For Sustainable Energy: Our Vision
For Sustainable Energy: Our Vision
Our Vision
for Sustainable Energy
Contents
Business Review Financial Statements
2 Performance Highlights 65 Independent Auditor’s Report
4 Chairman’s Statement 69 Consolidated Statement of Profit or Loss
7 Long-Term Development Strategy 70 Consolidated Statement of Comprehensive Income
8 Year at a Glance 71 Consolidated Statement of Financial Position
10 CEO’s Report 72 Consolidated Statement of Changes in Equity
12 United Kingdom 73 Consolidated Cash Flow Statement
16 Hong Kong 74 Notes to the Financial Statements
18 Australia 135 Five-Year Group Profit Summary and
24 Mainland China, Thailand Group Statement of Financial Position
26 Canada
28 Netherlands Other Information
29 New Zealand 136 Corporate Information
Financial Calendar and Share Information
Corporate Governance
30 Board of Directors and Management Team
35 Corporate Governance Report
55 Risk Management
57 Risk Factors
60 Financial Review
62 Report of the Directors
Performance Highlights
19,344,000
NUMBER OF CUSTOMERS
1,064 MW
GENERATION CAPACITY
114,200 km
- RENEWABLE ENERGY /
ENERGY-FROM-WASTE
GENERATION CAPACITY
- GAS-FIRED 402,500 km
3,815 MW POWER NETWORK LENGTH
GENERATION CAPACITY
- COAL / OIL-FIRED
Netherlands
Dutch Enviro Energy
Holdings B.V.
Canada
United Kingdom
TransAlta Cogeneration
United States of America UK Power Networks
Meridian
Okanagan Wind Power Energy Developments Northern Gas Networks
Husky Midstream Limited Partnership Wales & West Utilities
Energy Developments Seabank Power
Energy Developments
LEGENDS
Electricity Transmission
Renewables
Generation & Distribution
2021 2020
Financials HK$ HK$
Thailand
Mainland China Ratchaburi Power
Jinwan Power
Dali Wind Power
Laoting Wind Power
Hong Kong
HK Electric New Zealand
Wellington Electricity Lines
Australia
Australian Gas Networks
SA Power Networks
Victoria Power Networks
Australian Energy Operations
United Energy
Dampier Bunbury Pipeline
& AGI Development Group
Multinet Gas
Energy Developments
Dividends
The Board of Directors has recommended a final dividend
of HK$2.04 (2020: HK$2.04) per share, payable on
7 June 2022 to shareholders whose names appear in the
Company’s Register of Members on 24 May 2022. This,
together with the interim dividend of HK$0.78 per share,
takes the total dividend for the year to HK$2.82 (2020:
HK$2.81) per share.
Plan, NGN has further developed, and officially opened With a capacity of 30 MW of green power, the assets
to public, two semi-detached homes with all household have met expectations and started to contribute to the
appliances fuelled 100% by hydrogen - our gas network’s Group’s revenues and green portfolio. The Sheerness
vision towards zero-emission home heating. power station completed its conversion from coal-fired
to gas-fired during the year, signifying the end of the
WWU was recognised by the Institute of Customer Group’s coal-fired generation portfolio in OECD countries.
Service for customer satisfaction, and ranked as a leader Husky Midstream, having completed a number of major
in this area amongst national household brands, not just expansion projects in 2020, has placed its focus on
within the utility business sector. In addition, WWU has safety, reliability and efficiency optimisation of its system,
connected 19 biomethane plants to the network since facilitating future growth.
2013, enabling decarbonised heating for 151,000 homes.
In the Netherlands, AVR-Afvalverwerking B.V. (AVR)
Seabank Power completed its scheduled overhaul and installed a new back pressure steam turbine, thereby
exceeded targets for operational efficiency and starting substantially increasing cycle efficiency, which will supply
performance. low-carbon heat and power to 60,000 households in the
Rotterdam region. During the year, the company was
Australian portfolio successfully named preferred bidder for AEB, a waste-
to-energy business in the Netherlands; the acquisition is
The Australian portfolio delivered a profit contribution
poised to extend AVR’s core business.
of HK$1,283 million (2020: HK$1,329 million) to the
Group. In light of the massive growth in roof top solar
Wellington Electricity completed a major three-year
and distributed battery energy systems, the Australian
programme of works to enhance earthquake readiness
Energy Regulator is conducting a comprehensive process
across its network in New Zealand; the project included
to review the regulatory regime for energy companies and
seismic strengthening of 91 buildings. In Thailand,
our operating companies have been collaborating with the
Ratchaburi Power Plant delivered stable performance.
regulator through this process.
In Mainland China, the Jinwan co-generation power
Victoria Power Networks (VPN) has invested in widespread
plant increased electricity sent out in response to strong
network improvements and vegetation management
industrial demand despite coal supply scarcities. The two
techniques with a view to significantly improving bushfire
wind farms in Dali and Laoting met targets and jointly
safety, while United Energy (UE) achieved incentive
offset 207,000 tonnes of carbon emissions.
payments from the regulator for customer service and
reliability. As for SA Power Networks (SAPN), its IT systems,
including billing and customer relationship management Investment in HK Electric
were upgraded to provide improved functionality and
system stability over the coming years.
Investments
HK Electric Investments (HKEI) once again provided stable
Australian Gas Networks (AGN) exceeded regulatory income to the Group and delivered a profit contribution of
targets on customer and emergency call response times, HK$979 million (2020: HK$912 million).
repairs, and customer service. AGN and Multinet Gas are
at the forefront of gas network innovation and made HKEI’s wholly owned subsidiary HK Electric continues to
encouraging progress on the hydrogen park projects for work towards its goal of building a sustainable future.
blending green-hydrogen into the natural gas distribution In support of the Government’s “Hong Kong’s Climate
network to decarbonise the gas supply. Action Plan 2050”, which seeks to halve carbon emissions
compared to the 2005 level before 2035 and achieve
Dampier Bunbury Pipeline delivered satisfactory carbon neutrality before 2050, the company is undertaking
performance, while Energy Developments was named a phased retirement of all coal-fired generating units and
one of Australia’s Most Innovative Companies by the increasing support for renewable energy.
Australian Financial Review following its development of
groundbreaking techniques in hybrid energy solutions. During the year, progress was made on its programme of
Australian Energy Operations initiated planning for capital works that will see the commissioning of two new
augmentation of two terminal stations to advance a gas-fired generating units in 2022 and 2023 respectively,
state-wide network infrastructure enhancement initiative. together with an offshore liquefied natural gas (LNG)
receiving terminal scheduled for commissioning in 2022.
In addition, planning was under way for a large-scale
Other portfolios offshore wind farm in Hong Kong waters.
