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Corporate Social Responsibility Report 2007Corporate Social Responsibility Report 2007

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1. Message from Vice Chairman and Chief Executive2. About this Report3. About Us4. Our CSR Approach5. CSR Highlights6. Responsibility to the Environment7. Responsibility to our Employees8. Responsibility to our Customers9. Responsibility to Society10. CSR Objectives and Targets11. Summary of Key Statistics12. Verification Statement13. Your Feedback

P.3~4P.5~6P.7~12P.13~20P.21~25P.26~40P.41~56P.57~67P.68~81P.82~86P.87~88P.89~91P.92

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1. Message from Vice Chairman and Chief Executive

It is with great pleasure that I present to you the first Corporate Social Responsibility (CSR) Report of Hong Yip Service Co. Ltd. In the 40 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.

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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 first 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 KwongVice Chairman and Chief Executive

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2. About this ReportObjective and ScopeThis 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 2007. Since this is our first CSR Report, background information is provided on some of our CSR initiatives that have been in progress prior to 2007. 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 ReportFirstly, 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 2007. 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

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Stakeholder Engagement

We have limited the stakeholder engagement for our first 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. We endeavour to undertake a more comprehensive stakeholder engagement for inclusion in our next CSR Report, in which this Report will serve as a basis for development.

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3. About Us

Hong Yip Service Company Ltd (“Hong Yip”) is a wholly owned subsidiary of Sun Hung Kai Properties Ltd (SHKP). With 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 2007, our management portfolio consists of more than 1,350 buildings with over 147,000 units, covering a total gross floor area of over 115 million square feet, of which 44% (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 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.

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Classification of Hong Yip's management portfolio in December 2007(based on gross floor area)

67%5%

27%

1%

ResidentialCommercialIndustrialRecreational Facilities

For up to date information on our portfolio, visit our website: http://www.hongyip.com/eng/index.htm

* Information of our management portfolio as at 8 December 2007.

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Our Vision“To be Hong Kong’s best property and facilities management

company creating ideal homes for our customers”

Our Mission“To deliver premier service with ultimate courtesy,

managing every property to the highest standard of quality”

Our Values“Customer focus, striving for the best,

quality service and best value”

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Quality PolicyWe will deliver premier service with supreme courtesy and manage to the highest quality standards.

Occupational Safety and Health PolicyWe will comply with occupational safety and health legislations to ensure the safety and health of our employees and related parties.

Our Commitment

Environmental PolicyWe will comply with environmental legislations andsupport 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 PolicyTo track, to follow up and to handle every complaintwith heart in order to exceed customer satisfaction.

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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.

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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.

Senior Management

Contracts InternalAudit

Community & Public

Relations

Building &Facilities

Management

Technical Services

HumanResources

&Administration

Finance &Accounts

InformationTechnology

Hong Kong Island

Kowloon

InvestmentProperties

NewTerritories (I)

NewTerritories (II)

NewTerritories (III)

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4. Our CSR Approach

Quality Service ISO 9001:2000 certified for all the properties under our management.

Occupational Safety and Health OHSAS 18001:1999 certified for four properties under our management.

Environmental Management ISO 14001:2004 certified for Head Office and four properties under our management.

Complaint Management ISO 10002:2004 certified for Head Office and five properties under our management.

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.

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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 and ISO 10002, 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.

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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.

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Environmental and Safety Management

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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 the environmental performance of our Head Office and four properties under our management; New Tech Plaza, Wonderland Villas, The Parcvilleand 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 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.

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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.

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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.

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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. In 2007, 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 26 companies (including five of our associate companies) entered the competition in 2007.Winners of the Environmental Excellence Award were Nixon Cleaning Co. Ltd and Hitachi Elevator Engineering Co. (HK) Ltd.Winners of the Health and Safety Excellence Award were Superpower Pumping Engineering Co. Ltd and Hitachi Elevator Engineering Co. (HK) Ltd.

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5. CSR 5. CSR HighlightsHighlightsBelow are highlights of our CSR achievements in 2007:

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Responsibility to the Environment

• Our energy saving programmes saved over 15 million kWh of electricity since 2003, which is equivalent to over 10,000 tonnes of CO2e emission reduction.

• Scenery Court was the Champion estate in the Big Percentage Cuts Award of the Power Smart Competition 2007 (organised by Friends of the Earth).

• Three Silver Awards, two Bronze Awards and four Merit Awards received at the 2nd Hong Kong Energy Efficiency Awards (organised by EMSD).

• Achieved a 7.4% recycling rate at our managed residential estates and 6.5% at our managed commercial & industrial (C&I) buildings.

• Two Gold Awards, 17 Bronze Awards and 42 Certificates of Merits were received in the ‘Source Separation of Domestic Waste’ Competition (organised by EPD).

• 100 of our managed C&I buildings registered for the ‘Source Separation of Commercial and Industrial Waste Programme’.

• Achieved 22 ‘Gold Wastewi$e’ logos and 10 ‘Wastewi$e’logos at our managed properties.

For details of this section, please go to page 26 to page 40.

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Responsibility to our Employees

• Continued to run our Mentorship Programme and Talent Development Programmein order to provide the required professional and personal development for our employees.

• Over 8,500 employees attended our comprehensive and multi-disciplinary training.• Established our own People Development Academy.• Over 250 slogans were submitted by our employees in the Patrol Safety Slogan

Competition 2007.• Having considered the suggestions made by employees during the 2007 ‘Employee

Opinion Survey’ exercise, we increased the number of annual leave days for siteoffice employees, introduced study leave, increased compassionate leave for frontline staff, and improved our medical benefits.

For details of this section, please go to page 41 to page 56.

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Responsibility to our Customers

• Continued with our Quality Assurance Program to upkeep and upgrade the hardware of our managed properties. As a result, 25 of the assured C&I buildings and 23 of the assured residential estates showed an average increase in market value of 28% and 34% respectively.

• In the 2007 independent customer survey of Hong Yip’s property management services, a total of 51 out of the 54 categories received over 95% response of being satisfied or strongly satisfied.

• The clubhouses at our managed residential estates, Sham Wan Tower and Nobel Hill, were recommended to be awarded with the HKQAA Certification of Hygiene Control System.

For details of this section, please go to page 57 to page 67.

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Responsibility to Society

• 600 employees participated in our corporate volunteer service, contributing over 8,300 service hours outside of work.

