Corporate Governance

Corporate Governance Report

Business Model and Development Strategies

The principal businesses of the Company and its subsidiaries (the “Group”) include investment holding, water resources, property investment and development, department store operation, hotel ownership, operation and management, investment in energy projects and road and bridge operation. The Group is committed to consolidating the operational development of its existing businesses and expanding its core businesses in order to generate continuous and steady investment returns for shareholders. Through optimising asset portfolio, strengthening capital management, enhancing management standard and corporate governance, further fortifying competitive strengths and enhancing the market influence of the Group, they stand to provide strong support for the enterprise’s long-term, steady and sustainable development.

In line with its strategic development plan, the Group will continue with its investments in water resources management, property investment and development as well as infrastructure segment in a proactive and prudent manner. The Group continues to consolidate its basic businesses such as untreated water, tap water and municipal sewage to maintain its leading position in the industry; actively expanded its value-added businesses such as intelligent water services to continuously improve its profitability; proactively expanded its business into high-end manufacturing industries such as high-end water treatment membranes and integrated equipment, as well as into high-value-added areas such as industrial wastewater; and explored the development of water economic industry chain projects in relation to the water resources of the water scene. The Group will fasten the pace of project acquisitions and development of new business in an effort to further expand its scale, while continuing to optimize its asset structure and facilitate further business integration.

Faced with the trend of globalization, the Group will continue to capitalize on Hong Kong’s status as an international financial centre, improve its capital utilization efficiency, strengthen its capital management capabilities and foster effective value enhancement of capital. Meanwhile, the Group will optimize its human resources operations and further improve the professionalism of its management. The Group will step up its efforts in strengthening corporate culture and enhance corporate core competencies.

Corporate Culture

In 2023, the Group proactively implemented the concepts of “Endeavour Oriented” and “Performance Oriented, Value Sharing”, combined with the goal of high-quality development, to promote refined management, and to encourage employees to be bold, to make progress and to pursue excellence. In addition, the Group abides by the highest standard of business ethics beyond complying with laws and regulations and maintains zero tolerance for corruption and bribery. The Group has set up reporting channels and carry out publicity activities so as to promote integrity, thus fostering an open and transparent enterprise culture. By upholding the highest standards of business ethics and integrity, the Group is able to foster an anti-corruption culture that advocates honest practices and speak up behaviour.

The Group is dedicated to embed a robust culture of compliance to ensure Listing Rule and regulatory compliance. In August 2023, the Company was awarded the GB/T 35770-2022 and ISO 37301:2021 Compliance Management System accreditation by SGS-CSTC Standards Technical Services Co., Ltd.

Corporate Governance Code

The Group recognizes the importance of achieving the highest standard of corporate governance consistent with the needs and requirements of its businesses and the best interest of all its stakeholders and is fully committed to doing so. It is also with these objectives in mind that the Group has applied the principles of the Corporate Governance Code (the “CG Code”) contained in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”).

In the opinion of the directors of the Company (the “Directors”), the Company had complied with the code provisions set out in the CG Code for the year ended 31 December 2023 and, where appropriate, the applicable recommended best practices of the CG Code, save as disclosed below:

Mr. Hou Wailin, the then chairman of the board of Directors (the “Board”) and the then chairman of the Nomination Committee was unable to attend the annual general meeting of the Company held on 16 June 2023 (the “2023 Annual General Meeting”) as required by Code Provision F.2.2. With the consent of the other Directors presented, Mr. Lin Tiejun, Vice Chairman of the Company, chaired the 2023 Annual General Meeting.

Directors’ Securities Transactions

The Company has adopted a code (the “Code”) on terms no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 to the Listing Rules as its own code of conduct for dealings in securities of the Company by the Directors. In response to specific enquiries made, all Directors confirmed that they had complied with the required standards of dealings as set out in the Code during the year.

Board of Directors

The Board, which is accountable to the shareholders of the Company, is responsible for the leadership and control of the Company and it oversees the Group’s businesses, strategic decisions and performances. The management is entrusted by the Board with the authority and responsibility for the day-to-day management of the Group and assumes full accountability to the Board for the operation of the Group. Major corporate matters that are specifically delegated by the Board to the management include the preparation of interim and annual reports and announcements for the Board’s approval before publication, execution of business strategies and initiatives adopted by the Board, implementation of adequate systems of internal controls and risk management procedures, and compliance with relevant statutory and regulatory requirements, rules and regulations. It is the responsibility of the Board to determine the appropriate corporate governance practices applicable to the Company’s circumstances and to ensure processes and procedures are in place to achieve the Company’s corporate governance objectives.

The Company has established internal policies (including but not limited to the Articles of Association, and Terms of References of the Audit Committee, Remuneration Committee and Nomination Committee) to ensure that the Board has access to independent views and opinions. These policies cover the Company’s procedures and selection criteria for the election and appointment of directors (including independent non-executive directors), the mechanism for directors to abstain from voting on relevant proposals considered by the Board, and the authority of the independent board committee to engage independent financial advisors or other professional consultants. The Company has reviewed the implementation and effectiveness of the aforesaid mechanisms and considers that the aforesaid mechanisms can ensure the independent views and opinions of the Board.