The Canadian portfolio progressed with decarbonisation
and delivered stable performance. Canadian Power The company’s smart meter installation programme
acquired two wind farms in Okanagan in June 2021, continued in 2021 with more than 120,000 smart meters
marking its entry into renewable energy generation. already deployed. Through a new corporate mobile
app, customers installed with smart meters can now to build a 10-MW renewable hydrogen electrolyser which
access detailed energy consumption information which will deliver hydrogen-blended gas to over 40,000 homes
empowers them to optimise their energy use. Other and businesses.
customers will progressively enjoy this function under the
smart meter installation programme, which is targeted
for completion by 2025. HK Electric also offered technical
Outlook
consultancy to customers to facilitate wider adoption of We continue to maintain a strong financial position, in line
electric vehicles (EVs) while also assisted the construction with our prudent strategy of seeking out appropriately
sector to reduce carbon emissions through a new “Smart valued investments that meet our criteria for accretive
Power for Construction Site” service. growth. Though there is a strong likelihood of interest
rate hikes in the coming months, our strong cash position
A range of funds, services and schemes were implemented allows us to continue to pursue our strategy and manage
to support consumers and businesses which were facing operating costs without negative impact.
difficulties in the wake of the economic slowdown
resulting from the COVID-19 pandemic. Fluctuations in commodity prices – notably those of coal
and natural gas – have affected the performance of all
players in the energy space during the year. Our well-
Initiatives to tackle climate established strategy of investment diversification across
change the energy value chain with strategic focus on regulated
infrastructure has ensured that our exposure to these
We believe that climate change is a global challenge,
fluctuations has been negligible, enabling us to deliver
and breakthrough solutions are essential to deliver clean,
consistent returns to shareholders.
affordable energy to all. Many markets are on the route
to carbon neutrality, reaffirming commitment to COP26
The global upsurge in fuel prices and a worldwide
targets. Across the board, we are seeing exponential
shortage in coal and gas supply mean energy price
growth in rooftop solar, EV adoption, and more. Although
increase is inevitable for end consumers. In this context,
this transition is placing unprecedented pressure on
we are making it a priority to support the energy-poor and
existing systems, this is a crucial stage in which customers,
underprivileged. HK Electric has set aside HK$63 million
government and energy players can collaborate to create
from three existing funds to assist those in need, promote
a greener planet.
energy efficiency and conservation, as well as strengthen
outreach to the community regarding the advantages of
We are evolving many of our electricity transmission and
and paths to low-carbon living.
distribution networks to become “Distribution System
Operators”, placing us at the heart of the new renewable
Our approach to decarbonisation transcends our own
energy future. A case in point is that in South Australia,
operating companies. Under the leadership of our
34% of households have solar panels installed for rooftop
Sustainability Committee, we will continue to collaborate
solar generation. To facilitate this shift, SAPN has invested
across the industry and with governments to deliver on
in digital technology to make the automated network
societal decarbonisation goals. Areas like hydrogenising
more agile and dynamic, enabling the receiving and
the gas supply, promoting EV rollout, increasing the
redistributing of electricity across the grid.
grid’s ability to optimise connections of renewables, and
investing in renewables are all part of this effort.
EVs are another essential part of a low-carbon future.
UKPN has been investing systematically in readying their
While recent regulatory resets have been challenging, their
networks for large-scale charging requirements of EVs in
conclusion has given us a stable platform on which to
the coming years. UKPN and UE are also conducting trials
invest in decarbonisation and offer consumers the highest
to investigate EV charging patterns and how they affect
standards in reliability, safety, affordability and customer
networks in real time to help identify affordable ways
service while maintaining controls over operating costs.
to promote their rollout and inform network and tariff
planning.
In closing, I express my gratitude to our board,
management and stakeholders, and all our employees
In gas distribution, blending hydrogen with natural gas
around the world for your support, your flexibility in the
while utilising existing gas distribution network is an
face of societal change, and your dedicated efforts during
inexpensive but efficient way to transport and store energy
the year.
as well as reduce carbon emissions. In May 2021, AGN
opened the 1.25-MW Hydrogen Park South Australia,
the first facility in Australia to produce renewable
green-hydrogen. It is currently progressing a Hydrogen
Park project in Gladstone, Queensland involving a 175-
Fok Kin Ning, Canning
Chairman
kW electrolyser. It has also commenced larger-scale plans
Hong Kong, 16 March 2022
2021
JAN - JUN
The Multinet Gas network control centre
relocates to a new centre of excellence
in Perth to improve customer service
performance and efficiency.
2021
JUL - DEC
4 NGN builds two homes fuelled entirely by
hydrogen, to demonstrate the potential of
5
hydrogen energy in helping the government
achieve net zero emissions by 2050.
Power Assets is an innovative and dynamic participant During the year, we maintained our active approach
in the global energy business. The companies in our to investing in low-risk essential infrastructure assets at
portfolio, spread across four continents, are stable, appropriate pricing. Canadian Power acquired wind farm
well-established businesses that offer earnings assets in Okanagan, marking the company’s first step
predictability and are relatively insulated from economic into renewable energy generation and carbon offsetting
cyclicity and commodities price fluctuations. Our regime. In the Netherlands, AVR-Afvalverwerking
diversified operations cover electricity generation, B.V. entered into an agreement to purchase an
transmission and distribution, gas transmission and energy-from-waste company, AEB Holding N.V..
distribution, as well as oil storage and transmission
businesses, all of which allow us to fulfil our mission The 26th United Nations Climate Change Conference
of delivering long-term sustainable earnings growth in of the Parties (COP26) held in Glasgow in November
mature international markets. 2021 mandated that all countries come forward with
ambitious 2030 emissions reductions targets to support
In 2021, despite a global surge in fuel prices, our global reaching net zero by the middle of the century. To
portfolio of companies achieved satisfactory results amid meet these challenging goals, an accelerated pathway
the COVID-19 pandemic as around 80% of our Group’s is needed for the phase-down of coal, switch to electric
share of total fixed assets of joint ventures and associates vehicles (EVs), and investment in renewables. As a Group,
comprise of regulated networks for the transmission we fully support these goals. Our operating companies
and distribution of gas and electricity. Our operating are working to cut their own operating carbon footprints
companies in the UK, Australia, Hong Kong, Mainland and those of the markets in which they operate. These
China, the Netherlands, New Zealand, Thailand, Canada strategies will remain a key priority for us in the years
and the United States all achieved performance in line ahead.
with expectations.
UNITED KINGDOM
UKPN completes a substation upgrade to improve power reliability for customers in Bedfordshire and Cambridgeshire.
Following the success of the HyDeploy project, which started supplying gas containing 20% hydrogen to
Winlaton village in 2021, NGN partnered with other industry players to develop an East Coast hydrogen network.
The partnership will enable hydrogen production at scale and develop a network to transport the gas effectively.
To enhance consumer understanding and acceptance of hydrogen heating, NGN opened the UK’s first
Hydrogen Homes so everyone can see and experience the reality of a house fuelled by clean-burning hydrogen.
The homes, which include a range of hydrogen-fed appliances such as boilers, hobs, fires and barbecues, will
be open to educational visits, helping young people learn more about saving energy and building a greener
future.
Entering into a new five-year regulatory period, WWU Power Assets Interest: Joined Since:
achieved a total gas throughput of 59,562 GWh in 25% June 2010
2021 (2020: 58,200 GWh). Over the past five years,
Gas-Fired Combined Cycle Gas Turbine:
WWU has successfully improved affordability for
customers, achieving an average 18% reduction in
1,140 MW
customer bills. Operating performance for reliability,
emergency response, and customer satisfaction achieved
or exceeded targets, and the company maintained its SPL’s generating hours in 2021 were slightly lower than
service mark accreditation from the UK Institute of budget, while its contribution exceeded expectations due
Customer Service. Approximately 329 km of mains were to higher energy prices in the 4th quarter.
laid during the year.