• 129 employees received individual recognition and eight volunteer teams received certifications from Social Welfare Department for their service hours.

• Our employees raised over HK$53,000 at the ‘Walks for Millions’ 2007 (organisedby The Community Chest).

• Residents from 23 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, four estates were awarded the ‘Leading Caring Estate’ logo.

• A total of 52,338 used books were collected for World Vision to benefit underprivileged students in Mainland China.

• Set up a Social Enterprise Project with Hong Kong Association for Democracy and People’s Livelihoods to create job opportunities for the non-skilled and low-income workers in Sham Shui Po.

• Received the Platinum Award of the Employers Gold Star Award (organised by Employees Retraining Board).

For details of this section, please go to page 68 to page 88.

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6. Responsibility to the Environment

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Energy Management

Through the success of our energy saving programmes, we have made accumulated electricity saving of over 15 million kWh since 2003, which is equivalent to over 10,000 tonnes of CO2e emission reduction.

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Note that this figure shows the electricity consumption based on the 2003 portfolio and includes public areas and facilities of our managed properties only (excludes Head Office).

Total Electricity Consumption of Hong Yip's Managed Properties

122.0

126.0

130.0

134.0

138.0

142.0

2003 2004 2005 2006 2007

Year

kWh (million)

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Total CO2e Emission* of Hong Yip's Managed Properties

84,000

88,000

92,000

96,000

100,000

2003 2004 2005 2006 2007

Year

tonnes

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.

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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 at all six regions 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, frequency drive for fresh water pumps, and energy saving lighting systems are to be considered.

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Power Smart Competition 2007 – Friends of the EarthBig Percentage Cuts Award (Property Management Group)

Scenery Court, one of our managed residential estates, became the Champion in the Big Percentage Cuts Award of the Power Smart Competition 2007 organised by Friends of the Earth. Comparing the three months of June to August in 2007 and 2006, an average of 40% electricity saving was achieved. We have been monitoring the energy use at the estate since 2002 with the following focus areas to reduce energy usage/wastage and increase energy efficiency;

• Daily property management tasks – e.g., general housekeeping, monitoring time periods for switching on/off lighting and air-conditioning, trapping cooled air, using sun blinds, etc.

• Daily building facilities management tasks – e.g., effective maintenance of the air-conditioning, lighting, water pump and fire prevention systems

• Technical improvements – e.g., switching to energy saving lights• Promote the benefits of energy saving to Owners’ Committee

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The 2nd Hong Kong Energy Efficiency Awards – Electrical and Mechanical Services Department (EMSD)

One of our managed commercial buildings and eight of our managed residential estates received main awards in the EMSD’s 2nd Hong Kong Energy Efficiency Awards. In total,three Silver Awards, two Bronze Awards and four Merit Awards were received. In addition, Hong Yat Court won the Pioneer Award: Special Award for Outstanding Achievement. At one of the Silver Award winning commercial buildings, Ginza Plaza, an annual electricity saving of 7.6% (in kWh) was achieved between the year 2006 and 2007. Apart from formulating and implementing energy saving measures tailored to the site, the main challenge was to gain support from the occupants and our employees to adopt and sustain energy saving practices. In response, we provided relevant training for our frontline employees and energy saving bulletins and activities for the occupants.

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Waste Management

In 2007, over 7,400 tonnes of waste from our managed residential estates was sorted for recycling, achieving a 7.4% recycling rate. Since 2003, the amount of waste sorted for recycling has increased by 48% in total or by 20% per residential unit. At our managed C&I buildings, over 1,800 tonnes of waste was sorted for recycling, which is equivalent to a 6.5% 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.

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In 2007, over 60 of our managed estates acquired commendation in the ‘Source Separation of Domestic Waste’ Competition organised by the Environmental Protection Department (EPD), with two Gold Awards, 17 Bronze Awards and 42 Certificates of Merits received. Among them, Welland Building and Fortune Garden also won the Highest Recyclables Quantity Award and Ming Nga Court won the Lowest Waste Disposal Quantity Award. In addition, 100 of our C&I buildings registered for the ‘Source Separation of Commercial and Industrial Waste Programme’ launched by the EPD in October 2007. To encourage participation and enhance the recycling outcome, 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.

We also take part in the Wastewi$eScheme organised by the EPD to help Hong Kong businesses reduce wastegenerated on their premises or through their services and products. So far, 22 ‘Gold Wastewi$e’ logosand 10 ‘Wastewi$e’ logos have been awarded to our managed properties.

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Waste collected for recycling analysed by type (2007)

0

1000

2000

3000

4000

5000

6000

7000

Wastepaper

Usedclothes

Plastics Aluminiumcans

Metal Batteries Cartridges& CDs

Domestic waste (tonnes)C&I waste (tonnes)

This figure shows that waste paper is the most common type of waste collected for recycling at both residential and C&I buildings (amounting to 89% and 76% by weight respectively of total waste collected for recycling).

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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 2006/07, our Head Office and the clubhouses of Baycrest and Forest Hill were certified with IAQ Excellent Class. Two commercial buildings, Sun Hung Kai Centre and Stelux House, were certified with IAQ Excellent Class and Good Class respectively.

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Water ConservationPlant Irrigation System at Fung Tak EstateMaking 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 ParcvilleFor 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.

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‘Green’ car parkAn 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.

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. Woodland Crest won the ‘Merit in Living Quality’ in the Green Building Award 2006.

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Environmental Performance at our Head Office

We consider the reusability of office equipment and stationery when making purchases and use posters to remind employees to save paper, switch off lights and PCs, etc. We have been installing T5 fluorescent tubes since 2006 and standalone light switches for individual office units since 2007. To maintain good air quality within the office, cleaning of the ventilation system was performed four times and general maintenance was performed twice during 2007. We also have a set of vehicle management guidelines that include environmental considerations during the operation and maintenance of company vehicles.

The Head Office occupies the 5/F and 26/F of the Sun Hung Kai Centre. The main environmental concerns at the office 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 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.

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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.

• ‘Sustainable Development of Long Valley’ site visit organised by The Conservancy Association

• Visit to Ngong Ping and the sewage treatment plant supported by the Drainage Services Department

• Visit to Lions Nature Education Centre in Sai Kung• Green Power Hike 2007 to raise funds for environmental

education at local schools• ‘Green driving’ seminar

Did you know?Learning about environmental protection and taking part is fun and rewarding! Our employees took part in a variety of activities, including:

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.

