Serving You with Heart Corporate Social Responsibility Report 2011

1. Serving You with Heart Corporate Social Responsibility Report 2011

2. Message from Vice Chairman and Chief Executive About this Report About Us Our CSR Approach CSR Highlights Responsibility to the Environment Responsibility to our Employees Responsibility to our Customers Responsibility to Society Your Feedback P.3~4 P.5~6 P.7~12 P.13~20 P.21~25 P.26~42 P.43~59 P.60~68 P.69~78 P.79

3. Message from Vice Chairman and Chief Executive It is with great pleasure that I present to you the third Corporate Social Responsibility (CSR) Report of Hong Yip Service Co. Ltd. For 44 years of property and facilities management business, we have continuously improved our services to ensure that we can always exceed the expectations of our customers and stay competitive as a leading company in the industry. Our commitment and efforts have resulted in healthy business growth and recognition from our customers, business partners and other stakeholders. With the expansion of our business activities and operations, we have also come to realise our impact on the environment and local communities and our responsibility to manage them. Furthermore, being a socially responsible company with a view to sustaining our business in the long term, we must integrate CSR into our business strategy. CSR is much more than running a business ethically and delivering top quality services to our customers. We are responsible to our employees for providing a safe and healthy work environment, work-life balance, rewarding careers, personal development opportunities, and competitive compensation and benefits. We are responsible to the environment for preventing pollution, making the best use of resources to minimise generation of waste, and educating people about environmental protection as all these can only be achieved by the concerted efforts of related parties. We are also responsible to local communities for serving as a caring neighbour, investing in building a harmonious community, and advocating good environmental practices.

4. This Report will tell you about how we approach the CSR challenge, what we have achieved so far and what we aim to achieve in the coming year. I am particularly proud of our achievements in energy saving and waste collected for recycling at our managed residential estates, and I would like to thank the dedication and enthusiasm of our employees and the occupants in this and other CSR initiatives. For our employees, we continue to create a more structured and transparent career and personal development path. With the establishment of our People Development Academy in 2007, we are committed to help our people to unleash their full potential. We will also continue to engage with our customers to find out about their needs and concerns as well as to educate them about living a healthy lifestyle and greening the environment. We have always been actively involved in community service projects, whether by sponsorship or by the contribution of our employee volunteer team. The experience has been rewarding for all involved and we look forward to embarking on more life enriching projects in partnership with community and charity groups in the future. I sincerely hope you will enjoy reading our CSR Report, which is a milestone in our long but promising CSR journey. Your feedback on our CSR performance and reporting is very important to us and I welcome you to write to us at hongyip@hongyip.com. Ir. Alkin Kwong, JP Vice Chairman and Chief Executive

5. About this Report Objective and Scope This Report aims to inform our stakeholders about the Corporate Social Responsibility (CSR) activities and performance of Hong Yip Service Co. Ltd for the calendar year 2011. The background information is provided on some of our CSR initiatives that have been in progress during 2011. This Report also covers our challenges and future objectives and targets in various CSR areas. The scope of this Report focuses on our managed properties and Head Office in Hong Kong. Approach to this Report Firstly, this Report gives an overview of who we are, what we do, our business philosophy and our CSR approach. A summary of CSR highlights is included to showcase our key CSR achievements in 2011. The Report then gives more details on our CSR activities and performance in four main sections: • Responsibility to the Environment • Responsibility to our Employees • Responsibility to our Customers • Responsibility to Society

6. Stakeholder Engagement We have limited the stakeholder engagement for our CSR Report to include the most important asset of our Company - our employees. Their participation has been invaluable to the development of this Report. We have a diverse list of stakeholders including our customers, contractors/suppliers, business partners, non-government organisations (NGOs), the local community, and regulatory authorities. We already engage with some of these stakeholders with regards to CSR issues, e.g., with our customers through our customer surveys and home visits, and with NGOs through our community projects.

7. About Us Hong Yip Service Company Ltd (“Hong Yip”) is a wholly owned subsidiary of Sun Hung Kai Properties Ltd (SHKP). With over 40 years of solid property management experience, we have established ourselves as one of the leading property and facilities management companies in Hong Kong. As of 31st December 2011, our management portfolio consists of more than 1,500 buildings with over 150,000 units, covering a total gross floor area of over 120 million square feet, of which 43% (based on gross floor area) relates to properties developed by Sun Hung Kai Properties Group. External parties such as Hong Kong Housing Authority, other property developers and owners’ organisations also appoint us to manage properties on their behalf. We provide a wide range of professional services including security and IT system, cleaning, landscaping, maintenance and repair, management of car park, pool and clubhouse, shuttle bus service, etc. We also offer many value-added home convenience services to our customers including free postage stamps delivery service, magazines and newspapers delivery, laundry, seasonal banquet offer, and home cleaning. Furthermore, our Quality Assurance Program helps to increase the property value and upgrade the living standard and environment of our customers.

