plans of the Group, and monitors the financial performance, internal controls and risk management (including sustainability risk management) of the Group. Executive directors and senior management are responsible for the day-to-day operations of the Group while non-executive directors are responsible for scrutinizing the Group’s performance in achieving agreed corporate goals and objectives, and monitoring the reporting of performance.

The composition of the Board and the attendance of each director in the Board Meetings, annual general meeting (“AGM”) and extraordinary general meeting (“EGM”) during the year ended 31 December 2022 are set out below:

Biographical information of the directors is set out in the “Directors and Organisation” section of the 2022 Annual Report of the Company. An updated list of directors containing biographical information and identifying the independent non-executive directors is maintained on the website of the Company. The Company has also maintained an updated list of directors and their role and function on the websites of Hong Kong Exchanges and Clearing Limited (the “HKEx”) and the Company.

During the year, four Board meetings were held. Board meetings were held to approve the annual, interim and quarterly results of the Company; to consider the payment of final dividends and to approve the payment of interim dividends; to discuss the operational status and approve annual budget of the Company; to consider and approve the reports submitted, significant and connected transactions, the re-appointment of a non-executive director of the Company, the appointment of an independent non-executive director of the Company, certain policies of the Company (including Anti-Corruption Policy, Whistleblowing Policy, Revised Board Diversity Policy and Revised Shareholders’ Communication Policy) and Board Independence Evaluation Mechanism. Throughout the year, directors also participated in the consideration and approval of non-routine issues of the Company by way of circulated resolutions with supporting explanatory write-up. Senior management at all times answered the non-routine issues enquiries made by the Board.

All directors are given draft notice and agenda for all Board meetings and Board committees meetings for comments, consideration and inclusion of any matters for deliberation at the meetings.

The Board convenes Board meetings regularly. The date for holding each meeting will be determined in advance with a notice of not less than 14 days so that directors entitled to attend the meeting can spare time to attend in person and have sufficient time to include items that are in the agenda for discussion. To ensure that all directors have sufficient information for discussion, the meeting documents will be submitted to all directors three days before the meeting is convened.

All directors keep contact with the company secretary and can obtain the services provided by the company secretary so as to ensure compliance with the procedure of the Board meetings and all applicable laws, rules and regulations. In case of any changes in the governance and compliance laws, rules and regulations, the company secretary will release the latest information to the Board.

The company secretary is responsible for compiling and drafting the minutes of the Board and the Board committee meetings, and will send the first draft of the minutes within reasonable time after each meeting to the participated directors for comments. The minutes of the meetings are prepared with details of the decisions reached, any concerns raised and dissenting views expressed. All directors are entitled to inspect the minutes of the Board and the Board committee meetings. Directors can seek independent professional advice for performing their duties at the expense of the Company. If the subject under discussion at a Board meeting involves conflict of interests of substantial shareholders or directors and the Board considers that the conflict of interests is material, the matter would be dealt with by a physical meeting rather than a written resolution. The Board will ensure that there are sufficient independent directors participating in discussing about and voting on the relevant resolution. Those interested directors shall abstain from voting on the relevant resolution.

The Company has arranged directors’ and officers’ liability insurance in respect of any legal action against directors.

Directors at all times have full access to information of the Company. The Board is provided monthly operating information which contain the up-to-date performance and information of the Company. Directors can access information from senior management independently.

Other than non-executive directors, all executive directors are appointed on a full-time basis and have sufficient time to deal with the affairs of the Company. All directors are required to discharge their responsibilities as directors of the Company and their common law duties as directors. Not less than one-third of the Board is independent non-executive directors. The Board/its Nomination Committee will review the Board composition regularly to ensure that it has a balance of expertise, skills and experience appropriate for the requirements of the business of the Company. The Company will give an appropriate introduction about the Group’s businesses and operations and policies to each newly appointed director.

Directors have disclosed their number and nature of offices held in public companies or organisations and other significant commitment in their biographical information. They are also reminded to notify the Company in a timely manner and biannually confirm to the Company any change of such information. The Company reported the changes in its annual report and interim report.

