Code on Corporate Governance Practices

Beijing Enterprises Water Group Limited (the "Company") is committed to maintain the quality of corporate governance so as to ensure better transparency of the Company, protection of shareholders' and stakeholders' rights and enhance shareholder value. During the year ended 31 December 2022, in the opinion of the board (“Board”) of directors (“Director(s)”), the Company complied with all code provisions set out in the Corporate Governance Code (“CG Code”) as set out in Appendix 14 of the Rule Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (“Listing Rules”), with deviation mentioned below.

Code provision F.2.2 of the CG Code stipulates that the chairman of the Board should attend the annual general meeting of the Company. Having regard to the travel restrictions during the year under review, the chairman of the Board did not attend the annual general meeting of the Company held on 8 June 2022. In his absence, the executive director of the Company was invited to chair the annual general meeting and the member of nomination committee of the Company was invited to attend by video/audio conferencing, and was available to answer shareholders’ questions at the annual general meeting.
 
Following the resignation of Mr. Wang Kaijun as an independent non-executive director of the Company (“Mr. Wang”) on 31 August 2022, the number of independent non-executive directors of the Company had fallen below one-third of the Board as required under Rule 3.10A of the Listing Rules. The Company had complied with Rule 3.10A and Rule 3.11 of the Listing Rules within three months from the effective date of Mr. Wang’s resignation upon the effective of appointment of Mr. Dai Xiaohu as an independent non-executive director of the Company on 30 November 2022.

Model Code for Securities Transaction by Directors

The Company has adopted the Model Code as set out in Appendix 10 of the Listing Rules as the code of conduct in respect of securities transactions of the Directors (the "Mode Code"). Having made specific enquiry of all Directors, the Company has confirmed that all Directors have complied with the required standards set out in the Model Code and its code of conduct regarding Directors' securities transactions during the year under review.

Audit Committee

The Audit Committee of the Company comprises three independent non-executive directors，namely Mr. Shea Chun Lok Quadrant, Mr. Chau On Ta Yuen and Mr. Guo Rui. The Audit Committee members performed their duties within written terms of reference formulated by the Company in accordance with the requirements of the Listing Rules from time to time. The Audit Committee is chaired by Mr. Shea Chun Lok Quadrant.

The Audit Committee is mainly responsible for considering all relationships between the Company and the auditing firm (including the provision of non-audit services), monitoring the integrity of the Company's financial statements and issues arising from the audit as well as the review of the Group's risk management and internal control systems whereby the Board had delegated such responsibility to Audit Committee to perform corporate governance duties.

Nomination Committee

The Nomination Committee of the Company was established in 2012. The Nomination Committee comprises one executive director namely Mr. Xiong Bin and two independent non-executive directors namely Mr. Guo Rui and Mr. Chea ChunLok Quadrant.The Nomination Committee members performed their duties within written terms of reference formulated by the Company in accordance with the requirements of the Listing Rules from time to time.The Nomination Committee is chaired by Mr. Xiong Bin.

The Nomination Committee is mainly responsible of formulating policy and making recommendations to the Board on nominations, appointment and re-appointment of directors and board succession.

Remuneration Committee

The Remuneration Committee of the Company was established in 2008. The Remuneration Committee comprises one executive director namely Mr. Tung Woon Cheung Eric and two independent non-executive directors namely Mr. Guo Rui and Mr. Shea Chun Lok, Quadrant. The Remuneration Committee members performed their duties within written terms of reference formulated by the Company in accordance with the requirements of the Listing Rules from time to time. The Remuneration Committee is chaired by Mr. Guo Rui.

The Remuneration Committee is mainly responsible of developing remuneration policies and in overseeing remuneration packages of the directors whether the emoluments offered are appropriate to the duties and performance of the respective individuals concerned.

Sustainability Committee

The Sustainability Committee of the Company was established in 2023. The Sustainability Committee of the Company comprises two executive directors namely Mr. Li Li and Mr. Tung Woon Cheung Eric and an independent non-executive director namely Mr. Guo Rui. The Sustainability Committee members performed their duties within written terms of reference formulated by the Company in accordance with expectation from stakeholders. The Sustainability Committee is chaired by Mr. Li Li.

The sustainability committee is responsible for monitoring and reporting to the Board on the implementation and effectiveness of the environmental, social and governance ("ESG") management. It also prioritises the material ESG issues, evaluates the risks and opportunity due to climate change, review and monitors the achievement of environmental targets and evaluates the impacts of the ESG performances of the Company on its stakeholders, including employees, shareholders, customers, suppliers, business associates and local communities.