8. Classification of Hong Yip's management portfolio in December 2011 (based on gross floor area) 2% 25% Residential Commercial Industrial Recreational Facilities 4% 69% For up to date information on our portfolio, visit our website: http://www.hongyip.com/eng/index.htm

9. Our Vision To become Hong Kong’s finest specialist property and facilities management company by creating ideal homes. Our Mission To deliver premium management services with supreme courtesy and to the highest standard. Our Values Customer focus. Striving for unrivalled service quality. Optimal value-for-money. The main ‘Service Excellence’ requirements of our employees are: Proactive Smiling Friendly Greetings Grooming

10. Our Commitment • Quality Policy • We will deliver premier services with ultimate • courtesy and manage every property to the • highest quality standards. • Occupational Safety and Health Policy • We will comply with occupational safety and • health legislations to ensure the safety and • health of our employees and related parties. • Environmental Policy • We will comply with environmental legislations and • support the government in its pursuance of • environmental protection in order to: • Prevent pollution; • Minimise generation of waste; and • Make the best use of resources. • Complaint Management Policy • To track, to follow up and to handle every complaint • with heart in order to exceed customer satisfaction.

11. We communicate our objectives, strategies, core values and performance • expectations to all employees by: • Conducting Annual Strategic Planning Meetings chaired by the Executive Director and attended by Senior Managers. • Distributing the Quality, Occupational Safety & Health and Environmental Policies Cards and Service Excellence Guidelines to all employees. • Providing induction training courses to new employees. • Conveying the objectives and strategic and implementation plans in Head Office Executive Meetings, Area Meetings and Site Meetings attended by Senior and Area Managers and Building Supervisors. • Encouraging open communication to all levels of the Company by distributing messages through email, intranet, etc. A handy pocket sized card distributed to all employees with a message on the Company’s commitment and policies from Alkin Kwong, Vice Chairman and Chief Executive.

12. Organisational Structure Hong Yip’s corporate departments include Building & Facilities Management, Technical Services, Information Technology, Contracts, Community & Public Relations, Human Resources & Administration, Finance & Accounts and Internal Audit. The Building & Facilities Management Department is divided into six different regions covering our managed properties on Hong Kong Island, Kowloon, and New Territories, and also our investment properties.

13. Our CSR Approach Quality Service ISO 9001:2008 certified for all the properties under our management. Occupational Safety and Health OHSAS 18001:2007 certified for four properties under our management. Environmental Management ISO 14001:2004 certifiedfor Head Office and four properties under our management. Complaint Management ISO 10002:2004 certified for Head Office and five properties under our management. Information Security Management System ISO 27001:2005 certified for Head Office We strongly believe that we have a corporate responsibility and ability to simultaneously pursue economic prosperity, environmental conservation and social equity. As a property and facilities management company, our business operations and activities are very much customer-focused. Therefore, we have included a ‘Responsibility to our Customers’ section to demonstrate our commitment and efforts in creating an ideal living/working environment for our customers.

14. Management Leadership Hong Yip’s Vice Chairman and Chief Executive, Ir. Alkin Kwong, leads the Company by formulating policies that set out our business development directions and ensuring that our objectives and targets in Quality, Occupational Safety & Health, Environmental and Complaint Management are met. He produces the Annual Strategic Plan each year which reviews past performance and details future objectives and targets for the Company. Managing Director, Mr. Mok Chi Hung, is the management representative of the Vice Chairman and Chief Executive and is responsible for overseeing and coordinating the operations of each department to ensure that our property management services are delivered cohesively and effectively. He also ensures employees’ awareness in occupational safety and health and the adequate provision of safety training and equipment. There are two Executive Directors, Mr. Edmund Kwok and Mr. Wong Kei On, who are responsible for ensuring the effective operation and continuous improvement of the overall property management system of Hong Yip. In particular, they focus on the compliance of the integrated management system with the international standards of ISO 9001, OHSAS 18001, ISO 14001, ISO 10002 and ISO27001, and render guidance on general management issues. They also lead our New Project Team which offers expert advice on property management requirements and services when the property is in the design, planning and construction stages, with a view to provide a quality living standard and an ideal living environment for our customers. Handover inspections are professionally conducted to ensure that services exceeding our customers’ expectations are provided upon occupancy.

