The Group strictly abides with relevant laws and regulations such as the Anti-Unfair Competition Law of the People’s Republic of China (《中華人民共和國反不正當競爭法》) and Anti-Money Laundering Law of the People’s Republic of China (《中華人民共和國反洗錢法》), and implements the Measures for the Administration of Rewards and Punishments in Auditing and Supervision (《審計監察獎懲管理辦法》), the Anti-fraud Management Regulation(《反舞弊管理制度》), the Supervision and Audit Regulation (《監察審計制度》), and the Code of Business Conduct (《商業行為準則》) to standardize the work procedures of audit and supervision and prohibit misconducts such as abusing power, insider trading, money laundering, and conflicts of interest. In 2023, the Group has no judicial litigation cases related to corruption or bribery, money laundering or insider trading, or conflicts of interest.
A robust risk prevention and control system serves as the fundamental guarantee for the Group’s long-term and stable operation. The Group has established a closed-loop mechanism, which is continuously monitored and regularly reviewed by the Board of Directors, and independently assessed by the Audit and Supervision Center, to ensure the internal control system is compliant and effective.
The Group has formulated and released the Code of Business Conduct (《商業行為準則》). In this way, we focus on strengthening management and prevention of matters such as ethics and integrity, bribery and interests, gifts and hospitality, insider trading and fraud. We will issue warning, demerit, demotion, dismissal, termination of labour contract in accordance with the Measures for the Administration of Rewards and Punishments in Auditing and Supervision (《審計監察獎懲管理辦法》). Those whose violations constitute a criminal offense will be handed over to the judicial authorities according to the law. In this way, we will work together with all parties to create a clean and fair working environment.
To avoid damage to the Company due to conflicts of interest, the Group strictly prevents integrity risks in all aspects of daily operations, implements a list of prohibited practices in important operations such as procurement and capital transfer, and manages key personnel through interest declarations. During the year, we focused on anti-fraud inspections of project companies, and conducted four unannounced surprise audits. Following these inspections and audits, we engaged in thorough discussions with the project companies, formulated corrective measures, and supervised the implementation of these corrective measures to ensure their full compliance.
The Group continued to strengthen the daily supervision of anti-fraud activities, released the Management Measures for Complaints and Reporting (《投訴舉報管理辦法》), in which reporting channels were specified publicly. All Group employees can provide reporting information via a variety of reporting channels, including emails, reporting telephones, audit site announcements, letters, and interviews. Simultaneously, we clearly stipulated anti-fraud clauses and reporting channels in the contract terms to ensure that open, smooth, and multi-channel reporting methods can be implemented, and we increased publicity and implementation of anti-fraud and reporting methods during on-site audits to ensure grassroots employees know how to report. Meanwhile, we place importance on safeguarding the confidentiality of whistleblower information. We are committed to the confidentiality of the informant’s personal information and the content of the report.
For complaints and reports received, our group will analyze and assess the reported situation within five working days to determine whether the conditions for investigation are met. For those reports that meet the conditions for investigation, an investigation team will be immediately established to commence the investigation process, and an investigation report will be produced upon completion. The results of the investigation will be handled in accordance with applicable company policies and national laws and regulations. In subsequent management and operational audits, companies with a history of fraud will be given special attention, and more comprehensive and in-depth management audits will be conducted on them.
We firmly oppose any form of impeding or suppressing whistleblowing activities, as well as retaliatory behavior against whistleblowers. Should any infringement upon the legal rights and interests of whistleblowers or individuals assisting in investigations be discovered, we will handle the matter seriously in accordance with the Measures for the Administration of Rewards and Punishments in Auditing and Supervision (《審計監察獎懲管理辦法》) and, if necessary, refer the case to judicial authorities.
The contract signed by the Group and the supplier clearly lists the “Prohibition of Fraudulent Behavior” clause, which states that neither party shall provide benefits outside the contract to the other party’s handler or other personnel, and it also clearly defines the acceptance of reports by the Group Department, including dedicated reporting department, reporting telephone number, and reporting mailbox. This action makes supplier cooperation fairer and more transparent and effectively avoids integrity risks in the supply chain management process. In addition, during the business management audits, the Group conducts appropriate inspections on the suppliers for their performance in compliance with laws and regulations, integrity management, and anti-corruption policies. In this way, we provide further guarantee for the building of a clean supply chain.