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7. Responsibility to our Employees

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As of December 2007, Hong Yip employed 6,203 people, of which 97% 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.

Employee HandbookIn 2007, we issued a comprehensive employee handbook, which is made available to all new employees at operative level,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 daily work.

Equal OpportunityOur Equal Opportunity Policy states that any employee or applicant for employment will not be discriminated against because of gender, pregnancy, disability, marital and family status, race, age or sexual orientation. 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.

Our Principles

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We have employed 713 re-trained employees referred by social service organisations, which accounts for about 30% of the Company’s new hires in 2007. We also partner with four local universities and five other tertiary institutions in offering work attachment programs (e.g., the Vocational Training Council in the Youth Work Experience and Training Scheme) through 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 complaints and concerns they might have through various communication channels available: the managers in their department, the Human Resources & Administration department or directly to the Chairman, in which case the Internal Audit department will investigate and report on the issues raised.Our parent company, SHKP, provides the ‘Hearty Hotline’ service to all employees of Group and 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.

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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 2007, we offered many new types of training to meet individual learning and development needs. For frontline employees, we organised a wide range of classes such as customer service, professional communication, complaints and emergency handling. For office-based employees, we introduced classes on professional telephone manner, business Putonghua, coaching skills, and personal effectiveness. We also offered technical training such as fire prevention and firefighting, electrical wiring skills, and the management of our IMS.

2006-2007 Statistics on employee training(for in-house training programs)

2007 2006

Types of training 40 16

No. of sessions 255 218

No. of employees attended

8,567 7,270

How many hours of training on average were given to Hong Yip’s employees in 2007?Employee category Hours/employeeFrontline 20Technical 30Middle management upwards 47

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Providing Mentorship

We launched the Mentorship Programme for frontline employees in March 2006 with the following objectives:

• Each of our managed properties to become an individual training centre• New employees and those requiring support to receive appropriate mentorship• To drive Hong Yip to become a leader in quality management

Suitable employees working at supervisory level or above are nominated to become 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 are 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. We had set a target of matching one mentor to five mentees by the end of 2008. With the full support of the concerned departments and the dedication of the participants, this target was achieved towards the end of 2007, one year ahead of target.

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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”.

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”.

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”.

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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 2007Who are the participants? Senior Administrative OfficersHow long is the Programme? About one yearWhat’s involved? A centre for personal development, a three-day Outward Bound course, a series of e-learning programs, training by external consultants, submission of individual and group projects, teamwork and sharing.What’s the outcome? Develop personal determination, stamina and commitment. Improve communication, leadership and decision-making skills. Gain knowledge in effective team work.

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Our own People Development Academy

In December 2007, we established the People Development Academy to provide a company-wide management framework to align our knowledge, skills and experience with our long term business development objectives. Several important factors led to the birth of the Academy:

• Demands and expectations of property and facilities management from our customers are rising

• A more systematic approach towards human capital management is needed for the growth of the Company’s business and to tie in with the Qualification Framework being advocated by the Government

• Retaining talent has become a real challenge given the fierce ‘war for talent’ in the real estate industry in Hong Kong, in the past, present and the foreseeable future

• Hong Yip already has a well-established training system and a wide range of comprehensive training programs in place

We believe that the Academy will create an environment where our people are encouraged to continuously learn and develop in order to realise their full potential, maximiseproductivity, fulfill our business objectives and strengthen our corporate image. Apart from providing training courses and seminars internally, we are also planning to offer diploma/certificate programmes in property and facilities management through partnering with external organisations such as the Vocational Training Council.

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Developing and managing our employee talent is fundamental to our success. The People Development Academy upholds ‘Proactive, Dynamic, Learning, Experience’as core values with the following objectives:

• Cultivate first class property management personnel who can contribute to the long term development of Hong Yip

• Train up professional instructors internally to take up teaching tasks for the development of employees in various aspects

• Be the forerunner in the industry to offer industry-recognised approved programmesin property management

• Develop a learning organisation through the most optimum use of existing training resources

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Occupational Health and Safety

Work hours lost due to accidents at work are mainly related to slip, trip or fall, and sprains when frontline employees are carrying out patrolling duties. To address this, we offer relevant safety training and find different ways to raise awareness amongst our employees.

Training and AwarenessTo enhance our employees’ knowledge in occupational health and safety and to ensure a healthy working environment for our employees, we organise an Occupational Health and Safety Seminar annually with guest speakers from the Occupational Safety and Health Council and other government, statutory and professional bodies. Over 250 employees across the Company attended the seminar in 2007.

We also offer a variety of training programmes related to health and safety management including:

• The health and safety responsibilities of property and facilities management

• Managing the health and safety of our contractors• Guidelines on work safety including risk assessment,

working at height, confined space, dangerous substances, safety of electricity use, welding procedure, fire prevention, manual handling, personal protective equipment, etc.

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Patrol Safety Poster Competition 2007

We organised a poster competition for our employees to promote the importance of safety when patrolling. A total of 256 slogans were submitted and the following were chosen as winning slogans:

The winning layout will be used in the making of health and safety posters in 2008, which will be distributed across our managed properties.

Gold Silver Bronze

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Safety Improvements

Installation of Fall Protection SystemAt Mei Chung Court, The Seacrest, we introduced a horizontal lifeline system for workers to prevent fall from height while carrying out cleaning work on the roof of covered walkways, building façades and canopies. The system installed follows the EN795 Class ‘C’ standard and is entirely made of stainless steel, comprising of a horizontal lifeline, rope stretchers and full-body safety harness. The wire rope goes through intermediate supports and workers are able to hook and unhook at any location along the horizontal lifeline.

Enhancement of Safe Use of LadderFor any work carried out at a height of over two metres, a safety working platform is used as first priority. To provide safe access, a fibre glass or aluminium ladder equipped with locked hinges is used when necessary instead of a traditional wooden ladder.

Installation of Reverse-hinge and Iron-angle for Main Entrance Metal GateMany accidents occur at industrial and residential properties due to the dislocation or damage of hinges of the main entrance metal gates. In response, we advise the installation of reverse-hinge and iron-angle for the gates.

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We carry out ergonomics assessment, raise awareness and training programmes annually to help create a safe, comfortable and aesthetic work environment for our employees. The aim is to increase our employee productivity and performance and reduce the frequency and severity of work-related injuries. The areas we assess include materials handling, proper use of office equipment, workstation arrangements, office lighting, Indoor Air Quality (IAQ), work posture and work pressure.