15. Code of Ethics and Business Conduct To promote clear understanding of local regulations relating to ethical practices and to ensure strict adherence to ethical behaviour by our employees in daily operations, a set of Guidelines on Business Ethics based on local regulations and company requirements are distributed to our employees. Detailed explanation of the regulations is provided during employee induction and formal training courses. Our Employee Handbook also details employees’ responsibility to attain the highest ethical standards in their daily business dealings and in the working environment. In our purchasing activities, we have written procedures in place to ensure proper monitoring and execution of quotation and tendering processes in accordance with good business ethics. These measures are vital in providing a level-playing field for business activities and fostering a high level of trust among employees, subcontractors, suppliers and customers alike. Internal Audit Our Internal Audit department consists of over ten employees and their role is to evaluate, monitor and improve the effectiveness of the controls and processes across the Company. They perform financial review and operational review on issues including complaint management, customer satisfaction, food and hygiene standards, and cleaning services. They are also responsible for carrying out environmental and safety audits on Hong Yip’s operations. The Internal Audit department reports directly to the Chairman.

16. Environmental and Safety Management

17. Internal Committees Our Green Committee and Safety Committee are responsible for the continuous identification, evaluation and management of significant environmental and safety issues associated with Hong Yip’s operations. Each of the six regions and the Head Office are represented by the Committee members. The Green Committee focuses on implementing measures and activities to our staff and throughout our managed properties. In addition, the committee strives to upgrade the environmental performance of our Head Office and four properties under our management; New Tech Plaza, Wonderland Villas, The Parcville and Beneville, all of which have achieved ISO 14001 certification. The Committee members meet at least four times a year to establish environmental objectives and targets for the properties, formulate and implement environmental programmes, collect environmental data for monitoring and evaluation, and make suggestions for continuous improvement. The Committee is also a driving force for environmental education across the Company and promoting source separation of waste as well as carbon emissions at our managed properties. Whilst the Green Committee focuses on the operational performance of the ISO 14001 certified properties, the Environmental Strategy Committee, chaired by our Vice Chairman and Chief Executive, aims to drive the environmental agenda throughout all of Hong Yip’s operations and reports directly to SHKP. The Safety Committee meets regularly to discuss various issues including; the safety risks of work procedures and the necessary measures to mitigate them, the effectiveness of these measures, accidents occurrence and prevention, and promotional activities for work safety. We have appointed a Safety Officer and an Environmental Officer, who report directly to the Executive Director, Mr. Edmund Kwok.

18. Green Procurement Guidelines • We have a set of Green Procurement Guidelines that supports the use of environmentally- • friendly products and services in order to conserve natural resources, reduce waste and • protect the environment. There are four main elements to consider when choosing • products/services; • Avoidance of use of harmful substances during production • Application of the ‘3Rs’ of waste management: Reduce, Reuse, Recycle • Energy efficiency of the product/service • Compliance of the product/service with environmental legislation • Our Green Procurement Guidelines cover many different products and services, including • wood, paper and pulp products, stationery, plastic bags, detergents, furniture, electrical • appliances, printing services, lighting systems, and buildings repair and maintenance • services. We endeavour to apply the Guidelines as much as possible during our • procurement process, while considering practicality and economic factors.

19. Environmental and Safety Requirements for Contractors When contractors wish to apply for inclusion in Hong Yip’s approved vendors list, they have to acknowledge and sign Hong Yip’s Company Policy on ‘Environmental protection requirements’ and ‘Occupational safety and health requirements’. These include compliance with legal requirements, effective management of resource use, waste and wastewater, use of recycled materials, proper handling of hazardous substances, provision of Personal Protective Equipment (PPE) and safety procedures, etc. To maintain a high level of performance of our contractors, we carry out annual performance assessments on the approved vendors based on the ‘Environmental protection requirements’ and ‘Occupational safety and health requirements’. In Hong Yip’s standard tender document, specific clauses for ‘Environmental protection responsibilities’ and ‘Safety precautions’ are stipulated in the general terms and conditions. The contractors should ensure that their works are carried out in compliance with those clauses and requirements.

