The Group has persisted in its core thought of “human resources and culture are the most precious wealth” and combines the establishment of a talent team with the creation of a corporate culture. Besides, by inheriting the “people first” principle, it has placed the emphasis of the human resources work on “cultivating and using people” so as to provide its staff with simple and harmonious human relationship, challenging jobs, vast development opportunities and benefits satisfactory to staff.

During the year, the Group’s efforts were recognised with the People Management Award. As at the end of 2007, the Group had a total of 4,468 employees (excluding staff of our joint-venture projects), of which, 2,171 persons were in Hong Kong, 1,402 of them were in the Mainland China, 336 were in Macau and 559 were working overseas.

STAFF RECRUITMENT PROGRAMME
The Group organised campus recruitment programmes in four universities in Hong Kong and seminars and on-the-spot recruitment programmes were well-received. The Group has also hired graduates with high caliber from well-known universities in Mainland China through its “Recruitment Programme for the Son of the Sea” and recruited outstanding staff from other establishments in an effective manner.

TRAINING OF STAFF AND SELF DEvELOPMENT
The Group provides the full support for its staff for lifelong learning and self value-adding. The Group has put aside capital to set up the “Staff Education Fund”. The Group will also hammer out training programmes according to the needs and interests of the staff, which cover the corporate system, management skills and occupational skills, quality assurance, team-building and communication skills. More than 1,257 employees took part in the courses during the period. In order to cope with the Group’s business development on an international scale, the Group commenced the training on “overseas business development strategy and operation” for all of the Group’s management staff and recruited professional instructors from overseas to conduct the “Modern Safety Management” courses, which will enhance the management concept of the management staff in a forward-looking manner and optimise the quality of management of the Group as a whole.

By means of its mature “Trainee Engineer Scheme A Training Programme” and its “Apprentice Training Scheme”, the Group provides opportunities for its staff for exposure in different capacities, which help to enhance the overall quality of its staff and to provide a reserve of capable people for its team. The Group has also made use of its advantage in overseas business to hammer out the “International Plan for Cultivating Talents”, with the system of exchange of people and rotation,
selection and dispatching of talented staff to learn in overseas regions so as to broaden their vision with the international exposure, thereby effecting the training of people for the international arena.

INCENTIvE MECHANISM
All the departments of the Group have to determine their business indicators and plans according to the annual financial planning and budget presented by the financial department as the key basis for their respective performance assessment. The Group fully recognises that the effectiveness of a system depends on its implementation, therefore the Group has committed to implementing the various incentive mechanisms, including “Contracting Responsibility of Sites” and the “System of Departmental Operation and Management Objectives and Responsibilities”. “Award of Outstanding Staff” recognised the staff working in Hong Kong, Macau and overseas with remarkable performance of the year.

The Group has also organised a myriad of exciting activities after work, including interest groups, sports games, photography, social gatherings and trips. The Group held the “2007 Lunar New Year’s Eve Festival” (2007迎春聯歡 晚會), “ China State Construction Fun Day for the Lu Ban Festival 2007” during the year to share the joy with the staff in recognition of their efforts and contributions to the Group. The Group also sent teams to take part in the badminton competition of “China Overseas Cup” (中海杯) held in Beijing and organised by its parent company. Such activities had enriched the leisure life of the staff and provided opportunities of communications and exchange for the colleagues and their families, and became an important part for team building and staff relationship.

For a successful construction project, other than cost control, safety, quality and progress, environmental protection is also an important ingredient. As a responsible contractor of our society, the Group must champion green management in construction planning in order to create a pleasant environment for our society. The Group has adopted a number of measures for environmental protection to minimise the level of pollution and the creation of waste materials the works may produce as well as to save natural resources, and also to improve our environmental management system. The innovative environmental initiatives of the Group applied in its construction works, namely the intelligent multi-working platforms, have won a number of honours throughout the years. The following environmental protection measures has been applied in the work sites as basic standards:

• automatic tyre cleansing machine – which cleans the mud and silt adhering to the tyres of vehicles going in and out of the construction site
• waste water treatment machine – which purifies the waste water produced by the construction site until it has reached the required standard before discharge or recycled
• cement recovery device – which saves the first 0.3 m3 of cement of each cement truck as a result of loss from the collapse test
• provisional sound barrier – which minimizes the impact of noise to the residents, schools and hospitals
• precast concrete floor plate – which accelerates the construction of hard floors and reduces dust and the precast components could be reused.