Ergonomics at the Head Office

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Employee Well-Being and Fulfillment

Enriching the work life The Staff Recreation Club, which was dissolved a few years ago, was re-established in 2007 to ensure better formulation and co-ordination of employee activities and events that gear to the needs of employees. We organise a wide range of employee activities and events such as holiday trips, hiking, swimming classes, movies, concerts and seminars on health and family matters, in order to enhance interaction between employees from different departments and help create a more balanced and enjoyable work-life. In particular, our ‘Relax at One O’clock’ event at Head Office covers many useful, fun and interesting topics on health and hobbies so as to nurture our employees’ well-being both during and outside of their work hours at Hong Yip.

Furthermore, free lunch is provided at Head Office so that employees can enjoy a healthy meal together in the office premises. Meal coupons for use at SHKP’s hotels are offered to employees with outstanding performance as an incentive.

In view of the popularity of golfing activities, we purchased a corporate membership in theMission Hill Golf Club, Shenzhen, which is available for use by senior level employees andalso our elite customers through the arrangementof Home Convenience Service Co. Ltd., an associate company of Hong Yip, which provides high quality convenience services to residents at certain estates.

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Employee volunteering

For many years, we have engaged our employees through volunteering programmeswhich are meaningful opportunities for capacity building both in our employees and the community, and also to develop employee morale and work-life balance. Our employees have shown great enthusiasm for a range of community services which are described in the ‘Responsibility to Society’ section of this Report.

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Engaging our Employees

We conducted an ‘Employee Opinion Survey’ in 2007, in which 4,380 completed surveys were received and 83% of the participants were frontline employees. The survey showed that the top three areas of concern for our employees are ‘remuneration and benefits’, ‘fairness at workplace’ and ‘career development’. Improvements made as a direct result of the 2007 survey include:

• Increase number of annual leave days for site office employees from 12 to 14 days

• Introduce ‘study leave’ category• Introduce compassionate leave for frontline employees• Improve our medical benefits by including Chinese Bonesetter / Herbalist as

clinical visits

Key challenges ahead

• Extend and strengthen internal communication channels to promote transparency and understanding in order to deliver high quality customer services.

• Continue to drive our Talent Development Programme and clearly identify career development paths to develop employees internally to support the growth of the Company’s business.

• Organise more social and recreational activities, and use different channels to address employees’ concerns and needs so as to retain a happy workforce.

• Maintain the competitiveness of our employee remuneration and benefits plan so that our Company can remain the employer of choice in the industry.

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8. Responsibility to our Customers

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We have always been committed to providing incomparably high standard of quality services for customers and also to build a strong brand of professional services. There are seven quality monitoring measures in place:

• Audit of our services by SHKP• Internal audit of our services• Annual opinion survey by an independent

organisation• Carry out monthly visits to homes and commercial

premises to gather occupants’ opinions on our services

• A 24-hour hotline to handle customer complaints effectively and on a timely basis

• Mystery customer visits• Tea gatherings where frontline employees meet with

Vice Chairman

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Delivering Service Excellence to our Customers

To align with Hong Yip’s Quality Policy: ‘We will deliver premier services with ultimate courtesy and manage every property to the highest quality standards’; we have been running the Service Excellence Training Programme for our employees in the past few years with the following objectives:

• Enhancement of property image and value• Provision of value-for-money services and facilities• Improvement on customer service skills and quality• Positioning Hong Yip as the market leader

Focus Areas of Training The key training areas in the Programme are:

• Customer servicing• Value-added servicing• Emergency/crisis handling• Security measures• Maintenance acquaintance• Cleanliness and hygiene knowledge• Building enhancement

Did you know?In 2007, our Service Excellence Training Programme was awarded The People Development Programme of the Year at the Asia Pacific Customer Service Consortium Customer Relationship Excellence Awards (2006).

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Challenges of the Programme

The key challenges of the Programme were changing the mindset of over 3,000 frontline employees and keeping the momentum for continuous improvement. To overcome these challenges, we adopt the ‘train the trainer’ method to deliver training, offer reinforcement and refresher courses, field coaching and experience sharing sessions, and help employees to develop self-value and awareness through workshops. We also provide rewards and recognition to outstanding employees through the annual ‘Service Excellence Election’ campaign. There are four stages to the campaign, commencing from election by customers, individual presentation and group discussion selection process, case analysis through real-life examples, and finally panel assessment by top management. In 2007, over 24 employees were awarded the ‘Star of Service Excellence’. Three of the winners share their experience with us:

Gold Star winner in the Customer Service Attendant –Residential Category – Service Excellence ElectionWANG Lu Wei, South Wave Court: Through the company’s training and development, I have learnt that property management is not just about providing security services, but a variety of excellent services to our customers that move with the times. This industry faces many challenges and changes but the enriching work experience gained with Hong Yip has equipped me to continue to serve many customers and the society.

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Silver Star winner in the Customer Service Attendant –Residential Category – Service Excellence ElectionLEE Wai Fong, Pristine Villa: This award is the company’s recognition of my hard work in the past eight years and it really helps to build employee morale. To be a Star of Service Excellence, it is important to develop relationships with our customers and be friendly and proactive in providing our services on a daily basis. Being attentive to details and creative in our work is key to delivering tailor-made customer services, which displays SHKP’s ‘Building Homes with Heart’ principle.

Bronze Star winner in the Customer Service Supervisor –Non-residential Category – Service Excellence ElectionCHAN Chun Wun, 18 Farm Road: I feel privileged to be able to take part in the Star of Service Excellence Election and share valuable work experiences with other colleagues. Receiving this award helps to affirm my dedication to provide excellent services to our customers and I am grateful for the many development opportunities that the company has given me in the past.

Recognition of our Service Excellence Customer Service Excellence Award 2007 by Hong Kong Association for Customer Service ExcellenceThe Q-Mark Certificate (2004-2007) awarded by the Hong Kong Q-Mark Council Federation of Hong Kong Industries (the first property management company to be awarded)Excellent Brand of Property Management 2007 – ‘Hong Kong Leaders Choice’ Brand Awards by Metro FinanceExcellent Services Brand Award – Property Management (Residential) (2007) by Sing Tao Hong Kong Service Award – Property Management Category (2007) by Eastweek Magazine

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Adding Value to Our Portfolio

Hong Yip’s Quality Assurance ProgramThrough our Quality Assurance Program (QAP), we aim to:

• Increase the property value of the buildings under our management;• Upgrade the living standard and environment of building owners; and• Enhance the discerning characters and status of buildings through

upgrading their hardware and software.