20. Did you know? • Every year, we organise a ‘Best Contractor Competition’ to give recognition to • contractors who demonstrate their commitment to the pursuit of service excellence. • Since 2008, we decided to further encourage contractors to improve their • environmental, health and safety performance by introducing the Environmental • Excellence Award and Health and Safety Excellence Award. Applicants are evaluated • based on their contractual performance on the following five categories: • Construction/service quality • Emergency response • Follow-up services • Health and safety performance • Environmental protection • A total of 51companies (including seven of our associate companies) entered the • competition in 2011. • Winners of the Environmental Excellence Award were Trustful Engineering & • Construction Co Ltd, T-Power Engineering Limited and Winson Cleaning Service • Company Limited • Winners of the Health and Safety Excellence Award were Lik On Security Limited, • Kone Elevator (HK) Ltd and Clare Environmental Services Ltd.

21. 5. CSR Highlights Below are highlights of our CSR achievements in 2011:

22. CSR Highlights Below are highlights of our CSR achievements in 2011: Responsibility to the Environment • Our energy saving programmes saved over Twenty Three million kWh of electricity since 2003, which is equivalent to over Sixteen Thousan tonnes of CO2e emission reduction. • Won 4 Golds and 11 Merits Awards in the 2010 Best Landscape Award – Private Development (organised by Leisure & Cultural Services Dept) • Obtained “99 Environmental Labels” in which included 59 Carbon “Less” Certificates and “The Most Carbon “Less” Certificates attained in the 4th Batch of 2010”Achieved a • 8.3% recycling rate at our managed residential estates and 6.5% at our managed commercial & industrial (C&I) buildings. (organised by Environmental Campaign Committee) • Eight Special Awards, Two Diamond Awards, Three Gold Awards, Six Silver Awards, 22 Bronze Awards and 95 Certificates of Merits were received in the ‘Source Separation of Domestic Waste’ Competition (organised by EPD). • Acquired Merit Award in the 2010 Hong Kong Awards for Environmental Excellence (Property Management Sector) • 116 individual buildings acquired Quality Water Recognition Scheme for Buildings Certificates (organsied by Water Supplies Dept) • In IAQ Certification, acquired 8 Excellent Class, 17 Good Class • Hong Kong Green Awards 2010 - Green Office Management Award organised by Green Council For more details on the awards and recognitions received by Hong Yip, please go to 26-42.

23. Responsibility to our Employees Continued to run our Mentorship Programme and Talent Development Programme in order to provide the required professional and personal development for our employees. Over 16,000 attendees participated our comprehensive and multi-disciplinary training. Based on the advice of our Health and Safety Committee, a number of employee benefit programmes were introduced to give due care to the occupational health of our employees. These programmes included free flu vaccination to all office staff and company-arranged preferential scheme for staff and their dependents on flu vaccination, health check and dental treatment. In order to arouse the awareness of occupational health and safety matters to our customers, we participated actively into the “Safe & Health Estate Accreditation Scheme”, which was organized by the Occupational Safety and Health Council. The result was very encouraging. Manhattan Hill, Woodland Crest & Park Central (Residential) achieved Excellent Performance while Tak Tin Estate granted Outstanding Performance. For more details on the awards and recognitions received by Hong Yip, please go to43-59.

24. Responsibility to our Customers • Continued with our Quality Assurance Program to upkeep and upgrade the hardware of our managed properties. As a result, 256 properties have passed the assessment in the 2nd phase of QAP Program. As a whole, 82.3% of our managed portfolio accomplished the renovations in phase II. • In the 2010 independent customer survey of Hong Yip’s property management services, 95% response of being satisfied or strongly satisfied. • The clubhouses at our managed residential estates, Manhattan Hill, Peak One, Harbour Place and Nobel Hill, were recommended to be awarded with the HKQAA Certification of Hygiene Control System. For more details on the awards and recognitions received by Hong Yip, please go to 60-68.

25. Responsibility to Society • 700 employees participated in our corporate volunteer service, contributing over nearly 10,000 service hours outside of work. • 152 employees received individual recognition and twenty-one volunteer teams received certifications from Social Welfare Department for their service hours. • Residents from 19 of our managed residential estates volunteered in community services for the elderly and received the ‘Caring Estate’ logo from the Social Welfare Department. In addition, five estates were awarded the ‘Leading Caring Estate’ logo. • A total of 43,000 used books were collected for World Vision to benefit underprivileged students in Mainland China. • Received the ERB Excellence Award for Employers in the 3rd and 4th session of the ERB Manpower Development Scheme (organised by the Employees Retraining Board). For more details on the awards and recognitions received by Hong Yip, please go to 69-78.