Board Composition

As at the date of this report, the Board comprises five Executive Directors, being Ms. Bai Tao, Mr. Lin Tiejun, Mr. Wen Yinheng, Mr. Tsang Hon Nam and Ms. Liang Yuanjuan, three Non-Executive Directors, being Mr. Cai Yong, Mr. Lan Runing and Mr. Feng Qingchun, and four Independent Non-Executive Directors, being Dr. Chan Cho Chak, John, Mr. Fung Daniel Richard, Dr. Cheng Mo Chi, Moses and Mr. Li Man Bun, Brian David.

At the board meeting of the Company held on 26 October 2023, the Board accepted the resignation of Mr. Hou Wailin as the Chairman and an Executive Director as he had reached his retirement age. At the said board meeting, the Board also approved the appointment of Ms. Bai Tao as the Chairman and an Executive Director. The aforementioned changes in Board composition were effective upon the conclusion of the said board meeting. Ms. Bai Tao confirmed that she had obtained the legal advice referred to in Rule 3.09D on 26 October 2023 and she understood her obligations as a Director of the Company.

During the year, the Non-Executive Directors (including the Independent Non-Executive Directors) provided the Company with a diverse range of expertise and a balance of skills, and brought independent judgments on issues pertaining to strategic direction, development, performance and risk management through their contribution at Board meetings and committee meetings. They also reviewed investment proposals as well as internal audit reports.

Against the background of an increasingly complex and volatile environment, the Company recognizes that effective risk management is crucial to its success. With their distinguished track record in the financial industry, considerable accounting and auditing experience or through chairing the audit and risk committee of other public listed companies, the Board has Non-Executive Directors (including the Independent Non-Executive Directors) who possess the requisite risk management expertise that contribute to the effective discharge of the Board’s duties in the oversight of the risk management and internal control systems of the Group.

Notwithstanding that certain Executive Directors and Non-Executive Directors of the Company occupied senior government level positions in Mainland China prior to joining the Group, all of them are no longer government officials or representatives.

Although less than half of our Board members are Independent Non-Executive Directors, four out of our existing twelve Directors are independent, representing one-third of Board composition. Our Independent Non-Executive Directors are highly accomplished individuals in their respective industries, fields and communities, possessing a wealth of expertise and experience. They provide constructive advice to the Company and contribute to effective decision-making of the Board. Their willingness to stay on the Board is clearly a vote of confidence on the Company.

The names of the Directors and their roles and functions are posted on the Company’s website at

Chairman and Managing Director

As at the date of this report, Ms. Bai Tao is the Chairman of the Board whilst Mr. Wen Yinheng is the Managing Director of the Company. The roles of the Chairman and the Managing Director are clearly defined and segregated to ensure independence and proper checks and balances.

On top of her executive responsibilities, the Chairman provides leadership to the Board and oversees its functioning to ensure that it acts in the best interests of the Group and that Board meetings are planned and conducted effectively. She is also responsible for setting the agenda for each Board meeting, taking into account, where appropriate, matters proposed by the Directors and the Company Secretary. With the support of other Executive Directors and the Company Secretary, the Chairman seeks to ensure that all Directors are properly briefed on issues arising at Board meetings and provided with adequate and accurate information in a timely manner. The Chairman promotes a culture of openness and actively encourages Directors to voice their opinion and be fully engaged in the Board’s affairs so as to contribute to the Board’s effective functioning. The Board, under the leadership of the Chairman, has adopted good corporate governance practices and procedures and taken appropriate steps to ensure effective communication with shareholders and other stakeholders as outlined in the latter part of this report.

Under the guidance and instructions of the Board, the Managing Director, leading the management of the Company, is accountable to the Board for the implementation of the Company’s strategies and the coordination of various business operations.

Appointment and Re-election of Directors

All Directors (including Executive Directors, Non-Executive Directors and Independent Non-Executive Directors) of the Company appointed to fill a casual vacancy or as an addition to the existing Board shall hold office only until the first general meeting after his or her appointment and shall be subject to retirement by rotation at least once every three year, in accordance with the articles of association of the Company and/or any applicable laws and regulations.

Independence of Independent Non-Executive Directors

The Company has complied with the requirements under Rules 3.10(1), 3.10(2) and 3.10A of the Listing Rules. The Company has received confirmation of independence from the four Independent Non-Executive Directors, namely Dr. Chan Cho Chak, John, Mr. Fung Daniel Richard, Dr. Cheng Mo Chi, Moses and Mr. Li Man Bun, Brian David in accordance with Rule 3.13 of the Listing Rules.

Although Dr. Cheng Mo Chi, Moses and Mr. Li Man Bun, Brian David are currently directors of three or more listed companies (including the Company), they are mostly assuming a non-executive role therein. As proven by their good attendance record at the meetings of the Board, Remuneration Committee, Nomination Committee, Audit Committee and general meetings, the Board considers that they have the capacity to devote sufficient time to fulfill their duties as Directors of the Company.