As part of the continuous professional development programme, all directors of the Company namely Mr. Zhang Haipeng, Mr. Yan Jianguo, Mr. Chen Xiaofeng, Mr. Zhou Hancheng, Mr. Hung Cheung Shew, Mr. Adrian David Li Man Kiu, Dr. Raymond Leung Hai Ming, Mr. Lee Shing See and Ms. Wong Wai Ching read legal and regulatory updates and/or attended seminars arranged by the Company during the year of 2022. In addition, individual directors also participated in other seminars and/or read relevant materials relating to the roles, functions and duties of a listed company director, environmental, social and governance, and further enhancement of their professional developments. Directors had provided the company secretary with their training records for the year under review.

There is no family or other material relationships among members of the Board.

The Company is aware that effective communication can increase productivity and improve teamwork. The Company regularly convened meetings for the executive directors, senior management, middle management, worksites management and management of overseas subsidiaries (by video-conference). During the meetings, the relevant parties reported the Company’s overall work progress, delivered the Company’s strategy, reviewed the strength and weakness of the Company’s work-in-progress and provided sufficient time for the participants to raise questions and express their opinions, ensuring adequate communication between different levels of management.

Chairman and Chief Executive Officer

Chairman and chief executive officer are two key aspects of the management of the Company. Chairman performs the management of the Board and chief executive officer performs the day-to-day management of the business. Clear division of these responsibilities is in place to ensure balance of power and authority so as to avoid concentration of power on the same individual.

The chairman is responsible for leading the Board and ensures all directors are provided with appropriate and suffic i en t information before Board meetings so that the Board can operate effectively and perform its duties. The chairman promotes culture of openness and encourages directors to voice their views. The chairman also meets independent non - exe c ut i ve directors without the executive directors present and ensures good corporate governance practices and procedures of the Company.

The chief executive officer is responsible for the operations of the Group. The chief executive officer together with other executive directors jointly implement the policies adopted by the Board and are responsible to the Board for the overall operation and administration of the Group. The chief executive officer also works with senior management in deciding the Group’s risk level and risk appetite; developing risk management strategies and implementing appropriate action plans for managing and monitoring risks.

During the year, Mr. Yan Jianguo was the Chairman and Non-executive Director of the Company; and Mr. Zhang Haipeng was Executive Director and Chief Executive Officer of the Company.

On 24 February 2023, Mr. Yan Jianguo resigned as the Chairman and continued to act as Non-executive Director of the Company, Mr. Zhang Haipeng was appointed as the Chairman and ceased to be the Chief Executive Officer of the Company, and Mr. Wang Xiaoguang was appointed as Executive Director and Chief Executive Officer of the Company.

Non-executive Directors

Except Mr. Yan Jianguo and Ms. Wong Wai Ching who were not appointed for a specific term, all non-executive directors were appointed with a term of three years. Pursuant to the Articles of Association of the Company, all directors (including non-executive directors) appointed by the Board shall hold office only until the next following general meeting of the Company (in the case of filling a casual vacancy) or until the next following annual general meeting of the Company (in the case of an addition to the Board), and shall be eligible for re-election at that meeting. All directors shall be subject to retirement by rotation at least once every three years and the retiring director shall be eligible for re-election.

During the year, the Company has complied with Rules 3.10 and 3.10(A) of the Listing Rules. Non-executive directors possess appropriate professional qualifications and experience or appropriate accounting or relevant financial management expertise. All independent non-executive directors comply with the independence guideline under Rule 3.13 of the Listing Rules and have submitted annual confirmations of their independence to the Board pursuant to Rule 3.13 of the L i s t i n g Rules.

Mr. Adrian David Li Man Kiu, Dr. Raymond Leung Hai Ming and Mr. Lee Shing See served the Board for more than nine years. The Board considered that they are able to provide their independent judgments in respect of matters such as the Group’s strategy, policy and performance in Board and Board committee meetings, making significant contribution to the affairs of the Group and long service will not affect their exercise of independent judgement. They have the required integrity to exercise independent judgement and provide objective challenges to the management. There is also no evidence that length of tenure is having an adverse impact on their independence. The Board therefore considers that Mr. Adrian David Li Man Kiu, Dr. Raymond Leung Hai Ming and Mr. Lee Shing See remain independent, notwithstanding the length of their tenure.

The Board as well as the Nomination Committee have reviewed the independence of all independent non-executive directors and have concluded that all of them are independent within the definition of the Listing Rules.

