Independent Assurance Opinion Statements

INDEPENDENT ASSURANCE OPINION STATEMENT

Statement No.: SRA - HK 603178

2012-13 Drainage Services Department Corporate Sustainability Report

The British Standards Institution is independent to Drainage Services Department (hereafter referred to as DSD in this statement) and has no financial interest in the operation of DSD other than for the assessment and assurance of this report.

This Independent assurance opinion statement has been prepared for DSD only for the purposes of assuring its statements relating to its corporate sustainability report (CSR), more particularly described in the Scope, below. It was not prepared for any other purpose. The British Standards Institution will not, in providing this independent assurance opinion statement, accept or assume responsibility (legal or otherwise) or accept liability for or in connection with any other purpose for which it may be used, or to any person by whom the Independent assurance opinion statement may be read.

This Independent assurance opinion statement is prepared on the basis of review by the British Standards Institution of information presented to it by DSD. The review does not extend beyond such information and is solely based on it. In performing such review, the British Standards Institution has assumed that all such information is complete and accurate.

Any queries that may arise by virtue of this independent assurance opinion statement or matters relating to it should be addressed to DSD only.

Scope

The scope of engagement agreed upon with DSD includes the followings:

1. The assurance covers the whole report and foci on systems and activities during the 1^st April 2012 to 31^st March 2013 on all operations of DSD.
2. The evaluation of the nature and extent of the DSD's adherence to all three AA1000 AccountAbility Principles in this report as conducted in accordance with type 2 of AA1000AS (2008) assurance engagement and therefore, the specified sustainability performance information/data disclosed in the report has been evaluated.

This statement was prepared in English and translated into Chinese for reference only.

Opinion Statement

We conclude that the 2012-13 DSD Corporate Sustainability Report Review provides a fair view of the DSD CSR programmes and performances during 2012-13. We believe that the 2012-13 economic, social and environment performance indicators are fairly represented. The CSR performance indicators disclosed in the report demonstrate DSD 's efforts recognized by its stakeholders.

Our work was carried out by a team of CSR report assurors in accordance with the AA1000 Assurance Standard (2008). We planned and performed this part of our work to obtain the necessary information and explanations we considered to provide sufficient evidence that DSD's description of their approach to AA1000 Assurance Standard and their self-declaration of compliance with the GRI guidelines were fairly stated.

Methodology

Our work was designed to gather evidence on which to base our conclusion. We undertook the following activities:

• A top level review of issues raised by external parties that could be relevant to DSD's policies to provide a check on the appropriateness of statements made in the report
• Discussion with managers on DSD's approach to stakeholder engagement. However, we had no direct contact with external stakeholders
• Interview with staff involved in sustainability management, report preparation and provision of report information were carried out
• Review of key organizational developments
• Review of the extent and maturity of the relevant account systems for financial and non-financial reports
• Review of supporting evidence for claims made in the reports
• An assessment of the company's reporting and management processes concerning this reporting against the principles of Inclusivity, materiality and responsiveness as described in the AA1000 AccountAbility Principles Standard (2008)

Conclusions

A detailed review against the AA1000 AccountAbility Principles of Inclusivity, Materiality and Responsiveness and the GRI G3.1 guidelines is set out below:

Inclusivity

This report has reflected a fact that DSD is seeking the engagement of its stakeholders through numerous channels such as internal and external feedback system and stakeholder engagement activities. This report covers the stakeholder issue together with fair reporting and disclosures for economic, social and environmental information.

In our professional opinion the report covers the DSD inclusivity issues, however, the future report should be further enhanced by the following areas:

• Introduce a strategic programme of stakeholder engagement for organization level to better understand how to balance stakeholder priorities
• Establish CSR committee to manage and oversee economic, social and environmental issues
• To promote CSR within the company through different communication channels such as circular and guideline so as to maximize the internal engagement
• Strengthen the financial management and internal performance record in the next report

Materiality

DSD publishes sustainability information that enables its stakeholders to make informed judgments about the organisation's management and performance. In our professional opinion the report covers the DSD's material issues, however, the future report should be further enhanced in the following areas:

• Establish the group or individual responsibility for stakeholder engagement
• Align priority to decision of materiality issues with organization strategy
• Determine the methodology to identify and prioritize DSD's material issues to enable all divisions to follow consistently and continuously
• Set up systematic and quantitative criteria for mapping stakeholder influence so as to better define materiality
• Document the engagement and its output and communicate it to participants of the engagement in timely manner

Responsiveness

DSD has implemented the practice to respond to the expectations and perceptions of its stakeholders. It includes customer satisfaction survey and numerous feedback mechanisms to external stakeholders and internal stakeholders.

In our professional opinion the report covers DSD's responsiveness issues, however, the future report should be further enhanced by the following areas:

• Responsiveness with more detail information and comparative data
• Enhance quantitative analysis

GRI-reporting

DSD provided us with their self declaration of compliance within GRI G3.1 Guidelines and the classification to align with application level A+. Based on our review, we confirm that social responsibility and sustainable development indicators with reference to the GRI Index are reported, partially reported or omitted. In our professional opinion the self declaration covers the DSD's social responsibility and sustainability issues, however, the future report will be improved by the following areas:

• Benchmarking the performance indicators from peers practice in the future report
• More evidence shows all levels of the organisation with quantitative information
• Within daily business and operation, data and information statistics should be considered to be classified as per GRI indicator's requirements
• Reinforce the management approach in the report to better disclose the strategic plan and its impact internally and externally

Assurance level

The moderate level assurance provided is in accordance with AA1000 Assurance Standard (2008) in our review, as defined by the scope and methodology described in this statement.

Responsibility

This CSR report is the responsibility of the DSD's Senior Management as declared in his responsibility letter. Our responsibility is to provide an Independent assurance opinion statement to stakeholders giving our professional opinion based on the scope and methodology described.

Competency and Independence

The assurance team was composed of Lead auditors and Carbon Footprint Verifiers experienced in industrial sector, and trained in a range of sustainability, environmental and social standards including AA1000AS, ISO 14001, OHSAS 18001, and ISO 9001. BSI is a leading global standards and assessment body founded in 1901. The assurance is carried out in line with the BSI Fair Trading Code of Practice.