Although Dr. Chan Cho Chak, John, Mr. Fung Daniel Richard and Dr. Cheng Mo Chi, Moses have served on the Board of the Company for more than nine years, they have clearly demonstrated diligence, their willingness to exercise independent judgement and provide objective opinion to the management. There is no evidence that length of tenure is having any adverse impact on their independence. The Board therefore considers that Dr. Chan, Mr. Fung and Dr. Cheng remain independent, notwithstanding the length of their tenure.

The Board as well as the Nomination Committee have discussed and 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. Further, up to the date of this report, the Board is not aware of the occurrence of any events which would cause it to believe that the independence of any Independent Non-Executive Director has been impaired.

Contributions of Independent Non-Executive Directors

The Company strives to build an effective Board, whose capability is appropriate for the scale, complexity and strategic positioning of our business. With this in mind, the Independent Non-Executive Directors of the Company are highly regarded incumbents with the following expertise and experience present in one or more of them:

•  Significant board, financial and general management experience across a range of sectors and knowledge of corporate governance issues;

•  In-depthandup-to-dateknowledgeof the global markets and economic, political and regulatory development;

•  Considerableexperienceandqualificationinfinancialadministration,banking,legaland/orcompliance;

•  Broad experience in government organisations, public bodies and/or regulatory authorities;

•  Leadership role in large-scale companies or organizations;

•  Deep knowledge of commercial expertise;

•  Alert of corporate social responsibility issues.

They all have a wealth of experience in diverse fields and possess the requisite upright character, integrity and business insight for the proper discharge of their duties as independent non-executive directors. In pursuit of the Group’s objectives and business endeavors, by offering independent and constructive advice, they provide valuable contributions and insights to the Board and instill integrity into every aspect of our business which is also aligned to our values. Their considerable pool of knowledge, experience, skills and expertise are crucial to the Board’s deliberations. They have given the Board and the committees on which they serve the benefit of their diligence, skills, expertise and varied backgrounds and qualifications through active participation.

In addition, the Independent Non-Executive Directors act as custodian of the policies and practices that define and safeguard the reputation of the Company and are well placed to carry out their role. They have devoted time to satisfying themselves that our corporate governance practices and compliance policies accord with latest requirements. Their drive, enthusiasm and commitment, along with their proven ability to build and lead a strong Board, brings significant value to all stakeholders of the Group.

Relationship amongst Directors

The existing Board members do not have any financial, business, family or other material/relevant relationships with each other, thus ensuring strong independence across the Board.

Board Diversity Policy

The Board adopted a board diversity policy (the “Board Diversity Policy”) on 28 August 2013 which sets out the approach to achieve diversity on the Board.

The Company recognizes and embraces the benefits of having a diverse Board and perceives increasing diversity at Board level as an essential element in contributing to the attainment of the Company’s strategic objectives and sustainable development.

The Company seeks to promote Board diversity through the consideration of a number of factors, including but not limited to gender, age, cultural and educational background, professional experience, skills, knowledge and length of service. The Company also takes into consideration its own business model and specific needs from time to time. All Board appointments are based on meritocracy, and candidates are considered against objective criteria, having due regard to the benefits of diversity on the Board.

The Nomination Committee has set the measurable objectives based on five focused areas: gender, age, length of service, professional experience and skills and knowledge for the implementation of board diversity of the Company. The Nomination Committee reviews the Board Diversity Policy, as appropriate, to ensure its continued effectiveness from time to time.

As at the date of this report, the Board comprises twelve directors. Four of them are Independent Non-Executive Directors drawn from a diverse background, spanning business management, investment management, public administration, financial services, legal, compliance and accounting, thereby ensuring critical review and control of the management process. The Board has maintained a balanced composition in terms of gender, age, professional experience, skills and knowledge. It has performed effectively by providing sound judgment on strategic issues and effective oversight of and guidance to management. The biographies of the Directors as at the date of this report set out in pages 30 to 34 to this Annual Report demonstrate a diversity of skills, expertise, experience and qualifications.

The Board strived to maintain a balanced composition in terms of gender. Ms. Bai Tao has been acting as the Chairman and an Executive Director since 26 October 2023. Ms. Liang Yuanjuan has been acting as an Executive Director since 27 March 2021.

To ensure there is gender diversity on the Board, the Board has set a target that there must be at least one Director of different gender on the Board at all times, subject to our Directors (i) being satisfied with the competence and experience of the relevant candidates after a holistic review process based on reasonable criteria; and (ii) fulfilling their fiduciary duties to act in the best interest of our Company and the shareholders as a whole when deliberating on the appointment.

To develop a pipeline of potential successors of different genders to the Board, our Company will (i) ensure that there is emphasis on gender diversity when recruiting staff at all levels; and (ii) engage fair resources in training staff of different genders with the aim of promoting them to be members of senior management or the Board. Through this, the Company is committed to identifying suitable candidates of different genders both internally and externally in order to achieve the abovementioned target.