Operational efficiency and starting performance were
WWU continued to build out its biomethane and green better than budget. The first of two major scheduled
gas solutions to support decarbonisation, increasing maintenance outages was completed, and the second
annual capacity to 1.82 TWh during the year. This area has been deferred until 2022.
HONG KONG
A large-scale project to roll out smart meters across the farm, which will account for about 4% of the company’s
entire customer base is under way, together with the total electricity output. A Government working group
establishment of the advanced metering infrastructure is being set up to evaluate the application of hydrogen
(AMI) to support this. System development, testing, and energy in Hong Kong. Drawing on the Group’s expertise in
commissioning of the AMI solution were completed this area, the company will engage with the government
in 2021. More than 120,000 smart meters have been and industry experts on global best practices.
deployed as of the end of 2021.
Net tariffs were frozen at 126.4 cents per unit of
electricity in 2021, to support customers through
the economic slowdown following the COVID-19
pandemic. A range of relief measures was implemented
to help customers, especially small businesses, caterers
and underprivileged families. These included dining
vouchers and funding support for the installation of
energy-efficient equipment. Over 40,000 families and
300 small businesses benefited from these initiatives.
Apart from maintaining due precautions and social
distancing, HK Electric conducted a vaccination drive for
its employees to keep them safe from COVID-19.
A new online platform was launched in June 2021 for customers to track the progress of their applications
concerning supply application, account transfer, account termination, special meter reading, and autopay round
the clock. To take this one step further, the Customer Emergency Services hotline was integrated with back-end
IT systems to enable higher efficiency and transparency in handling customer calls and tracking service requests.
To promote an environmentally-friendly and paperless operating model, customers switching to e-Bill and
autopay/Faster-Payment-System received a HK$30 incentive that they could use to pay for electricity charges or
donate to a green group.
AUSTRALIA
SA Power Networks
SAPN expands operations with a new depot, equipped with a 94-kW solar system, in Barossa Valley.
In 2021, SAPN distributed 9,634 GWh of electricity (2020: During the year, SAPN successfully brought the notable
9,727 GWh). Despite storms and numerous outages SA Water project to near completion. The project
– caused by bats coming in contact with high-voltage involved the supply and installation of approximately
power lines and equipment located at the top of poles 242 GWh of roof and ground mounted solar generation
– impacting electricity supply, the company successfully capacity and 34 MWh of battery storage at 33 of
maintained system reliability, restricting customer minutes SA Water’s sites across the state.
lost to an average of 126 minutes in 2021.
A “Solar Sponge” Time-of-Use based tariff was SAPN workers conduct maintenance of critical infrastructure to
introduced to encourage consumers to spread out their maintain reliability and safety.
Victoria Power Networks beat regulatory targets for customer service and system
reliability.
Victoria Power Networks (VPN) through CitiPower
VPN commenced a new regulatory period during the
and Powercor Australia operates electricity year, providing a stable foundation for the next five years
distribution networks in Victoria, including the to enable reliable and safe electricity while investing in
Melbourne metropolitan area. the network infrastructure and technology needed to
fight climate change, such as rooftop solar, EVs, and
batteries. Customers will benefit from more affordable
Victoria Power Networks
power with residential network tariffs falling for both
Powercor and CitiPower customers in the first year of the
new regulatory period.
Power Assets Interest:
27.93% CitiPower and Powercor continued to experience
CitiPower Powercor steady growth in the number of customers connecting
Joined Since: Joined Since:
solar power systems to the network, with more than
188,800 connections as at 31 December 2021. Powercor
July 2002 September 2000
will install a 150kW/388kWh battery in Melbourne’s
Network Length: Network Length: fast-growing western suburbs to allow customers to
7,700 km 90,400 km supply power back to the community, reduce emissions
No. of Customers: No. of Customers: and make the most of the strong local rooftop solar
334,000 868,000 penetration in the area.
A solar-powered airport
To reduce its carbon footprint and operational costs and support sustainable growth, Melbourne Airport
commissioned Beon Energy Solutions, a VPN business, to build a 12-MW solar farm. It is one of Australia’s
largest customer-side installations. The solar farm has more than 38,000 individual solar panels installed in an
area of around 192,000 sq. m, equivalent to the size of about 26 football pitches.
Construction of the solar farm was completed in six months. It generates 17 GWh of electricity per annum,
enough to power all four passenger terminals at Melbourne airport – equivalent to nearly 15% of the airport’s
annual electricity consumption. The project is expected to deliver significant annualised energy cost savings, a
timely benefit, considering the impacts of COVID-19 on the aviation industry.
The batteries will benefit all local customers, whether they have solar or not, by storing energy from both UE’s
network and nearby solar panels, that can then be used locally when needed. They will charge at times of the
day when there is low electricity demand or when local rooftop solar systems are exporting into the network.
Power from the batteries can then be used later in the day to make more power available when demand is
high and solar systems are no longer generating.
The project helps sustain 99.99% electricity reliability and allows those with rooftop solar panels to get the
most out of their investment. In particular, the batteries will improve the quality and reliability of electricity
during peak demand days when everyone is using power – for example, on hot summer days.
When completed in 2023, the fleet of batteries will be able to store the electricity needed to support 5,000
homes. The innovative project provides an opportunity for customers to participate in a clean energy future.
In 2021, AEO undertook design upgrade of the Elaine AEO connects two additional wind farms to its Elaine Terminal
terminal station to support the reinforcement of the Station in Victoria, reaching an output of more than 500 MW.
transmission grid in western Victoria. Construction is
forecast to be completed by the end of 2024. The works
MAINLAND CHINA
Jinwan Power
THAILAND
CANADA
Meridian
Power Assets
Interest: Joined Since: Wind Turbine:
50% June 30 MW
2021
Sheerness power station converts to solely gas-fired operations.
HMLP’s Hardisty terminal has a peak throughput capacity of approximately 700,000 barrels per day and a storage capacity of 4.9 million barrels.
NETHERLANDS
NEW ZEALAND
Board of Directors
Executive Directors
FOK Kin Ning, Canning Chairman
Aged 70. Appointed to the Board in 1985 and became the Chairman in 2005. He is a Director of certain subsidiaries
of the Company. He is also the Chairman of HK Electric Investments Manager Limited (“HKEIML”) which is the
trustee-manager of HK Electric Investments (“HKEI”), HK Electric Investments Limited (“HKEIL”) and its wholly-owned
subsidiary, The Hongkong Electric Company, Limited (“HK Electric”). Mr. Fok is an Executive Director and Group
Co-Managing Director of CK Hutchison Holdings Limited (“CK Hutchison”), and the Deputy Chairman of
CK Infrastructure Holdings Limited (“CKI”). Mr. Fok is the Chairman of Hutchison Telecommunications (Australia) Limited,
Hutchison Telecommunications Hong Kong Holdings Limited (“HTHKH”), Hutchison Port Holdings Management Pte.