26. Responsibility to the Environment

27. Energy Management Through the success of our energy saving programmes, we have made accumulated electricity saving of over Twenty Three million kWh since 2003, which is equivalent to over Sixteen Thousand tonnes of CO2e emission reduction.

28. Total Electricity Consumption of Hong Yip’s Managed Properties

29. Total CO2e Emission* of Hong Yip's Managed Properties Note that this figure shows the indirect CO2e emission from electricity consumption based on the 2003 portfolio and includes public areas and facilities of our managed properties only (excludes Head Office). * CO2e emission = electricity consumption (kWh) x emission factor (kg CO2e /kWh). An emission factor of 0.7 kg CO2e /kWh is used based on the ‘Guidelines to Account for and Report on Greenhouse Gas Emissions and Removals for Buildings (Commercial, Residential or Institutional Purposes) in Hong Kong’ published by the Environmental Protection Department and the Electrical and Mechanical Services Department in July 2008.

30. Energy Saving Taskforce Our Energy Saving Taskforce was established in 2002 to monitor energy usage at our managed properties and also to manage and achieve our energy saving target. Our aim is to protect the environment, as well as bring benefits to the occupants such as reduced electricity costs and a more comfortable living environment. The objectives of the Taskforce include the following: • Perform energy saving audits to identify any Energy Management Opportunities (EMOs) • Organise energy saving training to frontline employees • Review and implement Hong Yip’s energy saving policy • Carry out research and development in energy saving products available on the market • Update on the latest legal and technical issues on energy saving Energy Saving Policy In order to control energy consumption, our Energy Saving Policy focuses on establishing energy saving processes in five main areas; energy audit, operational planning of the building services system, energy saving programme implementation and communication, investment in energy saving and promotion to the public. Energy saving products including VVVF drive for lift systems variable, frequency drive for fresh water pumps, and energy saving lighting systems are to be considered.

31. Hong Yip achieved 15 Awards including 4 Gold Awards in the Best Landscape Award for Private Property Development 2010 The Best Landscape Award for Private Property Development 2010 Award aims to sustain the betterment of the living environment in private property and to promote excellence in greening by outstanding landscape design and horticultural maintenance. Hong Yip won 15 honours including 4 gold awards in the Best Landscaped Award to recognize its determination to greener commitment. Hong Yip’s strong team attains the horticultural maintenance in the highest standards to fulfill customers’ need.

32. Carbon Audit Hong Yip emphasizes on carbon reduction. For example, photo-voltaic cells and a windmill installed in the Parcville to utilize natural resource. Other implementations under our management portfolio include: control lift operation during non-peak hours, keep air-conditioned at proper temperature in public area, install timer to switch on/off central air-conditioning, replace to T5 and install sensor of lighting in common area to further reduce carbon emission. Carbon “Less” Certificate by Environmental Campaign Committee Obtained “99 Environmental Labels” in which included 59 Carbon “Less” Certificates and “The Most Carbon “Less” Certificates attained in the 4th Batch of 2010”

33. Waste Management In 2011, over 9,310 tonnes of waste from our managed residential estates was sorted for recycling, achieving a 9.1% recycling rate . At our managed C&I buildings, over 2,307 tonnes of waste was sorted for recycling, which is equivalent to a 6.8% recycling rate. As a property management company, we have the responsibility to encourage and facilitate waste reduction, recycling and reuse because the growth of municipal solid waste from households, industry and commercial operations is putting enormous pressure on the landfills in Hong Kong. By providing effective waste management facilities and activities, we hope to raise awareness of the importance of environmental protection, enhance the recycling outcome and create a clean and healthy living environment for occupants. At one of our managed residential estates, La Costa, we have upgraded the design and durability of the domestic waste collection facilities to help maximise source separation. Plastic recycling bins changed to metallic ones which are neater and more durable. Tailor-made domestic waste collection boxes at back stairway of each floor to maximise capacity and improve cleanliness.

