Strengthening Corporate Governance
- Governance Structure
- Board Diversity
- Management of Connected Transactions
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Kunlun Energy has constructed a governance system centred on the Board of Directors* . In strict accordance with listing rules and the Articles of Association, the Company has developed
a governance team characterised by a wellbalanced structure and complementary professional expertise, effectively ensuring the regulated and efficient operation of corporate governance. As the highest decision-making
and leadership body, the Board* is responsible for approving material matters in the Company’s operations and development while exercising comprehensive oversight. Under the Board
*, four specialised committees have been established: the Remuneration Committee, Audit Committee, Nomination Committee, and Sustainability Committee. Each committee performs its duties
and maintains collaborative linkage within its delegated authority, forming a regulated and efficient governance mechanism that fully leverages its roles in professional support, oversight, and check-and-balance.
*To the extent permitted by applicable law in the
relevant jurisdictions, the personal liability of directors shall be limited; under
no circumstances shall the liability of directors arisingfrom fraud, malice, willful
misconduct, or gross negligence be exempted or limited.
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The average tenure of the Board* members is three years
When nominating and appointing members of the Board*, Kunlun Energy takes a comprehensive approach, thoroughly evaluating factors such as gender, age, professional qualifications, industry experience, and educational background to bring diverse perspectives
and expertise to the table, thereby safeguarding shareholder interests and ensuring the company’s long-term development. In addition, the company regularly reviews and monitors the implementation of diversity on
the Board*, providing comprehensive and professional guidance for the company’s strategic planning and business decisions while meeting the diverse needs of the business.
*To the extent permitted by applicable law in
the relevant jurisdictions, the personal liability of directors shall be
limited; under no circumstances shall the liability of directors arising from
fraud, malice, willful misconduct, or gross negligence be exempted or
limited.
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Kunlun Energy consistently adheres to the principles of integrity, fairness, and commercial terms. The Company strictly regulates every stage of connected transactions—from agreement signing and approval processes to cap management, information disclosure,
and internal control. A specialised working group has been established to systematically review and examine material connected transaction contracts and annual caps. Simultaneously, independent third-party financial
advisors are appointed to evaluate the rationality of these caps, followed by the timely release of announcements and circulars to guarantee full-process compliance.
Lawful and Compliant Corporate Governance
By strengthening top-level design, deepening corporate governance, enforcing compliance accountability, and fostering a compliance culture, the Company adopts a systematic approach to promote the deep integration of statutory compliance with internal
control and risk management. We effectively enhance our capabilities in risk identification, prevention, and mitigation, as well as compliance management, thereby comprehensively elevating the Company’s capacity for governing the
enterprise in accordance with the law. The company has established a compliance management system characterised by clear authorities and responsibilities and effective operation. In 2025, the Company maintained a strong compliance
standing in areas such as business ethics, health and safety, employment, the environment, money laundering and insider dealing, with no instances of non-compliance recorded.
The Company places particular
emphasis on strengthening the monitoring and control of major risks, establishing a comprehensive dynamic risk monitoring and early-warning mechanism, and implementing a quarterly quantitative risk analysis model alongside a quarterly
risk reporting framework. This enables a comprehensive analysis of trends in both internal and external risks, identifies key areas for risk monitoring, proposes response strategies and improvement measures, and promotes the deep
integration of risk management with business development, thereby providing effective support for business management and operational decision-making, including product and service development. The Company attaches great importance
to fostering a culture of risk management, providing regular risk management training to all non-executive directors and incorporating risk control principles into both induction and in-service training programmes for staff.
Upholding Business Ethics
Kunlun Energy consistently upholds the bottom line of business ethics, adhering to the principles of honesty, integrity, fairness, and impartiality in all business activities. The Company has established and improved compliance review mechanisms for anti-monopoly
and anti-unfair competition to maintain a fair and orderly market environment. The company has established a routine internal audit oversight mechanism and conducts comprehensive internal audits of all business units under its
jurisdiction annually. These audits focus on core aspects of business ethics—including anti-fraud, anti-monopoly, anti-corruption, and human rights—to strengthen audit oversight and use this oversight to drive the deepening of
targeted governance in key areas and the precise prevention of operational risks. In 2025, the company conducted 48 internal audits, achieving full coverage of all provincial-level subsidiaries.
- Business Ethics Supervision
- Fair Competition
- Whistleblowing Mechanism
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Kunlun Energy has established an anti-corruption working group led by the Chairman of the Board* , responsible for the overall deployment of business ethics and anti-corruption initiatives
across the Company, deliberating on material issues, and promoting the refinement of the anti-corruption institutional framework. In 2025, there were 0 concluded legal cases regarding corruption.
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The Company treats anti-monopoly management as a key component of the compliance system, embedding it into management workflows. We have built a robust barrier against anti-monopoly risks through multiple measures, including improving systems, refining
guidelines, standardising documents, strengthening risk alerts, conducting case-based warnings, and enhancing supervision, inspections, and accountability.
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The Company maintains a “zero tolerance” policy towards any conduct that violates business ethics. We continuously improve our whistleblowing mechanisms and strictly investigate and penalise all forms of non-compliance
and disciplinary violations.
Strictly Safeguarding Information Security
Kunlun Energy continuously strengthens the construction of the information security management system, building a fulllifecycle security protection system covering networks, systems, and data. By enhancing technical protection capabilities, establishing
routine security monitoring, and optimizing emergency response mechanisms, we have fully consolidated the foundation of information and network security and focused on improving overall information security protection capabilities.
Relying on the "Kunlun Huixiang+" online platform, we adopt a dual reminder mechanism of privacy policy pop-up notifications and secondary authorization in business scenarios to safeguard users' data rights. In addition, the company
regularly conducts emergency drills to comprehensively build a solid defense line for customer information security. The company conducts personal information compliance audits in accordance with the
Administrative Measures for Personal Information Protection
Compliance Audits and the
Technical Specifications for Data Security – Requirements for
Personal Information Protection
Compliance Audits (GB/T 46903-2025), and carries out data security (including customer privacy security) risk assessments in accordance with the Specifications
for Data Security Risk
Assessment in the Industrial Sector (YDT 6415-2025).Since 2025, in the course of utilising artificial intelligence, the company has strictly implemented a mechanism for controlling access to highly sensitive AI functions.
For sensitive intelligent functions—such as facial recognition and intelligent surveillance—which pose privacy and ethical risks, the company has defined application boundaries, specified applicable scenarios and restricted authorised
users. It has established a comprehensive supervision and management mechanism to strictly prevent the misuse of technology, privacy breaches and ethical risks, thereby reinforcing the security baseline for intelligent applications.
In 2025, Kunlun Energy did not use customer information for secondary purposes (residential gas customer information is strictly segregated and is not used for customer profiling, targeted marketing or sharing with third parties;
data from value-added service mini-programmes and the gas payment system are completely independent, with no data exchange between them).