Limited (“HPHMPL”) which is the trustee-manager of Hutchison Port Holdings Trust (“HPH Trust”) and TPG Telecom
Limited, a Director of Cenovus Energy Inc. (“Cenovus Energy”), and a Deputy President of the Board of Commissioners of
PT Indosat Tbk. All the companies mentioned above, except HKEIML, HK Electric and HPHMPL, are listed companies, and
HPH Trust and HKEI are listed business/investment trusts. Mr. Fok acts as a Director of certain substantial shareholders of
the Company within the meaning of Part XV of the Securities and Futures Ordinance (“SFO”), and a Director of certain
companies controlled by certain substantial shareholders of the Company. Mr. Fok holds a Bachelor of Arts degree and a
Diploma in Financial Management, and is a Fellow of Chartered Accountants Australia and New Zealand.
Aged 64. Appointed to the Board and Chief Executive Officer in January 2014. He has been with the Group since June
1987. Mr. Tsai is the General Manager of Power Assets Investments Limited, a wholly-owned subsidiary of the Company.
He is also a Director or Alternate Director of most of the subsidiaries and certain joint ventures of the Company. Mr. Tsai
has been responsible for the Group’s investments outside Hong Kong since 1997. He holds a Bachelor of Applied Science
Degree in Mechanical Engineering, and is a Registered Professional Engineer and a Chartered Engineer.
Aged 59. Appointed to the Board in June 2012. Mr. Chan is a Director of most of the subsidiaries and certain
joint ventures of the Company. He is also an Executive Director of HKEIML which is the trustee-manager of
HKEI, and HKEIL, and a Director of HK Electric. Mr. Chan is an Executive Director and Chief Financial Officer
of CKI, a substantial shareholder of the Company within the meaning of Part XV of the SFO. Mr. Chan joined
the CK Group in January 1992. All the companies mentioned above, except HKEIML and HK Electric, are listed
companies, and HKEI is a listed investment trust. He also holds directorships in certain companies controlled by
certain substantial shareholders of the Company within the meaning of Part XV of the SFO. Mr. Chan is a fellow
of the Hong Kong Institute of Certified Public Accountants (“HKICPA”), a fellow of the Association of Chartered
Certified Accountants and also a member of the Institute of Certified Management Accountants (Australia).
Aged 63. Appointed to the Board in 1999, prior to which he was Finance Director of the Hutchison Property Group.
Mr. Hunter was Group Finance Director from 1999 to January 2006, and is a Director of certain joint ventures of the
Company. Mr. Hunter is currently Deputy Managing Director of CKI, a listed company and a substantial shareholder
of the Company within the meaning of Part XV of the SFO. Mr. Hunter also holds directorships in certain companies
controlled by certain substantial shareholders of the Company. Mr. Hunter holds a Master of Arts degree and a Master’s
degree in Business Administration and is a member of the Institute of Chartered Accountants of Scotland and of the
HKICPA. He has over 39 years of experience in accounting and financial management.
Aged 70. Appointed to the Board in 2005 as an Executive Director, and re-designated as a Non-executive Director
in August 2012 and as an Executive Director in January 2014. He was Group Finance Director from February 2006
to August 2012. Mr. McGee has held various legal, corporate secretarial and finance positions with the Group and
the CK Hutchison Group. He is also a Director or Alternate Director of certain subsidiaries and joint ventures of
the Company. Mr. McGee is currently the Managing Director of Hutchison Whampoa Europe Investments S.à r.l.
Mr. McGee holds a Bachelor of Arts degree and a Bachelor of Laws degree.
Aged 71. Appointed to the Board in 2005. He was Group Managing Director from January 2013 to January 2014.
Mr. Wan is a Director of most of the subsidiaries and certain joint ventures of the Company. He is also the Chief Executive
Officer and an Executive Director of HKEIL, a company listed together with HKEI, an Executive Director of HKEIML
which is the trustee-manager of HKEI and the Managing Director of HK Electric. He has worked for the Group since
1978, holding various positions including Director of Engineering (Planning & Development), Chief Executive Officer of
Powercor Australia Limited and CitiPower Pty., associate companies of the Group in Australia. Mr. Wan holds a Bachelor
of Science degree in Electrical Engineering and is also a Chartered Engineer. He is an Honorary Fellow of the Energy
Institute, a Fellow of the Institution of Engineering and Technology, an Honorary Fellow of The Hong Kong Institution of
Engineers and a Fellow of The Hong Kong Management Association. Mr. Wan is a member of the Audit Committee of
The University of Hong Kong. He was previously Vice Chairman of the Engineers Registration Board of Hong Kong.
Non-executive Directors
LEUNG Hong Shun, Alexander
Aged 59. Appointed to the Board in May 2021. Mr. Leung is a practicing solicitor and notary public in Hong Kong and a
China-Appointed Attesting Officer appointed by the Ministry of Justice of the People’s Republic of China. He is presently
a partner of Messrs. S.H. Leung & Co., Solicitors. Mr. Leung holds a Bachelor of Laws degree.
Aged 57. Appointed to the Board in 1994 and re-designated from an Executive Director to a Non-executive Director
in January 2014. He is also a Director of a joint venture of the Company. He is the Chairman and Group Co-Managing
Director of CK Hutchison, and the Chairman and Managing Director, and the Chairman of the Executive Committee
of CK Asset Holdings Limited. Mr. Li is the Chairman of CKI and CK Life Sciences Int’l., (Holdings) Inc. Mr. Li is also
a Non-executive Director of HKEIML which is the trustee-manager of HKEI, a Non-executive Director and the Deputy
Chairman of HKEIL and a Director of HK Electric. All the companies mentioned above, except HKEIML and HK Electric,
are listed companies, and HKEI is a listed investment trust. Mr. Li is also the Deputy Chairman of Li Ka Shing Foundation
Limited and Li Ka Shing (Global) Foundation, the Member Deputy Chairman of Li Ka Shing (Canada) Foundation,
and a Director of The Hongkong and Shanghai Banking Corporation Limited. He serves as a member of the Standing
Committee of the 13th National Committee of the Chinese People’s Political Consultative Conference of the People’s
Republic of China. He is also a member of the Chief Executive’s Council of Advisers on Innovation and Strategic
Development of the Hong Kong Special Administrative Region, and Vice Chairman of the Hong Kong General Chamber
of Commerce (the “Chamber”). Mr. Li is the Honorary Consul of Barbados in Hong Kong. He acts as a Director of
certain substantial shareholders of the Company within the meaning of Part XV of the SFO, and a Director of certain
companies controlled by certain substantial shareholders of the Company. Mr. Li holds a Bachelor of Science degree in
Civil Engineering, a Master of Science degree in Civil Engineering and a degree of Doctor of Laws, honoris causa (LL.D.).
Aged 69. Appointed to the Board in January 2014. Mr. Ip is an international banking and real estate professional
with over 30 years of banking experience in United States, Asia and Hong Kong. He was formerly Managing Director
of Citigroup and Managing Director of Investments at Merrill Lynch (Asia Pacific). Mr. Ip is Adjunct Professor of and
advisor to a number of universities in Hong Kong, United States and Macau. He is a Council Member of The Hong Kong
University of Science and Technology and a member of the Court of City University of Hong Kong. Mr. Ip is an Honorary
Fellow of Vocational Training Council, an Honorary Fellow of and a Beta Gamma Sigma Honoree at City University of
Hong Kong, and a Beta Gamma Sigma Honoree at The Hong Kong University of Science and Technology. Mr. Ip is
an Independent Non-executive Director of Eagle Asset Management (CP) Limited which is the manager of Champion
Real Estate Investment Trust, Lifestyle International Holdings Limited, New World Development Company Limited and
HTHKH. All the companies mentioned above except for Eagle Asset Management (CP) Limited are listed companies,
and Champion Real Estate Investment Trust is a listed real estate investment trust. Mr. Ip was formerly an Executive
Director and the Chief Executive Officer of LHIL Manager Limited which is the trustee-manager of Langham Hospitality
Investments, and Langham Hospitality Investments Limited, and an Independent Non-executive Director of Hopewell
Holdings Limited and TOM Group Limited. Mr. Ip holds a Bachelor of Science degree in Applied Mathematics and
Computer Science, a Master of Science in Applied Mathematics and a Master of Science in Accounting and Finance. He
is the Chairman of the Board of Governors of World Green Organisation.