Implemented and completed in 2000 and 2005 respectively, the first stage of QAP focused on upgrading the interior of the buildings. Altogether 247 buildings were upgraded. The second stage of QAP began in 2006, which focuses on upgrading both the interior and exterior of the buildings and is expected to complete in 2010. 318 buildings have been enlisted to undergo the Program. In 2007, we made remarkable progress with 59 buildings satisfactorily upgraded. The QAP involves the following improvement works:

• Facelift of building façades;• Refurbishment and upgrading of common areas including entrance

lobby, typical lobbies and corridors;• Maintenance and renovation of staircases;• Maintenance, renovation and management of car parking area;• Enhancement of recreational facilities and clubhouses;• Modernisation of E&M systems;• Improvement of landscape/horticulture in the surrounding environment;

and• Implementation of innovative and sustainable proposals.

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To evaluate the effectiveness of QAP, we compare the market value of the buildings before and after the Program. In 2007, we analysed 48 out of the 59 (81%) buildings under the Program. Notably, 25 C&I buildings have attained an average increase in value of 28% while 23 residential estates have attained an average increase in value of 34%.

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Valuing our Customers’ Opinions

Hong Yip’s Property Management Services Survey 2007For over a decade, we have been conducting annual independent customer surveys with the support of City University of Hong Kong, which showed an increasing trend of customer satisfaction. In 2007, we decided to engage The Hong Kong Polytechnic University to undertake a more comprehensive survey of Hong Yip’s property management services. The survey was targeted at individual occupants and Owners’ Committees who submitted over 17,500 and 260 surveys respectively. The participants rated their satisfaction of Hong Yip’s property management practices according to 54 different service categories including; security, repair and maintenance, hygiene of public areas, management of car park, pool and clubhouse, shuttle bus service, performance of property management employees, complaints handling and emergency response.

Results of the surveyA total of 51 out of the 54 categories received over 95% response of being satisfied or strongly satisfied. In particular, the shuttle bus service categories (attitude of driver, service frequency and timeliness, and cleanliness of vehicle) and clubhouse management categories (attitude of our employees, recreational facilities, and food and beverage services) received 100% response of being satisfied or strongly satisfied. On the other hand, areas of improvement include pool management categories (service quality of lifeguards and cleanliness of changing room facilities) which only received an average of 74% response of being strongly satisfied. As a result, we have revised the cleaning procedures within the pool management guidelines.

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Promoting Customer Health and SafetyEducation and raising awareness We continue to educate and raise awareness amongst occupants with regards to health and safety issues by posting useful information in common areas at our managed commercial buildings, residential estates and clubhouses, e.g., we have a permanent H&S exhibition corner at New Trade Centre. We also provide individual notification to occupants on specific safety issues such as the employment of contractors involving the use of scaffolding.

Did you know?During 2007, the clubhouses at our managed estates, Sham Wan Tower and Noble Hill, were assessed and recommended to be awarded with the HKQAA Certification of Hygiene Control System.

Healthy EatingIn adding value and variety to our customer servicing, we organised the 2nd Clubhouse Culinary Competition in 2007 with the aim of promoting nutritious food at our clubhouses and sharing best practices in food and hygiene and related customer services. With support from CLP’s DeLight Club and judges for the competition (the US award-winning chef Mr. Martin Yan and the Governing Director & General Manager of the Hsin Kuang Restaurant (Holding) Ltd, Mr. Thomas Woo); cooking teams from six residential estates competed with each other based on the nutritious content, taste, design, colour and originality of their dish.

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Outreach to our Customers on Environmental Protection

Saving paperWe believe that it is important to integrate environmental protection into our daily lives and we are always finding ways to raise environmental awareness and support among our customers. In 2007, we launched the ‘Green Bill Competition’ in partnership with CLP to encourage occupants at 25 of our managed residential estates to save paper by opting for electronic billing. Within three months, over 5,000 estate units had signed up for electronic billing, a very encouraging result. Prizes were awarded to the estates where the occupants demonstrated the highest participation in the competition. To support SHKP’s principle commitment: ‘Building Homes with Heart’, we endeavour to explore new and innovative ways to promote environmental protection in partnership with other corporations sharing the same commitment.

Waste separation and recyclingOur huge efforts in facilitating source separation and recycling, both at our managed residential estates and C&I buildings, have been met with enthusiasm and commitment from the occupants. Go to ‘Waste Management’ in the ‘Responsibility to the Environment’section for more details.

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Key challenges ahead

• Continue to pioneer change in the industry and create value-added services that meet customers’ needs.

• Ensure continuity in our professional training and technology upgrades to fulfill customers’ expectations.

• Continue to educate our customers on relevant environmental, health and safety issues and encourage their participation in green activities.

Alice Lam, Area Manager: ‘It is great to see that an increasing number of occupants are becoming more conscious of the importance of supporting environmental initiatives as a collective force. We strongly believe that the collection volume should not be the ultimate goal. Our concern is to help occupants understand the genuine meaning of the recycling programmes and create good habits of source separation and waste reduction.’ (Taken from the supplement section of The Standard on 20.02.2008)

Alice Lam, Area Manager: ‘It is great to see that an increasing number of occupants are becoming more conscious of the importance of supporting environmental initiatives as a collective force. We strongly believe that the collection volume should not be the ultimate goal. Our concern is to help occupants understand the genuine meaning of the recycling programmes and create good habits of source separation and waste reduction.’ (Taken from the supplement section of The Standard on 20.02.2008)

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9. Responsibility to Society

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As a good corporate citizen, we provide continuous support for various community activities by offering volunteer service and sponsoring different community associations in their efforts to build a more harmonious society. We encourage our employees and customers to engage in multi-faceted voluntary services that reach out to the elderly, underprivileged, youths and disabled, and also support environmental protection.

The Hong Yip Volunteer Team was set up in 2001 and is registered as a volunteer team with the Social Welfare Department. In order to promote volunteer service systematically and effectively, we have also set up 38 volunteer sub-teams.

In 2007, our volunteer team participated in over 50 volunteer service activities, with the contribution of 600 employees and over 8,300 service hours outside of work. In addition, the Company sponsored 24 community projects during the year.