Having reviewed the implementation of the Board Diversity Policy and the structure, size and composition of the Board, the Nomination Committee of the Board considered that the requirements of the Board Diversity Policy had been met.

Board Meeting

The Board meets regularly to discuss the overall strategy as well as the operation and financial performance of the Company, and to review and approve the Company’s annual, interim and quarterly results. During the year, six Board meetings were held and attendance of each Director at the Board meetings is set out in the section headed “Board and Committees Meetings” of this report.

Regular Board meetings in each year are scheduled well in advance to facilitate maximum attendance of Directors. At least fourteen days’ notice of a Board meeting is normally given to all Directors who are provided with an opportunity to include matters for discussion in the agenda. The Company Secretary assists the Chairman in preparing the agenda for meetings to comply with all applicable rules and regulations. The agenda and the accompanying Board papers are normally sent to Directors at least three days before the intended date of a Board meeting. Draft minutes of each Board meeting are circulated to Directors for their comment before being tabled at the next Board meeting for approval. All minutes are kept by the Company Secretary and are open for inspection at reasonable time on reasonable notice by any Director.

According to the current Board practice, if a Director has a conflict of interest in a matter to be considered by the Board which the Board has determined to be material, the matter will be dealt with by the Board at a duly convened Board Meeting rather than by a written resolution. The articles of association of the Company also stipulate that save for the exceptions as provided therein, a Director shall abstain from voting and not be counted in the quorum at meetings for approving any transaction, contract or arrangement in which such Director or any of his/her associates (as defined in the Listing Rules) has a material interest. Every Director is entitled to have access to the Board papers and related materials as well as to the advice and services of the Company Secretary.

Directors’ Induction and Continuous Professional Development

Upon appointment to the Board, each new Director receives an induction package covering business operations, policy and procedures of the Company as well as the general, statutory and regulatory obligations of being a director to ensure that he/she is sufficiently aware of his/her responsibilities under the Listing Rules and other relevant legal and regulatory requirements.

The Directors are briefed on the amendments to or updates on the relevant laws, rules and regulations from time to time. In addition, the Company encourages the Directors to enrol in a wide range of professional development courses and seminars relating to the Listing Rules, Hong Kong ordinances and corporate governance practices so that they can continuously update and further improve their relevant knowledge and skills. Some Directors attended seminars and conferences organized by government authorities, professional bodies and industrial organizations in relation to corporate governance, updates on laws, rules and regulations, accounting, financial, management or other professional skills. The Company has organized Directors’ training titled “Bribery offences in Hong Kong; Loans, advances, prepayments and similar arrangements made by listed companies; and Implications of Recent Enforcement Bulletins for Listed Companies” on 29 August 2023 for the Directors. Training materials have also been provided to the Directors to develop and refresh their professional skills.

According to the records kept by the Company, the Directors attended the following trainings during the year ended 31 December 2023.

Name of Director



Seminars, Conferences,

Webcasts   and Training Materials

Bai Tao (appointed on 26 October 2023)


Lin Tiejun

Wen Yinheng

Tsang Hon Nam

Liang Yuanjuan

Cai Yong

Lan Runing

Feng Qingchun

Chan Cho Chak, John

Fung Daniel Richard

Cheng Mo Chi, Moses

Li Man Bun, Brian David

Hou Wailin (retired on 26 October 2023)

To ensure strong compliance culture at all levels of the Group and to foster good governance, directors and management of subsidiaries are encouraged to participate in continuous training to facilitate their understanding of their duties and obligations in respect of compliance with rules and regulations as well as environmental, social and corporate governance.

Board Committees

The Board has established various committees, including the Audit Committee, the Remuneration Committee and the Nomination Committee. For effective oversight and leadership, the Board receives updates/advice from the Board Committees from time to time. The terms of reference stipulating the respective authorities and responsibilities of these committees are available on the Company’s website.

Remuneration Committee

As at the date of this report, the Remuneration Committee comprises all four Independent Non-Executive Directors, being Dr. Chan Cho Chak, John, Mr. Fung Daniel Richard, Dr. Cheng Mo Chi, Moses and Mr. Li Man Bun, Brian David. Dr. Chan Cho Chak, John is the Chairman of the Remuneration Committee.

The remuneration of the Directors shall be determined by the members of the Company at the general meetings. Approval has been granted by the shareholders at the annual general meeting in 2023 to authorise the Board to fix the remuneration of the Directors.

The Remuneration Committee advises on policies in regard to the remuneration of Directors and senior management of the Company and is authorised by the Board to determine the remuneration packages for individual Executive Director and senior management. Remuneration of the Executive Directors and senior management shall be determined by the Remuneration Committee with reference to their duties, responsibilities and performance, and the results of the Group. No Director shall be involved in deciding his/her own remuneration.

The meeting of the Remuneration Committee shall be held at least once a year and when necessary. During the year ended 31 December 2023, the Remuneration Committee had held two meetings and had passed two written resolutions to approve the annual review of the remuneration packages and performance bonuses for the Executive Directors of the Company that came up for determination. The attendance of each member of the Remuneration Committee is set out in the section headed “Board and Committees Meetings” of this report.