Aged 65. Appointed to the Board in May 2021. Ms. Koh has more than 30 years of working experience in the areas of
operations management, technology, financial and business re-engineering. Ms. Koh is an Independent Non-executive
Director of ARA Asset Management (Fortune) Limited which is the manager of Fortune Real Estate Investment Trust,
a listed real estate investment trust. Ms. Koh is also an Independent Non-executive Director of HKEIML which is the
trustee-manager of HKEI, and HKEIL, and a Director of HK Electric. Ms. Koh was previously the Regional Accountant
(Alpha Asia Pacific) of Alpha International, a non-profit organisation, from 2012 to 2015 in charge of the finance
functions for Alpha Asia Pacific region, Alpha Singapore and AAP Publishing Pte. Ltd. Prior to this role she was a Director
with Future Positive Pte. Ltd. working extensively on information technology and business re-engineering consultancy
areas. Ms. Koh also worked for American International Assurance Co. Ltd. for 15 years during the period from 1986 to
2000, with her last position as Vice President – Quality Support & Operations Management. Ms. Koh holds a Master of
Science in Management Science and Operational Research, a Bachelor of Arts Degree (Honours) in Accounting, and a
Diploma from Institute for the Management of Information Systems (previously known as Institute of Data Processing
Management, UK) and a Fellow of Life Management Institute (USA).
Aged 71. Appointed to the Board in March 2020. Mr. Lui has over 30 years of experience in project management. He
joined the CK Group in 1978, with his last position before retirement in 2006 as the Senior Project Manager of the
Development Department of Cheung Kong (Holdings) Limited (which was then listed company). Mr. Lui holds a Higher
Certificate in Civil Engineering and a Diploma in Management Studies
Aged 88. Appointed to the Board in 1985. Mr. Shea has been an Independent Non-executive Director of HKEIML which
is the trustee-manager of HKEI, and HKEIL which is a company listed together with HKEI, and a Director of HK Electric,
since October 2015. Mr. Shea is a solicitor of England and Wales and of Hong Kong.
Aged 67. Appointed to the Board in June 2014. He is a member of Standing Committee of the Chinese People’s
Political Consultative Conference National Committee. Mr. Wu was formerly the chairman of the Hong Kong Hospital
Authority, the chairman of the Bauhinia Foundation Research Centre, a member of the Task Force on Land Supply
of the Hong Kong Special Administrative Region, the Deputy Chairman and an executive director of Sincere Watch
(Hong Kong) Limited, and an independent non-executive director of Fidelity Funds and Agricultural Bank of China
Limited. He also served as the chairman, and is currently a member of the Chamber Council, of the Chamber. Mr. Wu
is a member of the Chief Executive’s Council of Advisers on Innovation and Strategic Development of the Hong Kong
Special Administrative Region. Mr. Wu is a member of the People’s Republic of China State Council’s Medical Reform
Leadership Advisory Committee, a member of the Public Policy Advisory Committee and an advisor of the National
Health Commission of the People’s Republic of China, the Principal Advisor to the State Administration of Traditional
Chinese Medicine of the People’s Republic of China and a member of the Chinese Medicine Reform and Development
Advisory Committee of the People’s Republic of China. He is also the Chief Advisor to MUFG Bank, Ltd., the Chairman
of the China Oxford Scholarship Fund and an Honorary Professor of Faculty of Medicine of the Chinese University of
Hong Kong and Peking Union Medical College Hospital. Mr. Wu was the Chairman of the board of directors and is
currently an independent non-executive director of China Resources Medical Holdings Company Limited. He is also the
Chairman and a non-executive director of Clarity Medical Group Holding Limited, an independent non-executive director
of Guangdong Investment Limited, China Taiping Insurance Holdings Company Limited, CStone Pharmaceuticals,
Venus Medtech (Hangzhou) Inc., Ocumension Therapeutics and Sing Tao News Corporation Limited. All the companies
mentioned above are listed companies. Mr. Wu is an Honorary Fellow of Hong Kong College of Community Medicine.
He is a Fellow of the HKICPA and the Institute of Chartered Accountants in England and Wales, and an Honorary
Chairman of The Institute of Certified Management Accountants (Australia) Hong Kong Branch.
Management Team
CHAN Kee Ham, Ivan
Aged 59. Chief Financial Officer, has been with the Group since May 2012. He is also the Chief Planning and
Investment Officer of CK Infrastructure Holdings Limited. He has over 35 years of experience in investment, banking and
finance. He holds a Bachelor’s degree in Science, a Bachelor’s degree in Chinese Law and a Master’s degree in Business
Administration.
Aged 53. Assistant General Manager (Business Development), has been with the Group since September 1990. He is
responsible for business development activities which include both acquisition and greenfield development globally. He
holds a Bachelor of Science degree in Mechanical Engineering.
Jeffrey KWOK
Aged 64. Senior Manager (International Business), joined the Group in 1981 and has been engaged in the development
of various power and renewable projects. He is currently responsible for managing the Group’s global investments with
a focus on their sustainability development. He holds a Master of Science degree in Engineering and is a Chartered
Engineer in the United Kingdom, a member of The Hong Kong Institution of Engineers, the Institution of Mechanical
Engineers and the Energy Institute in the United Kingdom.
Aged 52. Group Legal Counsel and Company Secretary, has been with the Group since November 2008. Mr. Ng is also
the Group Legal Counsel and Company Secretary of HK Electric Investments Manager Limited (the trustee-manager of
HK Electric Investments) and HK Electric Investments Limited. He has over 20 years of experience in legal, regulatory and
compliance fields. Mr. Ng holds a Bachelor’s degree in Science and a Bachelor’s degree in Laws. He was admitted as a
solicitor in Hong Kong and in England and Wales.
Aged 57. Senior Manager (Business Development), has been with the Group since December 1993. He is responsible
for initiation of the Group’s investments globally. He holds a Bachelor of Engineering degree in Mechanical Engineering,
a Master of Science degree in Building Services Engineering and a Master of Business Administration degree. He is a
Chartered Engineer in the United Kingdom, a member of The Hong Kong Institution of Engineers and the Institution of
Mechanical Engineers in the United Kingdom.
YU Ka Man, Jenny
Aged 49. Senior Manager (International Business), joined the Group in September 2016 and has over 20 years of
experience in energy industry with international business exposure. She is responsible for asset management of the
Group’s investments globally, and assumes active role in new energy development projects. Miss Yu holds a Master of
Business Administration degree. She is a fellow of the Association of Chartered Certified Accountants, a member of the
Hong Kong Institute of Certified Public Accountants and a member of The Hong Kong Institute of Directors. Miss Yu
is also a Certified Environmental, Social and Governance Analyst of The European Federation of Financial Analysts
Societies.