Our volunteers participate in short term volunteer service activities such as; charity bazaar, fundraising and elderly home visits, and also longer term community programmes in partnership with a number of major social organisations including The Hong Kong Society for the Aged, The Hong Kong Society for the Blind, The Neighbourhood Advice-Action Council, Christian Family Service Centre, Haven of Hope Christian Service and the Social Welfare Department.

We share with you below some highlights of our support for community activities.

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Did you know?In 2007, we were awarded the following certificates from the Social Welfare Department in recognition of our volunteer service:Individual volunteers31 employees awarded Gold Certificate (200 service hours in a year)42 employees awarded Silver Certificate (100 service hours in year)56 employees awarded Bronze Certificate (50 service hours in a year)Our volunteer teams (according to the service hours accumulated by their members)5 teams awarded Gold Certificate (1000 service hours in a year)2 teams awarded Silver Certificate (600 service hours in a year)1 team awarded Bronze Certificate (300 service hours in a year)

Fundraising Activities

Flag DaysOver 250 of our employees volunteered to sell flags on a number of Flag Days during 2007 organised by various community/charitable organisations. On the Flag Day organised by Playright Children’s Play Association, the Hong Yip volunteer team was awarded for the most funds raised in Hong Kong district.

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Fundraising walks/marathons/climbathonsOver 340 of our employees participated in these fundraising events in 2007, including the ‘Walks for Millions’ organised by The Community Chest in which we raised over HK$ 53,000. We have also been supporting the Climbathon at Central Plaza organised by Hong Chi Association for several years.

Stall sale fundraisingWe participated in three stall sale events organised by The Hong Kong Society for the Blind, Hong Kong Christian Service and Haven of Hope Christian Service respectively during 2007. At the charity cake sale for Haven of Hope, we raised over HK$11,500 for elderly care projects. Other fundraising activities were held at popular SHKP shopping malls to benefit the disabled.

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Children Mentoring ProgrammeCollaborating with The Neighbourhood Advice-Action Council’s Tung Chung Integrated Services Centre, our volunteers served 350 children aged between 5 and 14 in a ‘Children Mentoring Programme’ which consists of a variety of life enriching activities and educational visits/events. The aim is for the volunteers to adopt the role of a mentor to the children and help them to look beyond their financial/physical conditions, build self-confidence to face difficulties positively, and develop personal goals for the future.

Caring for the Elderly

Building a Harmonious Community Starts from Caring for the ElderlyThe Social Welfare Department launched a volunteer program for residents to join forces in caring for the elderly in their neighbourhood, which in turn helps to build a harmonious community spirit. Our role is to enlist residents for the program and coordinate the volunteer teams to serve the community. Between 2007 and 2008, residents from 23 of our managed estates volunteered in community services for the elderly and received the ‘Caring Estate’ logo. In addition, four of the estates were awarded the ‘Leading CaringEstate’ logo, demonstrating a remarkable contribution of volunteer service hours that meet the scheduled service level.

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‘Caring Estate’ logos awarded in 2007

Royal Peninsula Royal Peninsula The Seacrest

Pristine Villa Pristine Villa Botania Villa

Prima Villa Prima Villa Mei Chung Court

Serenade Cove Serenade Cove May Shing Court

Parc Oasis Phase III Baycrest

Ming Nga Court Lei Tung Estate

Forest Hill Sham Wan Towers

Fortune Garden No. 37 Repulse Bay

The Parcville Oscar By The Sea

Grand Del Sol Park Central (Residential)

Beneville On Ning Garden

Tak Tin Estate

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Building Homes and Caring Neighbours with Heart – Redevelopment of Shek Kip Mei Estate Volunteering Services Since 2005, our volunteer team has been providing timely assistance to the elderly affected by the redevelopment of Shek Kip Mei Estate. The one-stop service assisted the elderly to move into new homes and better adjust to their new community. Partnering with The Neighbourhood Advice-Action Council and Social Welfare Department, our volunteer team conducted regular care and concern visits to the elderly, explained to them the re-housing plan, assisted the elderly in the selection of new flats, building inspection, removal and house renovation, and advised them on the proper use of building facilities. We also organise family fun days, special home visits and festivities during the year.

With our experience in helping the elderly affected by the redevelopment of Shek Kip Mei Estate, we are extending a helping hand to the elderly who need to relocate due to the demolition and redevelopment of So Uk Estate and Lower Ngau Tau Kok Estate. Through the ‘Joining Hands in Building New Homes’programme organised by The Salvation Army and the ‘Community Caring and Support Network Plan’organised by the Social Welfare Department, we will be assisting about 1,900 elderly households in the selection and inspection of their new homes, as well as performing general renovation works to help them settle in quickly and easily.

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Neighbourhood Active Ageing Project Initiated by the Elderly Commission, the Neighbourhood Active Ageing Project seeks to establish a support network in a neighbourhood setting for the elderly where they play a leading role. Organisations and individuals who are interested in serving the community will help to promote the message of ‘active ageing’. We have committed to promoting this project within three of our managed residential estates and our volunteer team will collaborate with different social service organisations in servicing the elderly at various districts.

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Serving Those with DisabilitiesDuring the year, our volunteer team participated in numerous activities organised for people with disabilities to provide them with personal care and support. The personal interactions between our volunteers and the people we served brought a great deal of joy and fun to both parties. Highlights include:

• Partnering with The Hong Kong Society for the Blind to organise the ‘Kingdom Swimathon for Brightness 2007’, ‘Barrier Free Music Concert’ and the ‘Enlightening Action Exhibition’

• Working with Haven of Hope Christian Service, our volunteers took severely disabled residents to visit The Hong Kong Museum of History and mentally-handicapped children to The Aberdeen Funfair.

We also help those working at The Spastics Association of Hong Kong Bradbury Tak Tin Workshop to build self-sufficiency by placing orders for laundry cleaning, design and printing of banners, and making document carrier bags, etc.

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Improving livelihoods

Employees Retraining SchemeAs early in 1996, Hong Yip has actively partnered with non-profit organisations in helping the unemployed to enhance their employability through providing them with practical work experience in different job categories of our Company amidst the ever-changing economic situation.

In year 2006 and 2007, we employed a total of 2,517 retrainees from the Employees Retraining Scheme developed by the Employees Retraining Board (ERB), which account for about 40% of the new recruits in that period. The successful recruitment and retention of the retrainees earned us the only company presented with the Platinum Award in the ERB Employers Gold Star Award in 2006 and 2007. In fact, Hong Yip has been awarded the greatest number of Platinum Awards and Gold Star Awards in aggregate amongst all the companies in Hong Kong nominated for these Awards in recognition of their unreserved support rendered to the retraining programmes. These achievements are indisputable evidence of our commitment to corporate social responsibility in tackling the unemployment problem of the community.