During the year, the Company has established board independence evaluation mechanism which is designed to ensure a strong independent element on the Board and allows the Board to effectively exercise independent judgment to better safeguard shareholders’ interests.

Remuneration Committee

The Company has established a Remuneration Committee on 9 June 2005. The major responsibilities of the Remuneration Committee include approving the overall remuneration policy of the Group, reviewing and approving the remuneration of individual executive directors and senior management of the Company, and ensuring that no director participates in the discussion on his own remuneration. The Board has adopted written terms of reference for the Remuneration Committee, which defined the role, authority and function of the Remuneration Committee. The terms of reference are posted on the websites of the HKEx and the Company.

During the year, one Remuneration Committee meeting was held and the individual attendance of each director is set out below:

During the meeting, the Remuneration Committee reviewed and considered and made recommendation to the Board on the remuneration of a newly proposed independent non-executive director of the Company.

During the year, the remuneration policy and annual bonus policy of the Company, and the salary adjustment proposal of the executive directors and senior management of the Company had been reviewed and approved by the Remuneration Committee by way of circulated resolutions in writing.

The human resources department reviews the remuneration data of the market and formulates the remuneration policy of the Group and then proposes to the Remuneration Committee for consideration and approval. The remuneration of directors and senior management of the Company is determined with reference to the remuneration policy of the Group and based on individual skills, knowledge, performance and contribution, the overall performance of the Group, the prevailing economic environment and the market trend.

The remuneration payable to directors and members of senior management by band are set out in the notes to the consolidated financial statements of the Company’s 2022 Annual Report.

Nomination Committee

The Company has established a Nomination Committee on 20 March 2006. The major responsibilities of the Nomination Committee include reviewing the structure and the composition of the Board, and making recommendation to the Board on matters relating to directors’ nomination, appointment or re-appointment and succession on regular basis. The Board has adopted written terms of reference for the Nomination Committee, which defined the role, authority and function of the Nomination Committee. The terms of reference are posted on the websites of the HKEx and the Company.

During the year, two Nomination Committee meetings were held and the individual attendance of each director is set out below:

During the meetings, the Nomination Committee reviewed the structure, size and composition (including the skills, knowledge and experience) of the Board, assessed the independence of the independent non-executive directors, reviewed and considered and made recommendation to the Board on the re-election of the retiring Directors at the annual general meeting, the re-appointment of a non-executive director of the Company, the appointment of an independent non-executive director of the Company and the revised Board Diversity Policy of the Company.

The Board adopted a Board Diversity Policy on 14 August 2013 and a revised Board Diversity Policy on 25 October 2022 which sets out the approach to achieve diversity on the Board. The Company sees increasing diversity at the Board level as an essential element in supporting the attainment of its strategic objectives and its sustainable development. In designing the Board’s composition, Board diversity has been considered from a number of aspects, including but not limited to gender, age, educational background, professional experience, knowledge, cultural background and length of service. All Board appointments will be based on meritocracy, and candidates will be considered against objective criteria, having due regard for the benefits of diversity on the Board, supporting the gender diversity of the Board and setting the target for the gender ratio of the Board in a timely manner. The Board should ensure that any changes to the Board’s composition can be managed without undue disruption. The Board should include a balanced composition of executive and non-executive directors (including independent non-executive directors) so that there is a strong independent element on the Board, which can effectively exercise independent judgement. Non-executive directors should be of sufficient calibre and number for their views to carry weight. Nomination Committee will review Board Diversity Policy on an annual basis to ensure its effectiveness. The Board Diversity Policy is posted on the website of the Company.

The Board contains individuals who have diverse educational background, professional experience, knowledge and culture. The Board members possess Mainland China/Hong Kong/Macao construction and related industry experience, g l ob al market experience, other listed companies’ board roles experience, corporate executive experience, public administration experience, professional engineering experience, professional accounting experience, professional banking and finance experience. All these experiences can enhance the Board decision making capacity, improves effectiveness in dealing with changes and reduces likelihood of group thinking. All Board appointments are based on meritocracy.

In order to achieve gender diversity, the Company has appointed Ms. Wong Wai Ching as the independent non-executive director of the Company on 25 March 2022. The Company pays close attention to the objective of board diversity (including gender diversity) and ensures at least one director of a different gender in the Board. If the Nomination Committee deems it necessary in the future, it will further identify suitable female candidate to join the Board through various channels in due course.