The Company has complied with the applicable code The Company is committed to ensuring the long-term
provisions in the Corporate Governance Code set out sustainability of the Group’s business and has formulated
in Appendix 14 of the Rules Governing the Listing the Sustainability Policy, which is published on the
of Securities on The Stock Exchange of Hong Kong Company’s website, to set out the sustainability
Limited (the “Listing Rules”) throughout the year ended approach for its operations.
31 December 2021.
Under the leadership of the Board, the Company instils Board Proceedings
these vision, missions, core values and sustainability The Board have four regular meetings each year at
approach in our staff and stakeholders while integrating approximately quarterly intervals and additional meetings
them into the Group’s day-to-day operations. Information will be held when warranted. Regular meetings are
on the Company’s performance and the basis on which scheduled during the last quarter of the preceding year
the Company generates value over the longer term and providing Directors with adequate time to plan their
the strategy for delivering the above vision and missions schedules to attend. The Directors may attend meetings
are set out in the Chairman’s Statement on pages 4 to 6, in person, by telephone or other electronic means in
the Long-term Development Strategy on page 7 and the accordance with the Company’s articles of association.
CEO’s Report on pages 10 to 29 of the Annual Report. Throughout the year, the Directors also consider and
approve matters by way of written resolutions, which
Board of Directors are circulated to Directors together with explanatory
The Board, led by the Chairman, is collectively responsible briefings from the Chief Executive Officer or the
for the management and operations of the Company. Company Secretary as required. Directors are required
Its responsibilities include approval and monitoring to declare their interests, if any, in the matters to be
of Group-wide strategies and policies, approval of considered by them during board meetings and in the
annual budgets and business plans, evaluation of circular resolutions.
the performance of the Group, and oversight of the
management. Management, led by the Chief Executive Directors receive at least fourteen days prior written
Officer, is responsible for the day-to-day operations of notice of a regular meeting and may propose matters
the Group. The senior management of the Company for discussion to be included in the agenda. An agenda
comprises the Executive Directors. with supporting board papers is sent to Directors no less
than three days prior to a regular meeting. The Company
Directors at all times have full and timely access to Secretary assists the Chairman in seeing that Directors
information of the Group, including board papers receive adequate information on each matter set out in
and related materials. A financial summary outlining the agenda and acts as co-ordinator for management in
the Group’s financial position and performance and providing clarification sought by Directors.
containing the actual and budgeted results from
different operations, with major variances explained, is The minutes of Board meetings are prepared by the
sent to Directors each month for their review. Company Secretary with details of the decisions reached,
any concerns raised and dissenting views expressed. The
Each Director has independent access to the draft minutes are sent to all Directors for their comments.
management team for information on the Group and The final minutes are kept by the Company Secretary and
unrestricted access to the services of the Company available for inspection by Directors. Copies are sent to
Secretary on governance matters and board procedures. Directors for their records within a reasonable time after
There is a procedure for Directors to seek independent each meeting. This arrangement also applies to meetings
professional advice whenever deemed necessary by of the board committees.
them at the expense of the Company.
Appointment and re-election
The Company has arranged insurance coverage in All Directors have been appointed on annual
respect of directors’ liability for all Directors. twelve-month basis (save for the initial period which
is for a period up to 31 December in the year of
The Board currently comprises six Executive Directors, appointment), subject to retirement from office by
two Non-executive Directors and five Independent rotation and re-election by shareholders at the annual
Non-executive Directors. Their names and biographical general meeting once every three years pursuant to the
details are set out in the Board of Directors and articles of association of the Company. Any Director
Management Team section on pages 30 to 34 of the appointed to fill the casual vacancy shall hold office until
Annual Report. An updated list of Directors containing the next following general meeting and in the case of an
biographical information is maintained on the website of addition, until the next annual general meeting, and shall
the Company. The names of all Directors and their role be eligible for re-election at that meeting.
and function are posted on the website of Hong Kong
Exchanges and Clearing Limited (“HKEX”).
Directors retiring by rotation at the forthcoming As provided in these policies, appointment to the
annual general meeting are Mr. Fok Kin Ning, Canning Board should be based on merit and attributes that the
and Mr. Chan Loi Shun. Ms. Koh Poh Wah and selected candidate will bring to the Board with an aim
Mr. Leung Hong Shun, Alexander, who were appointed to build an effective and complementary board with the
as additions to the Board subsequent to the last annual skills, experience, expertise and diversity of perspectives
general meeting, will also retire at the forthcoming appropriate for the Group’s businesses, and taking into
annual general meeting. All the retiring Directors offer consideration the benefits of various aspects of diversity,
themselves for re-election. Information relating to these including gender, age, ethnicity, cultural and educational
Directors required to be disclosed under the Listing background, professional experience and qualifications
Rules is contained in the circular to be despatched to and other factors that may be relevant from time to
shareholders together with this Annual Report. time. The Nomination Committee will consider and make
recommendations to the Board on the appointment of
None of the Directors has a service contract which is additional, replacement or re-electing directors based on
not determinable by the Company within one year these factors, and where an additional or replacement
without payment of compensation (other than statutory Directors is required, deploy multiple channels for
compensation). identifying suitable candidates, including referral from
Directors, shareholders, management, advisors and
Nomination and Diversity external executive search firms. Shareholders may
The Company recognises the importance of having nominate a person other than a retiring Director to
qualified and competent Directors that possess a stand for election as a Director at any general meeting in
balance of skill set, experience, expertise and diversity accordance with article 122 of the Company’s articles of
of perspectives appropriate for its strategies, which can association, the procedures for which are posted on the
enhance decision-making capability and the overall Company’s website.
effectiveness of the Board to achieve corporate strategy
as well as promote shareholder value. During the year, the Board is pleased to welcome a
female Independent Non-executive Director in joining
The full Board is ultimately responsible for reviewing them on 13 May 2021, and will continue to embrace
the structure, size, diversity profile and skills matrix gender diversity of Directors.
of the Board, appointment of new Directors and
succession plan for Directors. They have delegated The diversity profile of the Board as at 31 December
their responsibility to the Nomination Committee of 2021 is as follows:
the Company, and established the Director Nomination
Policy and the Board Diversity Policy which are published
on the Company’s website, to provide guidance on
the approach and procedure for these processes.
0 1 2 3 4 5 6 7 8 9 10 11 12 13
No. of Directors
During 2021, the number of board and committee meetings and the attendance of each Director at these meetings
and the annual general meeting are as follows:
Meetings
between Annual
Chairman and General
Audit Remuneration Nomination Sustainability Independent Meeting
Board Committee Committee Committee Committee Non-executive held on
Directors Meetings Meetings Meeting Meeting Meetings Directors 12 May 2021
Executive Directors
Fok Kin Ning, Canning (Chairman) 4/4 – 1/1 – – 3/3 3
Tsai Chao Chung, Charles
(Chief Executive Officer) 4/4 – – – 2/2 – 3
Chan Loi Shun 4/4 – – – 2/2 – 3
Andrew John Hunter 4/4 – – – – – 3
Neil Douglas McGee 4/4 – – – – – 3
Wan Chi Tin 4/4 – – – – – 3
Non-executive Directors
Leung Hong Shun, Alexander 2/2 – – – – – –
(Appointed on 13 May 2021)
Victor T K Li 3/4 – – 1/1 – – 3
The Directors have each confirmed that he/she has made contributions to the Group that are commensurate with
his/her role and board responsibilities, and devoted sufficient time and attention to the affairs of the Group, and
disclosed their offices held in other public companies and organisations and updated the Company on any subsequent
changes in a timely manner.
