Sustainability

Corporate Governance Practices

The board of directors of the Company (the “Board”) recognises that good corporate governance is essential to the success of the Company and its subsidiaries (the "Group") and enhances shareholders’ value. The Board is committed to maintain a high standard of business ethics, a healthy corporate culture and a good corporate governance practice.

The compliance of code provisions of Corporate Governance Code as set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) is disclosed in the corporate governance report contained in annual report of the Company.

Corporate strategy, business model and culture

The Group adheres to the core values of “Customer-oriented, Quality Assurance, Value Creation” and inherits the business concept of “Exercising Caution in Details and Implementation; Building a Strong Foundation to Seek Greater Success”, strictly abides by the industry standard, upholds the heart of dedication, consciously shoulders the corporate mission of “We Manage Happiness”, and strives for growth and continuous innovation. With the continuous enhancement of individuals’ values and the perfect release of team creative energy, the Group aims to developing into an international enterprise and becoming a new role model of “harmonious and win-win” with shareholders, employees and society in the new era. The Group will continuously move towards the goal of becoming a world-class comprehensive enterprise group integrating “Technology, Investment, Construction and Asset Operation”.

Adhering to the corporate spirit of “Integrity, Innovation, Transcendence, Win-win Solution” after more than 40 years of development, the Group has developed businesses in four major segments of “Chinese mainland, Hong Kong, Macau and Overseas”, implemented technology-empowered strategy and built a four-in-one business model integrating “Technology + Investment + Construction + Asset Operation” which fully utilized the advantages of the whole industrial chain and comprehensively promoted high-quality corporate development.

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 Board adopted Director Nomination Policy on 25 March 2020 which sets out the criteria and process in the nomination and appointment of directors and ensures that the Board has a balance of skills, experience and diversity of perspectives appropriate to the Company.

The Board also adopted Board Diversity Policy on 14 August 2013 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 selection of candidates will be based on a range of diversity factors.

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. The Board/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.

An updated list of directors containing biographical information and identifying the independent non-executive directors is published on the website of the Company. The Company has also published an updated list of directors and their roles and functions on the websites of Hong Kong Exchanges and Clearing Limited (“HKEx”) and the Company.

Directors have disclosed their number and nature of offices held in public companies or organisations and other significant commitment in their biographical information.

Notice of at least fourteen days is served for regular Board meetings and reasonable notice is given for all other Board meetings. The Chairman of the Board, assisted by the company secretary, is responsible for drawing up and approving the agenda for each Board meeting. Agendas and accompanying Board papers in sufficient details are circulated to all directors at least three days before the intended date of meetings so as to allow them to have sufficient time to prepare before meetings.

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.

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 sufficient 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-executive 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.

Non-executive Directors

All non-executive directors of the Company were not appointed for a specific term. 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 first annual general meeting of the Company after his/her appointment 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 retiring directors shall be eligible for re-election.

The Company established board independence evaluation mechanism on 25 October 2022 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.

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, and the Company has complied with Rules 3.10, 3.10A and 3.13A 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 maximum concurrent holding of directorships under Rule 3.12A of the Listing Rules and the independence guideline and annual confirmations of independence under Rule 3.13 of the Listing Rules.

Remuneration Committee

The Company 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/her 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 set out in the "Related Documents" section below.

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.

Nomination Committee

The Company established a Nomination Committee on 20 March 2006. The major responsibilities of the Nomination Committee include reviewing the structure, size and composition of the Board, developing and maintaining nomination and diversity policies 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 set out in the "Related Documents" section below.

The Nomination Committee strives to enhance the level of Board diversity and governance when refreshing and renewing 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 in accordance with Director Nomination Policy and Board Diversity Policy.

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 Corporate Governance 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.

With a view to maintaining good corporate governance, the Board has adopted various policies and has been overseeing their effectiveness.

The Board adopted inside information disclosure policy on 14 August 2013 to ensure potential inside information is being captured and maintained confidentiality until disclosure and disseminated properly. The Inside Information Disclosure Policy is set out in the "Related Documents" section below.

The Board adopted 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 Whistleblowing Policy is set out in the "Related Documents" section below.

The Board adopted 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 all forms of fraud and bribery. The Anti-corruption Policy is set out in the "Related Documents" section below.

Audit Committee

The Company has established an Audit Committee on 1 June 2005. The major responsibilities of the Audit Committee include reviewing the financial information of the Company, overseeing the financial reporting system and the risk management and internal control systems of the Company, and overseeing 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 set out in the "Related Documents" section below.

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 set out in the "Related Documents" section below.

Executive Committee

The Company established an Executive Committee on 25 April 2025. The major responsibilities of the Executive Committee include reviewing, approving and dealing with bank loans and facilities, debt financing matters, projects occurring in the ordinary course of business of the Company and any other matters authorized by the Board. The Board has adopted written terms of reference for the Executive Committee, which defined the role, authority and function of the Executive Committee.

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 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 "Related Documents" section below.

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.

Communication with Shareholders

The Board has adopted a Shareholders’ Communication Policy on 30 March 2012 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 Investor Services Limited, the branch share registrar of the Company in Hong Kong, by email at is-enquiries@vistra.com or to the Corporate Finance Department of the Company at csci.ir@cohl.com.

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 obtain the information about the Company in a timely manner.

Business Ethics

The Company insists on building a supply chain in probity with suppliers. The Company puts forward anti-corruption requirements for suppliers, requiring them to sign anti-corruption documents such as Integrity Cooperation Agreement upon supplier pool enrollment, which clearly stipulates the Company's business ethics principles and anti-corruption clauses, and urges suppliers to fulfill the corresponding guidelines, and at present, Integrity Cooperation Agreement covers 100% of suppliers with which it co-operates.

In addition, the Company conducts anti-corruption audits with supplier at key stages of cooperation, covering contract signing, payment and goods & services reception, and the Company also continuously promotes cooperation in probity to suppliers through the cooperation. If any violations to anti-corruption policy are identified during the audit process, the Company will immediately cease the cooperation with the supplier.

Compliance Training

In 2023, all levels of enterprises participated in compliance training organized by the State-owned Assets Supervision and Administration Commission of the State Council, China State Construction Engineering Corporation, China Overseas Holdings Limited and the Group, covering antitrust compliance, corporate overseas compliance, corporate intellectual property risk response, cross-border mergers and acquisitions and other topics, and organized a series of legal and compliance training. We conducted or participated in 27 compliance trainings throughout the year, with more than 5,000 participants; in addition, we organized 9,000 employees to sign compliance commitments.