Details on the gender ratio of the Group together with relevant data, please refer to the 2022 Sustainability Report of the Company which is posted on the websites of the HKEx and the Company.

As at 31 December 2022, the Board comprises 9 directors. Eight directors are male and one director is female. Two directors are between the age group of 41 to 50; three are under the age group of 51 to 60; and four are over 60. Three directors have served the Board below 5 years; two have served the Board between 5 and 14 years; and four have served the Board between 15 and 20 years.

The Nomination Committee strives to enhance the level of Board diversity and governance when refreshing and re n e w i n g Board membership. The Nomination Committee will continue to consider Board diversity and governance and identify suitable candidates based on merit, skill and experience and the development of the Group. The Board has also adopted a Director Nomination Policy which sets out the criteria and process in the nomination and appointment of directors and ensures that the Board has a balance of experience, knowledge and diversity of perspectives appropriate to the Company.

Corporate Governance Functions

The Board is responsible for performing the corporate governance duties of the Company. The Board has adopted written terms of reference for its corporate governance functions which include:

• to develop and review the Company’s policies and practices on corporate governance;
• to review and monitor the training and continuous professional development of directors and senior management;
• to review and monitor the Company’s policies and practices on compliance with legal and regulatory requirements;
• to develop, review and monitor the code of conduct and compliance manual (if any) applicable to employees and directors; and
• to review the Company’s compliance with the code and disclosure in the Corporate Governance Report.

The Company understands that corporate governance is an important part of sustainable development. It is committed to improving its governance standards and fully understands that good corporate governance is closely related to environmental, social and governance performance. The Group is led by the Board which is responsible for formulating the Group’s overall strategy to oversee business development, financial performance and governance effectiveness.

During the year, the Board reviewed the Company’s compliance with the Corporate Governance Code and disclosure in the Corporate Governance Report and considered the adoption of various policies.

The Board adopted a Whistleblowing Policy on 25 October 2022 which aims to enable the employees of the Group and those who deal with the Group to raise concerns, in confidence and anonymity, with the Company about possible improprieties in matters related to the Group, in order to help detect and deter misconduct or malpractice or unethical acts in the Group. The Company encourages reporting of concerns and actual or suspected misconduct or malpractice or unethical acts (e.g. corruption) by any employee of the Group and/or external parties in any matter related to the Group. The Audit Committee of the Company shall review regularly the Whistleblowing Policy to improve its effectiveness and employee confidence in the process.

The Board also adopted an Anti-corruption Policy on 25 October 2022. The Company takes a zero-tolerance approach towards all forms of bribery and corruption and is committed to observing and upholding high standards of business integrity, honesty, fairness, impartiality and transparency in all its business dealings at all times. The Company strictly prohibits any form of fraud or bribery, and is committed to prevention, deterrence, detection, reporting and investigation of a ll forms of fraud and bribery. The Company shall review regularly the Anti-corruption Policy to improve its effectiveness.

Audit Committee

The Company has established an Audit Committee on 1 June 2005. The major responsibilities of the Audit C omm i tt ee include reviewing and overseeing the financial information of the Company, reviewing the financial reporting system, reviewing the risk management and internal control systems of the Company, and reviewing the relationship between the Company and auditor. The Board has adopted written terms of reference for the Audit Committee, which defined the role, authority and function of the Audit Committee. The terms of reference are posted on the websites of the HKEx and the Company.

During the year, four Audit Committee meetings were held and the individual attendance of each director is set out below:

During the meetings, the Audit Committee reviewed and considered the Group’s audited accounts for the year ended 31 December 2021; the Audit Committee Report for the year ended 31 December 2021; the connected transactions report; the internal audit report; the Group’s 2022 unaudited first quarter results; the Group’s unaudited accounts for the six months ended 30 June 2022; the Group’s 2022 unaudited third quarter results and the audit services fees in respect of the financial year ended 31 December 2022. The external auditor, Ernst & Young, Hong Kong (“EY”), was invited to attend 2021 final results meeting and 2022 unaudited third quarter results meeting and discussed audit plan for 2022 Group results with the Audit Committee during the 2022 unaudited third quarter results meeting.