With the concerted efforts of the Group, the results were evident. In 2007, the Group received a number of awards including the “Considerate Contractors Site Awards”, “Outstanding Waste Management Performance Grand Awards”, “Wastewi$e Logos” and the “The Environmental Merit Award”by the Hong Kong Construction Association.

In 2007, the Group played an active role in the environmental protection activities of the community, such as organising the “China State Construction Environmental Protection Day” and “Explore Antarctica with Rebecca Lee” (與李樂詩一同探索南極), which were aimed at enhancing the awareness of environmental protection. And in order to achieve the dual purpose of caring for the community and championing environmental protection, the Group has been committed to create our environment jointly with the community nearly, examples are the trees plantation day for Jordan Valley, invitation of students from nearby schools at the construction site of Construction of Service Reservoirs near Choi Wan Road to create paintings on the site hoardings in order to make the environment more pleasant. The Group also hosted “The Competition of the Most Environmental-Friendly Construction Proposal” and the “Environmental Protection Workshops” with different themes, which were aimed to impart the latest environmental protection information to site workers and subcontractors.

The Group has also asked subcontractors to comply with environmental protection policies, and to hold regular meetings with subcontractors during the progress to discuss environmental protection related issues. Moreover, the Group has also organised training on environmental management systems for its staff and subcontractors to enhance their recognition of environmental protection and to promote the saving of resources. It has also encouraged staff to research on the means to save energy and resources in construction, thereby securing sustainable improvement and saving costs in the long run.

“Serve the Community” has always been the Group’s corporate objective. The Group has been committed to constructing various kinds of projects, which on the other hand it has been setting a good example as a corporate citizen. Trying its best
to fulfill the duties of a corporate citizen is an integral part of its core values. The Group takes the initiative to participate in all kinds of social activities and encourages its staff to do the same for the benefit of the needed and the community.

With the active participation of its staff, the Group provides strong support to all kinds of social activities such as the “Walks for Millions Hong Kong Island for 2007”, “MTR Race Walking 2007” and the “Hong Kong – Macau O! Day Challenge” and the Group has also organised a staff volunteer’s charity visit to the China Overseas Qinglong Hope School in Shaanxi Province. Such activities aim at helping the needed in the community and arouse the care of the community in its staff.

COMMUNITy CHEST WALKS FOR MILLIONS  2007, HONG KONG
The Group organised a team of love and care of over 300 to support the largest charity walk on Hong Kong Island in person – Community Chest Walks for Millions 2007.

COMMUNITy CHEST WALKS FOR MILLIONS 2007, MACAU
Adhering to the Group’s principle of being reciprocal to the community, staff members of Macau office participated in the Community Chest Walk for Millions in Macau.

MTR RACE WALKING 2007
A team of four representing the Group joined the “MTR Race Walking 2007” which is the “Health For Prosperity” campaign of the Health Info World of Hospital Authority in order to promote a healthy living.

HONG KONG — MACAU O! DAy CHALLENGE
The “Hong Kong — Macau O! Day Challenge” hosted by the Salvation Army is the first cross-city orientation charity
competition of Hong Kong. The Group’s team completed the event with their stamina, perseverance, wit and cooperation.

CHARITy vISIT TO CHINA OvERSEAS QINGLONG HOPE SCHOOL IN SHAANxI PROvINCE
Over 20 volunteers from the Group have participated in a charity visit to the China Overseas Qinglong Hope School in Shaanxi Province. The participants initiated a sponsorship campaign for helping local students with financial difficulties and improving their livelihood.

The Group has donated to a number of beneficiary organizations and charities including the Community Chest, Salvation Army, the Health InfoWorld of the Hospital Authority as well as other voluntary organisations.