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Skills transfer and creating job opportunitiesIn supporting the 2007 policy address by the Chief Executive of Hong Kong to develop and support social enterprises in Hong Kong, one of Hong Yip’s associate companies, Nixon Cleaning Co. Ltd has jointly set up a Social Enterprise Project with Hong Kong Association for Democracy and People’s Livelihoods. The aim is to operate an organisation that provides cleaning and waste recycling services with a view to creating job opportunities for the non-skilled and low-income workers in Sham Shui Po. Nixon Cleaning Co. Ltd will provide the necessary expertise to new employees through training courses so as to enhance overall operational efficiency and effectiveness.

Caring Partnership Project with Haven of Hope Christian ServiceAlthough the Hong Kong economy has been growing steadily in recent years, there is a growing group of vulnerable people with tremendous need in our society. With our mission to help these people to receive better quality of life, we have entered into a partnership project with Haven of Hope Christian Service, which provides a platform for our employees to help and interact with vulnerable people. In the next two years, we hope to provide free inspection, repair and maintenance services for 150 homes of elderly singletons in Tseung Kwan O and also offer employment opportunities to those with intellectual disabilities but have the potential and capability to work independently. During 2007, we determined all details of the partnership project including visits, mentoring, personal development programme, job placement, etc.

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Advocate Healthy Living

‘Healthy Walk with Sustainability’ Project – Sham Shui Po Healthy and Safe Community Steering CommitteeTo encourage the residents of Sham Shui Po District to develop healthier lifestyles and better physical health through regular exercise, the ‘Healthy Walk with Sustainability’Project, organised by Sham Shui Po Healthy and Safe Community Steering Committee, aims to deliver the message: ‘Walk 30 minutes every day and healthy living will come your way!’. Apart from sponsorship, our employees also took part at the project launch ceremony and enjoyed a walk around the park with all the participants to show our wholehearted support for the project.

Exercise more and improve quality of lifeAt Quarry Bay Sports Centre and Chun Wah Road Sports Centre, where Hong Yip is providing management support services, we will be supporting the ‘Free Admission Scheme of Leisure Facilities’ launched by the Leisure and Cultural Services Department (LCSD) by bearing extra electricity costsat the two venues from July to September 2008.

The LCSD Scheme aims to support the Beijing 2008Olympic Games, encourage the public to do exercise and promote community sports with a view to improving the public's quality of life.

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Support Recycling and Reuse

Used Books Donation 160 of our managed residential estates participated in the annual ‘Used Books Donation’ event organised by World Vision. A total of 52,338 books were collected to benefit underprivileged students in Mainland China.

2007 Waste Electrical and Electronic Equipment (WEEE) Recycling DayWe supported the WEEE Recycling Day in 2007 by providing the venue and sponsoring the promotion for the event in Tuen Mun district. Residents from our managed estates in the district showed great support for this Hong Kong-wide activity organised by the EPD to raise public awareness about the need to reuse and recycle old computers and electrical and electronic appliances. In particular, residents from Hanford Garden and San Wai Court together donated over 550 items of WEEE and Hanford Garden was awarded the best performer in the ‘private estate – open to public’ category in terms of the greatest quantity of WEEE items collected by weight.

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Did you know?For six consecutive years, we have been awarded with the Caring Company Logo organised by the Hong Kong Council of Social Servicesin recognition of outstanding performance in corporate social responsibility and efforts to create a caring community.

Our nominators include 11 social service organisations:

• Christian Action• The Hong Kong Federation of Youth Groups• CTU Education Foundation Limited• Hong Kong Employment Development Service Limited• Haven of Hope Christian Service• St. James’ Settlement• Green Power• New Territories Association Retraining Centre Limited• Social Services of the Hong Kong College of Technology• Hong Kong Christian Service• Playright Children’s Play Association

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10. CSR Objectives and Targets

Item/Action Past Achievements Target 2008Adopt energy saving initiatives

6.3million kWh saved in 2007 (2005 as baseline)

Increase saving by 4% (2005 as baseline)

Perform energy audit at all properties

At least once a year Continue the specified action

Convert condensing unit for A/C chiller from air-cooled to water-cooled

Completed at two sites

Plan for conversion at Wonderland Villa Shopping Arcade

Upgrade lift control system to VVVF type

Completed at eight sites

10 more buildings planned for upgrade

Adopt the VSD pump system instead of traditional pressurization tanks

Completed at one site Continue to promote specified item at other sites

Use LED light instead of traditional fluorescent light tubes to illuminate ‘exit’signs

Completed at 17 sites Continue to promote specified item at other sites

Energy Conservation

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Item/Action Past Achievements Target 2008Number of estates to join the ‘Source Separation of Domestic Waste’programme

60 estates Increase by 100%

Number of buildings to be awarded with the ‘Gold Wastewi$e’ and ‘Wastewi$e’ logos

•22 ‘Gold Wastewi$e’logos•10 ‘Wastewi$e’ logos

Increase by 30%

Collect used cooking oil at Bene Villa and donate to charity groups for re-processing into eco-friendly soap

40 liters collected per month on average

Continue the specified action

Water Management

Cleaning of potable water tank and flush water tank

Quarterly and half-yearly cleaning performed respectively

Continue the specified action

Indoor Air Quality (IAQ)

Achieve IAQ certification

Three sites certified 12 more buildings planned to acquire certification

Waste Management

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Item/Action Past Achievements Target 2008

Non-VOC paint Used non-VOC paint for building decoration (except enamel paint and floor paint)

Continue the specified action

Offer green products and services of our associate companies (Nicole Environmental Services Co. Ltd & Nixon Cleaning Co. Ltd) to our managed residential estates

Green products and services offered:•TDP plastic products•Light eco-energy efficient cost saver Ecokleen•Fluskleen•Eco pavement block•Food waste eliminator•Chemical waste collection•Recycling of old clothes, paper and metal

Continue the specified action

Environmental-friendly Products

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Item/Action Past Achievements Target 2008

Environmental Initiatives in partnership

Partner with other organisations on environmental initiatives

•The Wind Mills Project (with Hong Kong University)•Pool water filtration (with Polytechnic University)•Green Roofing (with expert contractor)