34. In 2010/11, 130 of our managed estates acquired commendation in the ‘Source Separation of Domestic Waste’ Competition organised by the Environmental Protection Department (EPD), with 4 Special Awards, 2 Diamond Awards, 1 Gold Award, 3 Bronze Awards, 19 Bronze Awards and 69 Certificates of Merits received. Among them, Welland Building, The Parcville, Shatin Garden, Po Fai Building and Tsuen Kam Centre received “Award for Enhancement” while The Parcville and Park Central received “Award for Promotion”. In addition, over hundreds of our C&I buildings registered for the ‘Source Separation of Commercial and Industrial Waste Programme’. We strive to participate and enhance the recycling outcome, as a result, we put in a great deal of effort to establish an organised system for handing waste. For example, at New Tech Plaza, we provide stacked recycling bins on each floor to collect common recyclable items and arrange for bulky items to be collected promptly and effectively at designated areas. The collected waste is taken to recyclers and reusable items such as clothes and garments will be donated to charities. In addition, we organise thematic recycling schemes at our managed C&I buildings on an annual basis to collect special or seasonal items such as books, clothes, mooncake boxes, etc.

35. Waste collected for recycling analysed by type（2011） 8000 7000 6000 5000 Domestic waste (tonnes) 4000 C&I waste (tonnes) 3000 2000 1000 0 Cartridges & CDs Aluminum Batteries Plastics Metal Waste Used clothes This figure shows that waste paper is the most common type of waste collected for recycling at both residential and C&I buildings.

36. Indoor Air Quality Indoor air quality (IAQ) affects the health and comfort of occupants. We have an IAQ Management Programme which involves benchmarking the IAQ management practices of Hong Yip. There are also internal guidelines for IAQ improvement in offices, public places and confined space where a ventilation system is installed. In 2011, our Head Office at World Tech Centre, Manhattan Hill, Noble Hill, and the clubhouses of Baycrest, Forest Hill and La Costa were certified with IAQ Excellent Class. Two commercial buildings, Sun Hung Kai Centre and Grand City Plaza, were also certified with IAQ Excellent Class. In addition, 17 buildings received IAQ Good Class under Hong Yip management. They are: Harbour Place, Bedford 28, Beacon Heights, 8 Waterloo Road, Scenic View, Billion Trade Centre, New Tech Plaza, Stelux House, International Trade Centre, Ginza Plaza, Tsuen Wan Plaza, Tsuen Kam Centre, Oscar by the Sea, Park Central (S.A.), Prima Villa, Woodland Crest and The Parcville.

37. “Quality Water Recognition Scheme for Buildings” – Water Supplies Department Hong Yip fully supports the Water Supplies Department’s Quality Water Recognition Scheme for Buildings since its launch in 2002. To ensure that our residents can enjoy good quality of water at the taps, Hong Yip strives to maintain plumbing systems of our managed properties properly. In 2011, 116 buildings acquired certificates, including 29 Gold Certificates, 8 Silver Certificates & 82 Blue Certificates.

38. Green Council–Hong Kong Green Awards 2010 The "Hong Kong Green Awards 2010" (HKGA 2010) is organized by Green Council with an aim to encourage corporations in Hong Kong to include environmental considerations in their operational and management processes, and present themselves as corporations that having high environment consciousness and social caring. The Hong Kong Green Awards 2010 is a golden opportunity to demonstrate social responsibilities of corporations contributing to the greening of our city throughout the years. Hong Yip won the Gold Award in the Green Office Management Award to recognize its remarkable achievement on implementing environmental management in offices. • Judging Criteria of the Green Office Management Award is in the followings: • Corporate Commitment and Leadership to the Establishment of Green Office • Management. • Environmental Achievement on Energy Conservation, Water Conservation, Waste • Management, Indoor Air Quality, Carbon Emission and Green Purchasing. • Environmental Training and Promotion.

39. Water Conservation Plant Irrigation System at Fung Tak Estate Making use of the natural water flow from the retaining wall and slopes near Fung Tak Estate, we have set up a simple but effective irrigation system that reuses the natural water for irrigating plants within the estate. The water is first collected in a water tank leading to a pressure pump and a water flow and diversion control system, which is used to activate the water sprinklers. Rainwater Recycling System at The Parcville For the purpose of reducing water consumption, an underground rainwater storage tank was installed at The Parcville. Rainwater and overflow from nearby rivers during heavy rain is collected via surface channels to the 800 m3 storage tank. The water is treated by a filtration system and delivered for irrigating plants and washing open areas within the estate. This rainwater recycling system also helps to delay and reduce the risk of flooding.