During the year, the Company conducted a review and considered that the Company maintained adequate qualified accountants to oversee its accounting and financial reporting function and other accounting related issues in accordance with the relevant laws, rules and regulations.

Auditor’s Remuneration

The Company’s external auditor is EY. For the financial year ended 31 December 2022, the fees paid or payable to EY and other firms of the worldwide network of EY in respect of services provided to the Group amounted to approximately HK$10,475,000, including audit services fee of the Group of approximately HK$9,227,000 and non-audit services fee of approximately HK$1,248,000. The non-audit fees included tax services and other services for ad hoc projects.

Sustainability Committee

The Company has established a Sustainability Committee on 25 March 2020. The major responsibilities of the Sustainability Committee include monitoring and reviewing the sustainability goals, priorities and policies, reviewing the Group’s risk appetite, tolerance and strategy, reviewing and assessing sustainability performance and risks of the Group, and considering and making recommendation to the Board on sustainability reporting and assurance. The Board has adopted written terms of reference for the Sustainability Committee, which defined the role, authority and function of the Sustainability Committee. The terms of reference are posted on the websites of the HKEx and the Company.

During the year, two Sustainability Committee meetings were held and the individual attendance of each director is set out below:

During the meetings, the Sustainability Committee considered and approved the appointments and fees of external independent consultants, considered and made recommendation to the Board on the 2021 Sustainability Report of the Company.

During the year, the framework of 2021 Sustainability Report of the Company had been reviewed and recommended for Board approval by the Sustainability Committee by way of circulated resolutions in writing.

Directors’ Securities Transactions

The Company has adopted a model code for securities transactions by directors and relevant employees (the “Securities Code”) on terms no less exacting than the required standard set out in the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 of the Listing Rules. Directors and relevant employees of the Company are required to comply with the Securities Code. Reminders are sent to directors and relevant employees that they should not deal in the shares of the Company during the “black-out-period” specified in the Securities Code and before publishing any inside information announcement. Directors and relevant employees are required to notify the Company and obtained a dated written acknowledgement before dealing in the securities of the Company. After making enquiries by the Company, all directors and relevant employees confirmed that they have complied with the Securities Code during the year.

Accountability and Audit

It is the responsibility of the Board to present a balanced, clear and comprehensible assessment of the Company’s performance, position and prospects.

The management provided sufficient explanation and information to the Board to enable the Board to make an informed assessment of the financial and other information put before the Board for approval.

The directors acknowledge that they are responsible for preparing accounts for each financial period which give a true and fair view of the state of affairs of the Group. In preparing the accounts for the year ended 31 December 2022, the directors have selected appropriate accounting policies and applied them consistently; made judgements and estimates that are prudent and reasonable; and prepared accounts on a going concern basis.

The reporting responsibilities of EY, the external auditor of the Company, are stated in the Independent Auditor’s Report of the 2022 Annual Report of the Company.

The Board presents a balanced, clear and understandable assessment on annual and interim reports, other inside information announcements and other financial disclosures required under the Listing Rules, and reports to regulators as well as to information required to be disclosed pursuant to statutory requirements. The Board confirmed that the Company has an effective process for financial reporting and Listing Rules compliance.

Company Secretary

The company secretary supports the chairman, Board and Board committees by ensuring good information flow and Board policies and procedures are followed. The company secretary is an employee of the Company and is appointed by the Board. The company secretary reports to the chairman and all directors may call upon him for advice and assistance at any time in respect of his duties.

During the year, the company secretary of the Company attended sufficient professional training as required under Rule 3.29 of the Listing Rules.

Risk Management and Internal Control

The Board is responsible for the Company’s risk management and internal control system. The Company reviewed the effectiveness of its risk management and internal control system and considered the system is effective and adequate. The Company ensures that the system can withstand changes in its operation and the external environment in respect of strategic risk, financial risk, operational risk, compliance risk and sustainability risk, and mitigate the Company’s risk exposure so as to safeguard the sh are h o l d er s ’ investment and the Company’s assets. Risk management and internal co n t r o l system are designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.