Details of the amount of Directors’ remuneration for the year 2023 are set out in note 8 to the financial statements.

With a view to further aligning the interests of our senior management personnel with the long-term interest of the Company, incentive deferral and claw back mechanisms are in place for bonus or incentive to senior management personnel.

In response to the changes in the Listing Rules, the Company revised the terms of reference of the Remuneration Committee on 30 March 2023.

Nomination Committee

As at the date of this report, the Nomination Committee comprises Ms. Bai Tao, Chairman of the Board, and all four Independent Non-Executive Directors, being Dr. Chan Cho Chak, John, Mr. Fung Daniel Richard, Dr. Cheng Mo Chi, Moses and Mr. Li Man Bun, Brian David. Ms. Bai Tao is the Chairman of the Nomination Committee.

The Nomination Committee is responsible for, amongst other things, identifying individuals suitably qualified to become Board members, considering the re-appointment of Directors and succession planning for Directors and making recommendations to the Board in respect of the aforesaid matters.

The Board adopted the Directors’ nomination policy (the “Nomination Policy”) on 26 October 2018 to formally set out the criteria and process on the nomination and appointment of Directors. According to the Nomination Policy, the ultimate responsibility for selection and appointment of Directors rests with the entire Board or the shareholders in general meeting, as the case may be. The Board delegates the relevant screening and evaluation process to the Nomination Committee, which identifies suitably qualified Director candidates and recommends them to the Board. In assessing the suitability of a proposed candidate, the Nomination Committee takes into consideration the candidate’s character and integrity, qualifications, skills, knowledge, experiences relevant to the Company’s business and corporate strategy, his/her commitment to enhancing shareholder value and devoting sufficient time to effectively carry out their duties, fulfilment of the independence requirements as set out in the Listing Rules (for Independent Non-Executive Directors) and diversity on the Board. After reaching its decision, the Nomination Committee nominates relevant Director candidates to the Board for approval and appointment. As said above, all Directors appointed to fill a casual vacancy or as an addition to the existing Board shall hold office only until the first general meeting after his/her appointment and shall be eligible for re-election. The Board will make recommendation to shareholders in respect of the proposed re-election of Directors at general meeting.

The meeting of the Nomination Committee shall be held at least once a year and when necessary. During the year ended 31 December 2023, the Nomination Committee held two meetings to evaluate the structure, size and composition of the Board, to review the implementation of the Company’s Board Diversity Policy, to assess the independence of the Independent Non-Executive Directors and to make recommendations to the Board on the re-election and appointment of Directors.

The attendance of each member of the Nomination Committee is set out in the section headed “Board and Committees Meetings” of this report.

In response to the changes in the Listing Rules, the Company revised the terms of reference of the Nomination Committee on 30 March 2023.

Audit Committee

As at the date of this report, the Audit Committee comprises all four Independent Non-Executive Directors, being Dr. Chan Cho Chak, John, Mr. Fung Daniel Richard, Dr. Cheng Mo Chi, Moses and Mr. Li Man Bun, Brian David. Mr. Li Man Bun, Brian David is the Chairman of the Audit Committee.

The meetings of the Audit Committee shall be held at least twice a year or as and when necessary. During the year ended 31 December 2023, the Audit Committee had held four meetings to review, among other matters, the 2022 annual results, the 2023 quarterly and interim results of the Group before their submission to the Board as well as to monitor the integrity of such financial statements/financial information. The Audit Committee oversees matters concerning the external auditor including making recommendations to the Board regarding the appointment of the external auditor, reviewing the nature and scope of their audit work and approving their fees. In addition to the four meetings as aforesaid, the Audit Committee also had a private meeting with the external auditor to discuss any area of concern. The Audit Committee further ensures that the management has put in place effective risk management and internal control systems and maintains an overview of the Group’s risk assessment, control and management processes. It reviews the adequacy of resources, qualifications and experience of staff of the Group’s accounting, internal audit, financial reporting functions and related environmental, social and governance performance, and their training programmes and budget. In addition, it reviews the Group’s internal audit reports and monitors the effectiveness of the internal audit function.

The attendance of each member of the Audit Committee is set out in the section headed “Board and Committees meetings” of this report.

In response to the changes in the Listing Rules, the Company revised the terms of reference of the Audit Committee on 30 March 2023.

Board and Committees Meetings

The individual attendance records of each Director at the meetings of the Board, Remuneration Committee, Nomination Committee, Audit Committee and general meetings for the year ended 31 December 2023 are set out below:

Name of Director






Audit Committee

Annual General


Executive Directors

Bai Tao (appointed on 26 October 2023)



Lin Tiejun



Wen Yinheng



Tsang Hon Nam



Liang Yuanjuan



Non-Executive Directors

Cai Yong



Lan Runing



Feng Qingchun



Independent   Non-Executive Directors

Chan Cho Chak, John






Fung Daniel Richard






Cheng Mo Chi, Moses






Li Man Bun, Brian David






Accountability and Audit

Financial Reporting

The Board receives monthly management updates on the Group’s performance and financial position and is responsible for overseeing the preparation of financial statements for each financial year.