40. The Green Building Concept Our sustainable effort towards effective property management is demonstrated at the unique locality of Woodland Crest. The green building concept adopted at this 190,000 square feet development allows residents to enjoy the natural environment and a sense of real peace and tranquility. Around the estate, thousands of trees, including many old trees, have been conserved within beautifully landscaped gardens. Inside the estate, the versatile use of natural ventilation, spacious and well-designed interior, together with an efficient building management programme help to enhance the green living style of the estate. ‘Green’ car park An innovative environmental design was implemented at The Parcville car park which uses roof openings to increase the use of natural light and improve air flow and quality in the car park. As a result, operation of the ventilation system is reduced which conserves energy. Trees are planted at each of the openings to bring environmental and aesthetic benefits. In the 2008 & 2010 Hong Kong Awards for Environmental Excellence (Property Management Sector), The Parcville acquired Merit Award.

41. Environmental Performance at our Head Office The Head Office located at the Sun Hung Kai Centre and World Tech Centre. The main environmental concerns at the offices are waste management, energy and resource use and air quality control. Current practices include separating waste paper, aluminium, plastic, toners, cartridges and batteries for collection by our associate company, Nixon Cleaning Co. Ltd. We launched the electronic procurement system in 2007 at the SHKC to increase workflow efficiency and promote a paperless system. We also encourage contractors to use electronic means for submission of contractual documents in order to save paper and support our Environmental Policy. We consider the reusability of office equipment and stationery when making purchases and provide internal guidelines via memo to remind employees to save paper, switch off lights and PCs, etc. We have been installing T5 fluorescent tubes since 2006 at the SHKC and standalone light switches for individual office units since 2007. At the World Tech Centre, T5 fluorescent tubes were stalled during renovation and we executive air quality control four times a year. We also have a set of vehicle management guidelines that include environmental considerations during the operation and maintenance of company vehicles.

42. Environmental Performance of our Contractors We have certain procedures in place to promote a high level of environmental and safety performance among our contractors. Please refer to details under ‘Environmental and Safety Management’ in the ‘Our CSR Approach’ section of this Report. Did you know? Learning about environmental protection and taking part is fun and rewarding! Our employees took part in a variety of activities, including: • Ma On Shan Tree Planting Day • Slogan Design Competition • Pollution free Picnic Day • Key challenges ahead • More widespread implementation of energy saving initiatives to achieve our energy saving target set. • Continue to promote source separation of waste for recycling at our managed properties and improve our waste data collection system so that we can monitor and evaluate our waste management practices more effectively. • Educate individual owners and Owners’ Committees about the importance of good IAQ. Given that the IAQ certification scheme is voluntary, it is necessary to seek their acceptance for performing IAQ assessment to achieve certification and approval for the costs involved.

43. Responsibility to our Employees

44. As of 31st December, 2011, Hong Yip employed 6,900 people, of which 87% were full time employees. Attracting and retaining the best talent, helping our employees to reach their full potential, ensuring their well-being and health and safety at work are all essential elements to the growth and sustainability of our business Our Principles Employee Handbook Following the issuance of a comprehensive employee handbook for operational staff 2007, the one for general staff was introduced in 2008 in order to communicate the Company’s important messages such as vision, mission and values. It contains information on our integrated management system (IMS), employment terms and conditions, employee benefits, training and development, and relevant legislation and Company policies that every employee should adhere to when carrying out their duties. Equal Opportunity Upon the enactment of the Race Discrimination Ordinance in 2008, we have refined our Equal Opportunity Policy to assure that any employee or applicant for employment will not be discriminated against because of not only gender, pregnancy, disability, marital and family status, age or sexual orientation, but also race. We will not tolerate discrimination, harassment and offensive behaviour in the workplace as we believe all employees have the right to work in, and also the responsibility to create a pleasant and productive working environment.

45. We have employed 561 re-trained employees referred by social service organizations, which accounts for about 22 % of the Company’s new hires in 2011. We also partner with four local universities and five other tertiary institutions in offering work attachment programs (total 38 management trainees). In addition, we participated Pathfinding Pavilion of Breakthrough (total 13 apprentices) in which students can acquire work-based learning experience to prepare for their work upon graduation. Voice it out We encourage our employees to raise any work-related grievances and concerns they might have through various communication channels available: the managers in their departments, the Human Resources & Administration Department, the annual executive review meeting through their representative or directly to the Top Management including the Chairman. The Internal Audit department will investigate and report on the issues raised as appropriate. Our parent company, SHKP, provides the ‘Hearty Hotline’ service to all employees of Hong Yip and its subsidiary companies, including their immediate family members. The 24-hour service offers professional advice and guidance to help callers deal with their personal concerns and regain their happiness.