The Company recognises that risk management is the responsibility of all of our people. The Company has established an organisation structure with defined levels of responsibility which facilitates the Company to assign roles and responsibilities at strategic level and operational level of risk management clearly. It makes the Company’s process used to identify, assess and manage risks effectively. The Board is responsible for determining the business strategies and objectives of the Company, and evaluating and determining the nature and extent of risk it is willing to take in achieving the Company’s strategy and objective. The Board oversees management in the design, implementation and monitoring of the risk management and internal control system. Executive directors review the change in the nature and extent of the Company’s significant risks from time to time, and the Company’s ability to respond to change in its business and external environment. Senior management is responsible for evaluating, managing and reviewing potential risks. Ensuring the Company’s risks be managed properly, it communicates, consulates and provides guidance to business segment. Senior management is also responsible to track progress of mitigation plan of material risks. Business segment is responsible to identify, analyse and evaluate potential operational risk. It monitors and implements mitigating activity to minimise the operational risk.

The Company’s Risk Management Control Committee focuses on strategic risk, financial risk, market risk and operational risk of the Company. The Committee is chaired by the Chief Executive Officer and includes executive directors and the management from investment, operations, finance departments, etc.. The Committee aims to continually identify and strengthen the risk management of the Company, and build up a risk aware and control conscious culture throughout the Company. Departmental reports and periodical reports were submitted to the Risk Management Control Committee for review.

The Company’s Audit Department reviews the adequacy and effectiveness of the Company’s risk management and internal control system. The Audit Department is independent of all business segment and is directly responsible for chief executive officer so as to ensure the neutrality of control. It adopts a risk-based approach and control-based approach, operates on an on-going basis and covers all major operations of the Company on a rotational basis. It sets audit planning yearly, and focus on auditing business segments’ financial management, operation management and internal control. It assists business segment to implement risk management and better its system. The Audit Department reports and makes recommendation to chief executive officer if there is material system deficiency or control weakness identified. It records the results and reports to the Audit Committee.

Executive directors and senior management convene meetings periodically to evaluate and review potential risks. In respect of identified risks, they make agreed remedial action plan and prompt follow up to ensure that risks are properly managed and defects are mitigated. Each executive director provides updated information on change of business environment and external environment to senior management which enhances the risk control quality. Risk Management Control Committee and Audit Department perform independent risk evaluation continuously to enhance the risk management quality. Through the division of work and periodic meetings, the Company was informed of material risks which may affect the performance regularly.

The Audit Department presents at least one consolidated summary report to the Board annually. The consolidated summary report covers the business risk of the Company and any significant control failure or weakness identified during the year (including impact) . The Audit Department member attends Audit Committee meeting at least once a year; and reports i t s works during the year to the Audit Committee members.

The Company establishes a holistic risk management and internal control system. It requires each business segment to modify its own risk management and internal control system based on its local business environment. The Company requires each business segment to review and evaluate the effectiveness of the system on a continuous basis to ensure its effectiveness. The Audit Department performs on-going monitoring on each main business segment, and evaluates the procedure and action of its risk management and internal control system to enhance the quality and effectiveness.

During the year, the Audit Department reviewed and assessed systems on cost control and integrated management; operation flow; financial; contracting; work monitoring and control; and analyzed profitable and unprofitable factors. I t issues independent and objective internal audit report with recommendation to chief executive officer and relevant business segments to improve deficiencies. Corrective actions were taken on findings and no significant control failure which might affect shareholders’ interests was identified. In order to further improving and monitoring the quality of the Company’s risk management and internal control system, three subsidiaries have conducted evaluation during the year, which focused on the areas of investment special audits, financial revenue and expenditure and internal control audit. The Audit Department also performed economic responsibility audit on the former head of a PRC subsidiary and insurance business audit. The Audit Department also reviewed the Group’s continuing connected transactions for the year ended 31 December 2022 and confirmed that the transactions conducted in accordance with the pricing policies and framework agreements; and on normal commercial terms. A continuing connected transactions report was prepared by the Audit Department and reported to the Audit Committee.

The Company has an inside information disclosure policy to ensure potential inside information being captured and maintained confidentiality until disclosure and disseminated properly.

The Company considered that the risk management and internal control system has adequacy of resources, staff qualifications and experience, training programmes and budget of the Company’s accounting, internal audit and financial reporting function. The Company will continue to conduct a review of the effectiveness of its risk management and internal control system at least once a year. The review covers all material controls, including financial, operational and compliance controls.