The Directors have acknowledged their responsibility in the preparation of all information and representations contained in the financial statements of the Company for the year ended 31 December 2023, which give a true and fair view of the financial position of the Group and of the results and cash flows for that financial year. In preparing the financial statements for the year ended 31 December 2023, the Board has selected appropriate accounting policies, applied them consistently in accordance with the Hong Kong Financial Reporting Standards and Hong Kong Accounting Standards which are pertinent to its operations and relevant to the financial statements, made judgments and estimates that are prudent and reasonable, and ensured the preparation of the financial statements on a going concern basis.

The Group endeavours to present a balanced, clear and comprehensible assessment of the Group’s performance, position and prospects. For the year under review, the annual, interim and quarterly results of the Company are announced in a timely manner within the limit of three months, two months and 45 days, respectively after the end of the relevant periods in accordance with the Listing Rules.

Auditors’ Remuneration

During the year under review, the remuneration paid/payable to the Company’s existing and former auditors, being KPMG and Ernst & Young, respectively, is set out as follows:

Services rendered by KPMGFee paid/payable
Audit of annual financial statements8,700
Agreed-upon procedures on 2023 quarterly results1,392
Review of interim results2,380
Tax related services130
Total (note)12,602


1. Another member firm of the KPMG global network was engaged by certain subsidiaries of the Company for (i) audit of financial statements; (ii) tax related services; and (iii) other non-assurance services. The relevant remuneration amounted to HK$6,378,000, HK$166,000 and HK$67,000, respectively.

2. The above analysis does not include the services engaged by GD Land. Please refer to the 2023 annual report of GD Land for the relevant details.

Risk Management and Internal Control

The Board is responsible for and is highly concerned with the Group’s risk management and internal control systems and reviews their effectiveness annually. In meeting its responsibility, the Board seeks to increase risk awareness across the Group’s business operations and has put in place policies and procedures, including parameters of authority delegation. Such systems are designed to prudently manage the Group’s risks within an acceptable risk profile and provide reasonable assurance against material misstatement or loss. The Board oversees management the implementation of the risk management and internal control systems as well as the review of the relevant financial, operational, compliance, risk management and internal control procedures.

The management under the supervision of the Board has established an ongoing process for identifying, evaluating and managing the significant risks faced by the Group and this process includes updating the risk management and internal control framework when there are changes in business, external environment or legal and regulatory guidelines.

The management assists the Board with the implementation of all relevant policies and procedures on risk and control by identifying and assessing the risks faced by the Group and designing, operating and monitoring suitable internal controls to mitigate and control these risks. The key processes that have been established in reviewing the adequacy and integrity of the risk management and internal control systems include the following: a defined management structure is maintained with specified limits of authority and control responsibilities, which is designed to (a) safeguard assets from inappropriate use; (b) maintain proper accounts; (c) ensure compliance with laws and regulations; and (d) identify, manage and mitigate key risks to the Group.

The Audit Committee reviews, among others, the financial controls, risk management and internal control systems of the Group and any significant internal control issues identified by the internal audit department, external auditor and management. It also conducts review of the internal audit functions with particular emphasis on the scope and quality of management’s on-going monitoring of risks and of the internal control systems and the work of the internal audit functions and independence of the internal audit department. The internal audit function, which is independent of the Group’s management team, assesses and monitors the effectiveness of the Group’s risk management and internal control systems and reports to the Audit Committee on a half-yearly basis. The function has unrestricted access to the company records that allows it to review all aspects of the Group’s control and governance process. The scope of work includes financial and operational review, recurring and unscheduled audit, fraud investigation, whistleblowing and compliance review. The opinion, as formulated by the function on the effectiveness of the risk management and internal control systems, together with the findings and implementation progress of the audit recommendations, would be reported to the Audit Committee by the internal audit department. During its annual review, the Audit Committee also considers the adequacy of resources, qualifications and experience of staff of the Group’s accounting, internal audit, financial reporting functions and related environmental, social and governance performance, and their training programmes and budgets.

Review of Risk Management and Internal Control Systems

The risk management and internal control framework is under constant review and is updated in response to changes in business, external environment or legal and regulatory requirements.

The Board has conducted a review of the effectiveness of the risk management (including environmental, social and governance risks) and internal control system and is satisfied that the risk management and internal control systems (including those for environmental, social and governance related risks) in place covering all material controls including financial, operational and compliance controls and risk management functions for the year under review and up to the date of issuance of this Annual Report and accounts are reasonably effective and adequate.

Policy on Inside Information

The Company has adopted policies on monitoring, reporting and disclosure of inside information (as defined in the Listing Rules). This ensures timely reporting and disclosure as well as fulfilment of the Group’s continuous disclosure obligations.

Company Secretary

The Company Secretary reports to the Chairman and the Managing Director. All members of the Board have access to the advice and service of the Company Secretary for the ongoing discharge of their duties and responsibilities.