Independence
The Board must be satisfied that an Independent Non-executive Director does not have any material relationship with
the Group. It is guided by the criteria of independence as set out in the Listing Rules in determining the independence
of Independent Non-executive Directors.
All Independent Non-executive Directors of the Company have each provided a confirmation of his/her independence
(which also covers his/her immediate family members) to the Company for the financial year 2021 pursuant to Rule 3.13
of the Listing Rules. The Board continues to consider these Directors to be independent.
Fok Kin Ning, Canning CK Hutchison Holdings Limited Group Co-Managing Director
CK Infrastructure Holdings Limited Deputy Chairman
Cenovus Energy Inc. Director
Chan Loi Shun CK Infrastructure Holdings Limited Executive Director and Chief Financial Officer
Andrew John Hunter CK Infrastructure Holdings Limited Deputy Managing Director
Victor T K Li CK Asset Holdings Limited Chairman and Managing Director
CK Hutchison Holdings Limited Chairman and Group Co-Managing Director
CK Infrastructure Holdings Limited Chairman
The Board is of the view that the Group is capable of carrying on the business of energy and utility-related investment
independent of, and at arm’s length from the businesses of the above companies. When making decisions on the
Group’s business and in the performance of their duties as Directors of the Company, the above Directors have acted
and will act in the best interest of the Group and its shareholders.
Directors’ Training and skills on the roles, functions and duties of a listed
The Company Secretary updates Directors on the latest company director. Directors also attend external forums
developments and changes to the Listing Rules and the or briefing sessions, or complete courses organised
applicable legal and regulatory requirements necessary in by professional bodies on relevant topics from time to
discharging their duties. The Company also arranges and time, which count towards their continuous professional
provides continuous professional development training development training.
and relevant materials to Directors to help ensure they
are apprised of the latest changes in the commercial, Directors have provided to the Company their records
legal and regulatory environment in which the Group of continuous professional development training during
conducts its business and to refresh their knowledge 2021, and they have participated in the following
training activities:
Directors’ Interests and Short Positions in Shares, Underlying Shares and Debentures
As at 31 December 2021, the interests or short positions of the Directors and chief executives of the Company in the
shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning
of Part XV of the Securities and Futures Ordinance (“SFO”)) which were notified to the Company and The Stock
Exchange of Hong Kong Limited (the “Stock Exchange”) pursuant to Divisions 7 and 8 of Part XV of the SFO (including
interests and short positions which the Directors and the chief executives of the Company were deemed or taken to
have under such provisions of the SFO), or which were recorded in the register required to be kept by the Company
pursuant to section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the
Model Code were as follows:
Number of Approximate %
Nature of Share Stapled of Issued Share
Name of Director Capacity Interests Units Held Stapled Units
Notes:
(1) Such share stapled units of HK Electric Investments and HK Electric Investments Limited (“HKEI”) comprise:
(a) 2,700,000 share stapled units of HKEI held by a wholly-owned subsidiary of Li Ka Shing (Global) Foundation (“LKSGF”).
By virtue of the terms of the constituent documents of LKSGF, Mr. Victor T K Li may be regarded as having the ability to
exercise or control the exercise of one-third or more of the voting power at general meetings of LKSGF; and
(b) 5,170,000 share stapled units of HKEI held by Li Ka Shing Foundation Limited (“LKSF”). By virtue of the terms of the
constituent documents of LKSF, Mr. Victor T K Li may be regarded as having the ability to exercise or control the exercise of
one-third or more of the voting power at general meetings of LKSF.
(2) Such share stapled units of HKEI are held by a company which is equally owned by Mr. Fok Kin Ning, Canning and his wife.
Save as disclosed above, as at 31 December 2021, none of the Directors or chief executives of the Company had any
interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated
corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept by the
Company under section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant
to the Model Code.
Audit Committee are available at all of these meetings to assist with any
information and resources as may be required to enable
The Audit Committee comprises four Independent committee members to carry out their functions.
Non-executive Directors. It is chaired by Mr. Ip
Yuk-keung, Albert, and the other members are Representatives from KPMG, the external auditor, were
Ms. Koh Poh Wah (appointed on 13 May 2021), invited to attended two of the meetings to discuss the
Mr. Ralph Raymond Shea and Mr. Wu Ting Yuk, Anthony. 2020 audited financial statements, the 2021 audit plan
None of the committee members is a partner or former and various accounting matters with the committee
partner of the Group’s external auditor. members.
The Audit Committee reports directly to the Board, Subsequent to the financial year end, the Audit
and acts as the key representative body for overseeing Committee reviewed at a meeting in March 2022 the
relations with the external auditor. Its principal Group consolidated financial statements for the year
responsibilities are to assist the Board in fulfilling its ended 31 December 2021 and Annual Report 2021,
duties through the review of the Group’s financial and resolved to recommend the approval of the Group
reporting, the review of financial information, the consolidated financial statements and the re-appointment
consideration of issues relating to external auditor and of KPMG as the Company’s external auditor for 2022.
their appointment, the review and development of
corporate governance functions and risk management
and internal control systems. The Audit Committee also
Nomination Committee
oversees the Company’s whistleblowing procedure. The Nomination Committee comprises three members,
Committee members may seek independent professional a majority of which are Independent Non-executive
advice where necessary to discharge their duties. The Directors. It is chaired by Mr. Ip Yuk-keung, Albert
terms of reference of the Audit Committee is published (an Independent Non-executive Director), and the
on the Company’s website and HKEX’s website. other members are Mr. Victor T K Li (a Non-executive
Director) and Mr. Ralph Raymond Shea (an Independent
The Audit Committee held four meetings in 2021. Non-executive Director).
During the meetings, the committee reviewed and
considered matters including the interim and annual The Nomination Committee reports directly to the Board.
results, the interim and annual reports, the quarterly Its principal responsibilities are to review the structure,
financial highlights, the risk management reports and size, diversity profile and skills matrix of the Board,
the assessment and declarations in respect of the to facilitate the selection and nomination process, to
effectiveness of the risk management and internal assess the independence of Independent Non-executive
control systems and the sustainability governance and Directors having regard to the criteria under the Listing
management, the effectiveness of the Company’s internal Rules, and to make recommendations to the Board on
audit function, the internal audit plan and all internal the appointment or re-appointment of Directors and
audit reports compiled during the year, compliance succession planning for Directors, as guided by the
of the Deed of Non-competition with HK Electric process and criteria in Director Nomination Policy and
Investments Limited, the corporate governance structure Board Diversity Policy as mentioned earlier in this report.
and compliance with the Corporate Governance Code Committee members may seek independent professional
and the Environmental, Social and Governance Reporting advice where necessary to discharge their duties. The
Guide, the continuous professional development terms of reference of the Nomination Committee are
activities undertaken by Directors and senior managers, published on the Company’s website and HKEX’s
the adequacy of resources, qualifications and trainings website.
of accounting and internal audit staff, auditor related
matters (including fee, engagement and independence). The Committee held a meeting in March 2021. During
In addition, the committee also reviewed and considered the meeting, members reviewed the structure, size
the Group’s outstanding litigation and claims, and the and composition of the Board, the implementation
statistics and registers on illegal or unethical behaviour of and effectiveness of the Board Diversity Policy, and
the Group (including whistleblowing cases). Management the independence of the Independent Non-executive
Directors, and resolved to recommend the nomination respect of the 2021 financial year and their remuneration
of all the retiring Directors standing for re-election at the for 2022. No Director and member of the management
2021 annual general meeting. During the year, members team participated in the determination of his/her own
also considered and recommended the appointments of remuneration. The Committee, authorised by the Board,
Ms. Koh Poh Wah and Mr. Leung Hong Shun, Alexander also reviewed and approved the 2022 wage and salary
as an Independent Non-executive Director and a review proposal for the Group’s employees.