The Group has been running a comprehensive anti-corruption training program persistently. In 2023, the Company conducted integrity training for all employees, combining offline training, online self-study, and prerecorded training videos. This training further promoted the knowledge of anti-fraud related laws and regulations, as well as the Company’s policies, and reinforced the integrity awareness of employees at all levels through analysis of industry cases. For board members, the Group deepens the directors’ understanding and awareness of anti-corruption and integrity responsibilities by distributing anti-corruption and integrity training materials and conducting training seminars related to the responsibilities of directors under the Listing Rules. This initiative covers all members of the board.
With reference to the Enterprise Risk Management Integrated Framework developed by COSO2 , the Group established a risk management structure of “three levels + three lines of defense”. The first line of defense consists of business units and operational departments at headquarters, which are responsible for identifying, evaluating and monitoring their own risks. The second line of defense comprises the risk management functions and other functional departments at headquarters, which are responsible for developing a risk management mechanism that fits the corporate goals, to identify, control, determine and manage the risks faced by the Group. The third line of defense is the Audit and Supervisory Center, which is responsible for the independent review of the major business procedures and monitoring in accordance with relevant evaluation.
The Group conducts regular training on the Listing Rules regarding directors’ responsibilities (including risk management) and other related matters, and the Audit Committee, comprising independent non-executive directors, meets regularly twice a year to consider the Group’s risk management auditing and monitoring work.
The Group adheres to the basic principles of the Five Key Components of Internal Control (《內部控制五要素》), establishes a correct concept of internal control and compliance from the design level, continuously improves management to establish various standardized processes and management systems, continuously optimizes governance, and builds a comprehensive internal control and compliance system that meets regulatory requirements. The internal control is carried out on the basis of the relevant regulations of the Group.
The Group strengthened the execution of internal control audits, compliance management, establishment of systems and processes, the scope of audits, and follow-up of audit rectification and cross-departmental collaboration. In this way, we achieved closed-loop management of internal control audits. The Group strengthened the building of internal control and compliance culture and organized training sessions on the compliance culture Meanwhile, the compliance concept was fully established and enforced through online platforms, training videos and other channels.
The Group carries out risk identification work based on the Risk Management System (《風險管理制度》), and closely centered around the principles of strategic orientation, comprehensiveness, grading and classification, and risk-benefit matching. Every year, the Group collects the risks identified from the departments in charge of the Company’s risk management and its subsidiaries, evaluates the importance of the risks, scores and ranks the risks in order of importance based on the degree of risk impact and likelihood of occurrence, and formulates countermeasures.
The Group regularly organizes relevant departments to carry out risk management inspections in key areas, focusing on risk identification and early prevention, and continuously promotes the improvement of the Group’s risk management system.
The Group fully integrates ESG factors and concepts including climate change related risks into the overall risk management process of its projects:
• Summarize various ESG risks identified by the Group, such as health and safety and extreme weather events in the Internal Control Report (《內控報告》). Conduct qualitative and quantitative assessments of each risk based on the gravity of its implications on the Group’s strategic and operational objectives and its probability;
• In the selection of project vehicle equipment, new energy vehicles are actively used to reduce emissions;
• Fully consider employees’ salary, welfare benefits and other rights and interests in the project review process;
• During the investment and merger process, combined with national laws and regulations and paying attention to local regulations, the party under investigation is required to issue a written statement on whether it has been subject to environmental protection administrative penalties or has potential penalties, and provide relevant materials;
• Establish the Management System of Accident and Incident (《事故事件管理制度》) to standardize the specific process for employees to identify and report risks, and for higher-level units to manage and respond to the risks;
• Set up the timetable for the rectification and treatment of identified risks. The functional department for risk management monitors the progress of rectification by the responsible departments.