Shareholders’ Rights

Convening of Extraordinary General Meeting on Requisition by Shareholders

The Board may whenever it thinks fit call extraordinary general meetings. Any one or more shareholders holding at the date of deposit of the requisition not less than one-tenth of the paid up capital of the Company carrying the right of voting at general meetings of the Company shall at all times have the right, by written requisition to the Board or the Secretary of the Company, to require an extraordinary general meeting to be called by the Board for the transaction of any business specified in such requisition; and such meeting shall be held within two months after the deposit of such requisition. If within 21 days of such deposit the Board fails to proceed to convene such meeting, the requisitionist(s) himself/herself (themselves) may do so in the same manner, and all reasonable expenses incurred by the requisitionist(s) as a result of the failure of the Board shall be reimbursed to the requisitionist(s) by the Company.

Procedures for Directing Shareholders’ Enquiries to the Board

The annual report and the Company’s website provide the contact details of the Company. Shareholders may at any time send their enquiries and concerns to the Board in writing. Shareholders may also make enquiries with the Board at the general meetings of the Company.

Procedures for Putting Forward Proposals at General Meetings by Shareholders

There are no provisions allowing shareholders to propose new resolutions at general meetings under the Cayman Islands Companies Laws or the Articles of Association of the Company. Shareholders who wish to propose a resolution may request the Company to convene a general meeting following the procedures set out in the preceding paragraph.

The procedures for appointment, election and removal of directors are set out in the website of the Company.

Communication with Shareholders

The Board has adopted a Shareholders’ Communication Policy on 30 March 2012 and a revised Shareholders’ Communication Policy on 25 October 2022 which sets out the various channels and platforms adopted by the Company to communicate with the shareholders. The Company believes that effective communication with its shareholders is essential for ensuring that shareholders are provided with timely access to important information about the Company, including its financial performance, strategic goals and plans, material developments, governance and risk profile, in order to enable shareholders to exercise their rights in an informed manner.

The Company has established various communication channels with shareholders. These include general meetings, annual report and interim report, notice, announcement and circular. In addition, the Company updates its website (www.csci.com.hk) from time to time to keep the shareholders updated information of the Company’s recent development. Investors’ presentations are also uploaded to the Company’s website for all stakeholders’ perusal. For any queries, shareholders may send their enquiries to Tricor Standard Limited, the branch share registrar of the Company in Hong Kong, by email at is-enquiries@hk.tricorglobal.com or to the Corporate Finance Department of the Company at csci.ir@cohl.com.

General meeting is a main channel of communication between directors and shareholders. During the year of 2022, the Company held two general meetings by electronic means where shareholders were allowed to raise questions through online meeting system, and the Board would answer questions in a timely manner after receiving them.

An AGM was held on 9 June 2022. The notice of meeting, the Company’s annual report and the circular containing information on the proposed resolutions were sent to shareholders more than 20 clear business days prior to the meeting. The chairman and members of the audit, remuneration, nomination and sustainability committees were available to answer questions from the shareholders at the meeting. At the meeting, separate resolution was proposed by the chairman of the meeting in respect of each substantially separate issue and voting on each resolution was conducted by poll. The results of the poll were posted on the websites of the HKEx and the Company on the same date of the meeting.

An EGM was held on 21 December 2022. The notice of meeting and the circular containing information on the proposed resolution was sent to shareholders more than 10 clear business days prior to the meeting. The chairman of the meeting and members of the independent board committee were available to answer questions from the shareholders at the meeting. At the meeting, the resolution was proposed by the chairman of the meeting and voting on resolution was conducted by poll. The result of the poll was posted on the websites of the HKEx and the Company on the same date of the meeting.

The Board considered that the implementation of the Shareholders’ Communication Policy is effective.

During the year, there was no change to the memorandum and articles of association of the Company.

Investor Relations

The Company has been striving to maintain high transparency and communications with shareholders and investors through diversified communication channels. The Company holds press conferences and analyst briefing sessions from time to time to provide the latest business information of the Company to investors. The website of the Company (www.csci.com. hk) contains the latest data and information of the Group so that shareholders, investors and the public can inspect the information about the Company in a timely manner.