•Launch the ‘Seafood for a Sustainable Planet’ Culinary Competition with WWF

Accident rate An accident rate of 1.54% was achieved in 2007

Maintain an accident rate of less than 1.6% throughout 2008

Prosecution on health and safety issues from Government

Zero prosecution Maintain zero prosecution

Health and safety training

Training programmesand annual OHS seminar organised for employees

All Area Managers on probation and Maintenance Engineers with over one year of service to complete the ‘General Safety in Estate Management’course and the ‘Safety Supervisor’ course respectively offered by the Occupational Safety and Health Council

Health and Safety

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Item/Action Past Achievements Target 2008

Participate in the EPD’s Environmental Protection Ambassador Training Programmes for Property Management

About 100 employees have already participated

Increase by 10%

Participate in our green education activities

More than 400 properties participated in 2007

Increase the number of activities by 10%

The Mentorship training programme

Achieving the ratio of 1 mentor to 5 mentees

Increase the ratio to 1 mentor to 4 mentees

The ‘Senior Mentor’training programme

New initiative Launch in 2008

Employee handbook Issued in 2007 and made available to all new employees at operative level

To issue the employee handbook designed for office staff in 2008

Personal Data Policy New initiative To set and implement a more comprehensive policy across the Company

Employee Training and Management

Education and Awareness

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11. Summary of Key StatisticsUnit 2007 2006

EnvironmentElectricity consumption (1) kWh (million) 128 130

Electricity consumption (2) HK$ (million) 124 124

Electricity consumption per floor area (3) kWh/sq ft 1.32 1.34

Waste collected for recycling by property type:

Domestic Tonnes 7,412 5,124

Commercial & Industrial Tonnes 1,804 1,718

Waste collected for recycling by type:

Waste paper Kg 7,950,805

Used clothes Kg 463,559

Plastics Kg 527,859

Aluminium cans Kg 172,684

Metal Kg 93,158

Batteries Kg 1,663

Cartridges & CDs Kg 5,813

Waste recycling %'s:

Domestic % 7.4 5.5

Commercial & Industrial % 6.5 6.1

2006 data not

available

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Unit 2007 2006Health & safetyAccident rate (4) % 1. 54 1.56

No. of hours lost to accidents (5) 22,814 55,385

No. of work fatalities 0 0

Employee training No. of types of training 40 16

No. of sessions 255 218

No. of employees attended 8,567 7,270

Community servicesNo. of volunteer service activities 52 43

No. of employees participating in volunteer service 600 491

No. of hours of volunteer service (6) 8,369 5,237

(1), (2) & (3) show the electricity consumption based on the 2003 portfolio and includes public areas and facilities of our managed properties only (excludes Head Office).(4) Accident rate = (Total number of reportable accidents according to the Employees’Compensation Ordinance / Total number of employees in the year) x 100%(5) Figure based on number of reportable accidents according to the Employees’ Compensation Ordinance.(6) Figure based on number of hours of volunteer service outside of work.

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12. Verification Statement

BMT Asia Pacific Limited (BMT) was engaged by Hong Yip Service Company Ltd. (Hong Yip) to verify the contents of the company’s first Corporate Social Responsibility Report 2007 (hereinafter the “Report”). The Report describes the environmental and social performance of Hong Yip on or before 31 December 2007.

ObjectivesThe verification intends to provide Hong Yip’s stakeholders with an external assurance of the accuracy and completeness of information presented in the Report with reference to the AA1000 Assurance Standard’s three core principles.

This Statement is issued based on:

• Independent third party opinion – BMT was not involved in any aspects of Report preparation; and

• The findings of a verification process that involved validating representative selection of data and claims, checking data collection mechanisms and information management systems, assessing the Report's comprehensiveness, and identifying areas to improve Hong Yip’s reporting process.

ApproachThe verification was based on an interview with Hong Yip’s representative on 27th August 2008. BMT reviewed the selected claims and reported figures, examined and checked supporting data and documented evidence, as well as data collation systems. Where further investigation was necessary to confirm claims, additional information was requested and reviewed.

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Results and Commentary

Report Accuracy• The claims made in the Report represent an accurate account of Hong Yip’s actions

and performance in 2007 or before. For the outstanding claims and figures that were deemed questionable or unclear during the verification, Hong Yip has made amendments to BMT's satisfaction; and

• Hong Yip has developed an organised and effective data collection mechanisms and information management systems. Data were systematically collected, recorded, filed and analysed following prescribed methodologies.

Report Coverage and Relevance• The Report provides a balanced overview of Hong Yip’s environmental and social

performance in or before 2007 with respect to its major business activities in Hong Kong, significant aspects related to operations and services, key programme areas and relevant initiatives.

• The Report sufficiently reflects Hong Yip’s specific actions in 2007 or before to address environmental and social impacts from its own operations and services on its key stakeholders. Planned targets for the year 2008 required to achieve its policy commitments were also set out in the Report.

• Hong Yip has graphically presented the major year-on-year trends in environmental performance, and provided at-a-glance overview of achievements for 2007, and future targets.

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Recommendations for Future Reports

Hong Yip is commended for publishing its first non-financial report to communicate with its stakeholders on its environmental and social commitments and performance. For future reporting, Hong Yip is encouraged to:

• Engage with stakeholders in the reporting process, and provide information on how stakeholders’ concerns are addressed in its internal management procedures and reporting.

• Enhance the reliability of data and information collection system by strengthening the internal verification procedures.

• Consolidate the quantitative performance indicators in every key programme area using graphical presentation format to facilitate year-on-year comparisons of performance

• Extend the reporting scope to include the sustainability performance of Hong Yip business activity in line with the internationally recognised Global Reporting Initiative’s Sustainability Reporting Guidelines.

2 September 2008

Carmen NgLead Verifier and Senior Environmental ConsultantBMT Asia Pacific Limited

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13. Your Feedback

Thank you for reading our first CSR Report. We welcome your feedback on any aspects of this report and any suggestions for improving our future CSR performance and reporting. Please write to us either by email or post at the following address:

Email: hongyip@hongyip.com

Address:Hong Yip Service Company Limited26/F Sun Hung Kai Centre,30 Harbour Road,Wanchai,Hong Kong

Website: http://www.hongyip.com

Tel: (852) 2828 0888Fax: (852) 2828 0836

Photo designed by Peter CHEN.L.T.