Ms. Yang Na was appointed the Company Secretary of the Company on 28 March 2020. She is a full-time employee and is also the General Counsel and Chief Compliance Officer of the Company. She has day-to-day knowledge of the Company’s affairs, in particular, legal, compliance and risk management matters and is supporting the Board for ensuring that Board procedures are followed and Board activities are efficiently and effectively conducted. These objectives are achieved through adherence to proper Board processes and the timely preparation and dissemination of comprehensive Board meeting agendas and papers to Directors. She advises the Board on corporate governance matters, provides induction training on compliance matters including briefings on the general and specific responsibilities of directors under legal and regulatory requirements for newly appointed Directors.

For the year under review, Ms. Yang has confirmed that she has taken over 15 hours of relevant professional training.

Shareholders’ Rights

Shareholders convening an extraordinary general meeting

Shareholders are encouraged to attend all general meetings of the Company. Pursuant to the Hong Kong Companies Ordinance, shareholders of the Company holding not less than 5% of the total voting rights of all the members having a right to vote at general meeting may request the Directors to call a general meeting of the Company. The request must state the general nature of the business to be dealt with at the meeting and may include the text of a resolution that may properly be moved and is intended to be moved at the meeting. The request may be sent to the Company in hard copy form or in electronic form and must be authenticated by the person or persons making it. Directors of the Company must call a meeting within 21 days after the date on which they become subject to the requirement. The meeting being called must be held on a date not more than 28 days after the date of the notice convening the meeting. If the Directors fail to call the meeting, the shareholders who requested the meeting, or any of them representing more than one half of the total voting rights of all of them, may themselves call a general meeting. The meeting must be called for a date not more than three months after the date on which the Directors become subject to the requirement to call a meeting.

Details of the procedures for shareholders to propose a person for election as a Director of the Company are available on the Company’s website.

Shareholders’ Enquiries and Proposals

Shareholders should direct their enquiries about their shareholdings to the Company’s share registrar, Tricor Tengis Limited, at 17th Floor, Far East Finance Centre, 16 Harcourt Road, Hong Kong, or call its customer service hotline at (852) 2980 1333.

Shareholders’ enquiries and proposals can be made by mail, email or by phone. The contact details of the Company are set out in the subsection headed “IR Contact” under the “Investor Relations” section of the Company’s website. In addition, the Company is committed to maximizing the use of its website as a channel to provide updated information in a timely manner and to strengthen communications with both the public and the shareholders.

Investor Relations

Communication with Shareholders

The Company is committed to promoting and maintaining effective communication as a way to enhance long-term shareholder value and to maintain the trust and confidence of the Company’s shareholders, both individual and institutional (collectively, the “Shareholders”). The Company has adopted a communication policy for shareholders (the “Shareholders’ Communication Policy”) to ensure that Shareholders and the investment community are provided with appropriate and timely access to material information about the Company and its subsidiaries (including their financial performance, material developments, strategic goals and plans, governance and risk profile). The Shareholders’ Communication Policy sets out the Company’s framework to promote effective communication with its Shareholders so as to enable them to exercise their rights as shareholders in an informed manner, and to allow the investment community to engage actively with the Company, whilst at the same time ensuring that the Company fulfils its reporting obligations under the Listing Rules. The Shareholders’ Communication Policy is available on the website of the Company. The Company has established a range of communication channels between itself and its shareholders, investors and other stakeholders. The Company actively promotes investor relations and communication with the investment community throughout the year under review. The Company responds to requests for information and queries from the investment community including shareholders, analysts and the media through briefing meetings, announcements, conference calls and presentations.

The Board conducted a review of the implementation and effectiveness of the Shareholders’ Communication Policy. Having considered the multiple channels of communication in place, the Board is satisfied that the Shareholders’ Communication Policy has been properly implemented during 2023 and is effective. The Board is committed to providing clear and full information on the Company to shareholders through the publication of notices, announcements, circulars, interim and annual reports. Shareholders are encouraged to elect the environmentally responsible option of receiving corporate information on the Company via email notification and/ or accessing them on the Company’s website. Moreover, additional information on the Company is also available to shareholders and stakeholders through the “Investor Relations” page on the Company’s website.

In order to encourage Shareholders to elect the environmentally responsible option of receiving corporate information of the Company via email notification and/or accessing them on the Company’s website, the Company revised the Shareholders’ Communication Policy on 25 March 2024.

Constitutional Documents

During the year under review, no changes have been made to the constitutional documents of the Company. An up-to-date consolidated version of the Company’s articles of association is available on the Company’s website.

Dividend Policy

The Company aims to generate stable and sustainable returns for its Shareholders. In deciding whether to recommend the payment of any dividend and in determining the amount thereof, the Board will take into account the actual and expected financial performance and position of the Group (including operating income, operating cash flows, the level of debt to equity ratio and return on equity ratio), the Group’s investment, financing and business needs, any contractual restrictions imposed on the payment of dividends, the then prevailing general economic conditions and outlook, the Group’s past dividend payments, the dividend payout ratio of its peers and other factors that the Board may from time to time consider appropriate. The Company also aims to strike a balance between the sharing of the Company’s profit with the Shareholders and preserve sufficient funds for its development and operation.