46. Training and Development Comprehensive and Multi-disciplinary Training We always strive to empower our employees to perform their daily tasks effectively and provide training programs to cater for their personal and career development. In 2011, we offered various types of training to meet individual learning and development needs. For frontline employees, we organised a wide range of classes such as VIP hospitality, crime prevention, customer service, telephone courtesy, emergency and complaints handling, etc. For office-based employees, we provided two mainstream courses for different levels of employees. One of them is the Supervisory Skills Training Programme which included topics like time management, delegation, professional presentation skills, leadership skills, etc. Another one is the Personal Effectiveness Training Programme covering topics like teambuilding, managing time, effective communication, etc. We also offered technical training such as fire prevention, firefighting, electrical wiring installation and precautionary measures in winter. 2010-2011Statistics on employee training (for in-house training programs) How many hours of training on average were given to Hong Yip’s employees in 2011? Employee categoryHours/employee 2011 2010 Frontline 25 25 Technical 50 50 Middle management upwards 51 50

47. Providing Mentorship • We launched the Mentorship Programme for frontline employees in March 2006 to achieve the following objectives: • To make each of our managed properties to become an individual training centre • To enable new employees and those requiring support to receive appropriate mentorship • To drive Hong Yip to become a leader in quality management The Programme runs in the following manner. Suitable employees working at supervisory level or above are nominated as mentors. They attend a full day of mentorship training before sitting for an examination, which they have to pass before being qualified as mentors. To ascertain the overall effectiveness of the Programme, spot-checks will be performed after a month of mentoring to ensure proper training records have been kept by both the mentors and mentees, and to assess the skills and knowledge of the mentees. With the full support of the concerned departments and the dedication of the participants, our target of matching one mentor to four employees are achieved continuously.

48. Mentor: The mentorship training and the certificate received on passing the examination both motivated me to become a good mentor. It is not easy to be a good mentor as a lot of patience is needed to teach the mentee how to deal with complaints and extra demands from residents. Overall, I have developed a deeper sense of responsibility in my daily work and gained recognition for my efforts. Mentee: Although there was no mentor available at the estate I was working in, the Area Manager took the initiative to arrange a mentor from another estate to help me settle into a new working environment. My mentor taught me many new skills so that in a very short time, I was able to deal with my daily tasks. I was a bit nervous when I was assessed after one month into the job, but it effectively showed whether my skills were up to standard. I am so glad that there is a mentorship programme within Hong Yip and I have benefited enormously from it.

49. Developing Talent Attracting, retaining and developing elites within Hong Yip and having a comprehensive succession management plan are difficult yet vital challenges that we have to deal with in the area of organisational management. Therefore, our Talent Development Programme aims to carefully select and develop managerial talent from within the Company to ensure leadership excellence and continuity. Employees are selected according to their performance, longevity, zeal, and managerial competence and potential. Talent Development Programme – progress in 2011 Who are the participants? From fourth-tier staff (Senior Administrative Officers) to Senior Managerial Staff How long is the Programme? About two years What’s involved? Peter Drucker’s Management Program, a series of e-learning programs, training by external consultants, submission of individual and group projects, teamwork training and sharing sessions. What’s the outcome? Develop personal determination, stamina and commitment. Improve communication, leadership and decision-making skills. Gain knowledge in effective team work.

50. Qualifications Framework (QF) Being the leader in property management industry , we shoulder the responsibility for further development of the professionalism in the industry and setting up the role model in this respect. As caring company, we continuously nurture talents and encourages staff to life-time learning. Echoing with Government’s introduction of QF, we submitted our internal courses for accreditation to Hong Kong Council for Accreditation of Academic and Vocational Qualifications (HKCAAVQ) in order to help our staff to get public recognized qualifications and articulate to further learning. Did you know? Being the first and only property management company in the industry to achieve accreditation of internal courses in the territory Internal Accredited Courses: • 《Module Certificate in Service Excellence (Level 2)》 • 《Module Certificate in Properties Management Workplace Mentor (Level 3)》 Recognition of Prior Learning(RPL): Did you know? The number of staff in our company who had successfully applied RPL under security and customer service category is the largest in the industry • Over 200 staff had successfully applied RPL with QF Level 3 or above • We assisted and sponsored our staff to become the first batch of company employee in the industry to attain RPL qualifications