The payment of dividend is subject to compliance with applicable laws and regulations including the laws of Hong Kong and the articles of association of the Company. There can be no assurance that dividends will be paid in any particular amount for any given period.

Environmental Policies and Performance

Environmental protection is one of the Group’s key focuses in fulfilling its corporate social responsibilities. The Government of the People’s Republic of China requires that all applicable businesses comply with relevant environmental laws and regulations. As the majority of its operations are in Mainland China, the Group strictly complies with the applicable laws and regulations. The Group has relevant environmental policies in place. With the announcement of the national 2060 carbon neutral target, the Group is fully aware of the associated impacts and expectations from stakeholders on its direction in becoming a more climatically and environmentally conscious business. In view of the ever-changing climate conditions, the Group recognises the importance of resilience of its business and adopting proactive measures to mitigate the impacts. Targeting its water resources and power generation business segments, the Group has conducted climate-related risk assessments and will disclose relevant information with reference to recognised disclosure standards in identifying, analysing and responding to the significant physical and transition risks in relation to its climate-prone operations.

To the extent necessary for an understanding of the development, performance or position of the Group’s business, management is not aware of any non-compliance with relevant laws and regulations that may have a significant impact on the Company during the year ended 31 December 2023 and up to the date of this report.

For more detailed information about the Company’s environmental policies and performance for this financial year, please refer to the Company’s 2023 environmental, social and governance report to be issued separately.

Environmental, Social and Governance Committee

An Environmental, Social and Governance Committee (“ESG Committee”) has been formed in 2018. Chaired by the Managing Director of the Company, the ESG Committee comprises Executive Directors, the Company Secretary and senior executives from key business and functional units.

The ESG Committee is responsible for monitoring and reporting to the Board on the implementation and effectiveness of the ESG management. It also prioritises the material ESG issues, review and monitors the achievement of environmental targets and evaluates the impacts of the Company’s ESG performances on its stakeholders, including employees, shareholders, customers, suppliers, business associates and local communities. The ESG Committee will consider emerging trends in laws, regulations and public debates about ESG matters, and ensure the Company is on a correct direction towards its sustainable business development. Moreover, the ESG Committee reports to the Board at least once a year to review and evaluate the Company’s ESG policies and performances.

Environmental, Social and Governance Management

To better set out the Group’s corporate values in relation to ESG responsibilities and management, a set of ESG policies have been developed and put in place governing issues ranging from biodiversity, water quality and supply, supply chain management, health and safety to ethical business operations. The policies serve as important guidelines to its partners by defining the business model and approaches the Group adopted to manage key ESG issues.

For full versions of the policies, please refer to the subsection headed “Sustainability and Social Responsibility” under the “Corporate Governance” section of the Company’s website.

Stakeholder Engagement and Materiality

The Group recognises that investors, customers, business partners, employees and the local community as its key stakeholders. Through various communication channels, the Group strives to achieve corporate sustainability by understanding and fulfilling their expectations. The stakeholder engagement exercises also help the Group better evaluate how different stakeholders are influenced by the Group’s ESG decisions and performances.

In 2023, the Group has carried out a materiality identification and assessment to identify issues that are the most relevant and have the most significant impact in two dimensions, the Group and its stakeholders. Considering the emerging attention from the government, industry, investors, and market, and with reference to the best practices implemented by regional and international industry peers, the Group constantly reviews and updates the results of the materiality assessment to reflect its latest business and sustainable development directions.

The paragraphs below only describe the Group’s key relationships with stakeholders to the extent necessary for an understanding of the development, performance and position of the Group’s business. For more detailed information, please refer to the Company’s 2023 environmental, social and governance report to be issued separately.


Employees are one of the Group’s most important assets. The Group has put in place stringent recruitment policies and procedures to ensure compliance with the rules and regulations on equal opportunity and anti-discrimination. The Group also provides training and career development opportunities to attract and retain talents, who are pivotal to continuous business development. A safe and healthy work environment is also maintained for employees. The Group has dedicated safety management committees on its operation that oversee health and safety matters.


Customer satisfaction with the Group’s products and services is key to its business success. The Group has dedicated customer service teams to reach out to customers, together with comprehensive customer feedback and complaint management mechanisms established in different business segments, securing the Group’s delivery of services and products of quality and standards. The Group also takes proactive actions in encouraging responsible customer behaviors. For example, the water resources segment promotes water conservation through various community activities to cultivate conscious consumption practices, thereby relieving the surging water stress.


All of the Group’s procurement processes are subject to open, fair and impartial bidding to select suitable suppliers. In addition, significant emphasis has been put on environmental management, industrial safety and anticorruption policies to ensure that suppliers comply with all relevant local laws and regulations. The Group has also incorporated green procurement policies into the hotel business segment, created a list of qualified suppliers and prioritized suppliers that provide environmentally friendly products.


By Order of the Board



Hong Kong, 25 March 2024