Non-executive Director respectively.
The emoluments paid to each Director for the 2021
Remuneration Committee financial year are shown in note 11 to the financial
statements on pages 92 to 94 of the Annual Report.
The Remuneration Committee comprises three members, The remuneration paid to members of the management
a majority of which are Independent Non-executive team for the 2021 financial year is disclosed by bands in
Directors. It is chaired by Mr. Ralph Raymond Shea (an the same note.
Independent Non-executive Director), and the other
members are Mr. Fok Kin Ning, Canning (the Chairman
of the Board) and Mr. Lui Wai Yu, Albert (an Independent
Sustainability Committee
Non-executive Director). The Sustainability Committee comprised three members.
It is chaired by Mr. Tsai Chao Chung, Charles (the Chief
The Remuneration Committee reports directly to the Executive Officer), and the other members are Mr. Chan
Board. Its principal responsibilities include the review and Loi Shun (an Executive Director) and Mr. Ip Yuk-keung,
consideration of the Company’s policy for remuneration Albert (an Independent Non-executive Director).
of Directors and management team, and the
determination of their individual remuneration packages. The Sustainability Committee reports directly to the
The terms of reference of the Remuneration Committee Board. Its principal responsibilities are to oversee
are published on the Company’s website and the HKEX’s management of, and advise the Board on the
website. development and implementation of the sustainability
initiatives of the Group, including reviewing the related
The Board has adopted a Policy on Remuneration of policies and practices, and assessing and making
Full Time Directors and Management Team to provide recommendations on matters concerning the Group’s
guidance on the determination of remuneration sustainability development and risks.
of Executive Directors and management team,
with reference to the Company’s performance and The Group’s Sustainability Management Committee,
profitability, industry remuneration benchmarks and a management-level committee chaired by the Chief
prevailing market conditions. Remuneration should Executive Officer, supports the Sustainability Committee
be performance-based and, coupled with an incentive to discharge its duties and drives and coordinates
system, competitive to attract and retain talented the Group’s sustainability efforts, and promotes
employees. understanding of sustainability within the Group.
Committee members may, if considered necessary, seek
In the discharge of its duties the Remuneration any information required from management or have
Committee is assisted by relevant remuneration data access to independent professional advice. The terms of
and market conditions provided by the human resources reference of the Sustainability Committee are published
function. Committee members may, if considered on the Company’s website and HKEX’s website.
necessary, seek independent professional advice to
perform their duties. The Group does not have any The Sustainability Committee held two meetings in 2021.
equity-based remuneration during the year. During the meetings members considered the Group’s
sustainability framework and its sustainability objectives,
The Committee held a meeting in December 2021. including the United Nations Sustainable Development
During the meeting and under delegated responsibility Goals action plan, and material sustainability issues.
from the Board, Committee members considered and They also assessed the Group’s sustainability strategies,
determined the performance-based bonus payable to the risks and opportunities, priorities, initiatives, goals
full time Executive Directors and management team in and performance in health and safety, environmental
management and other sustainability areas, and
44 Power Assets Holdings Limited
Business Review Corporate Governance Financial Statements Other Information
At the meetings held in March and July 2021, the Executive Directors review operational and financial
Audit Committee reviewed the effectiveness of the risk reports and key operating statistics and hold regular
management and internal control systems of the Group meetings with responsible managers to review their
for the year 2020 and for the half year ended 30 June reports.
2021 respectively, and considered the systems effective
and adequate. Executive Directors and senior executives are appointed
to the boards and board committees of all major
The Company’s risk management and internal control operating subsidiaries, associates and joint ventures for
functions outlined above is supported by the services monitoring the operations of those companies. There is a
including the relevant financial and accounting, treasury comprehensive system for reporting information by those
and internal audit services it shared with HK Electric companies to the Company’s management.
Investments Limited, pursuant to an agreement dated
14 January 2014 with such company. Budgets are prepared annually by the management and
are subject to review and approval firstly by the Chief
Risk Management and Internal Control Executive Officer and then by the Board. Re-forecasts of
operating results for the current year are prepared on a
Environment quarterly basis, reviewed for differences to the budget
Effective risk management is fundamental to the and for approval by the Executive Directors.
achievement of the corporate strategic objectives, and an
enterprise risk management policy is in place to outline The Group has established guidelines and procedures
the framework and processes adopted by the Group for the approval and control of expenditure. Operating
and provide top-down and bottom-up approaches expenditure is subject to overall budget control, with
to identify, assess, mitigate and monitor key risks at approval levels being set by reference to the level
corporate and business unit levels in a pro-active and of authority of each executive and officer. Capital
structured manner. These key risks include risks in expenditure is also subject to overall control within the
topics such as climate change, supply reliability, and approved budget of individual projects with more specific
health and safety which the Group considered to be key control and approval being required for overspending,
material environmental, social and governance issues. unbudgeted expenditure and material expenditure within
More details are given in the Risk Management and Risk the approved budget. Monthly reports of actual versus
Factors on pages 55 to 59 of the Annual Report. budgeted and approved expenditure are also reviewed.
The management encourages a risk aware and control The treasury function, reporting to an Executive
conscious environment, setting objectives, performance Director, oversees the Group’s investment and funding
targets or policies for the management of key risks activities. It regularly reports on the Group’s cash and
including strategic planning, business operations, liquid investments, borrowings, outstanding contingent
acquisitions, investments, legal and regulatory liabilities and financial derivatives commitments. The
compliance, expenditure control, treasury, environment, Board has approved and adopted a treasury policy
health and safety, and customer service. The Company governing the management of the financial risks of the
has a well-established organisational structure with Group (including interest rate risk, foreign exchange risk
defined levels of responsibility and authority and and liquidity risk) and the operational risks associated
reporting procedures. There are inherent limitations in with such risk management activities. The treasury policy
any systems of risk management and internal control and is reviewed by the Audit Committee from time to time.
accordingly the Group’s risk management and internal
control systems are designed to manage rather than The legal and company secretarial function reports to
eliminate the risk of failure to achieve business objectives, the Chief Executive Officer, and oversees, among other
and can only provide reasonable and not absolute things, the Group’s compliance of the Listing Rules and
assurance against material misstatement or loss. other legal and regulatory requirements.
The internal audit function, reporting to an Executive self-assessment with reference to five components
Director and the Audit Committee, provides independent of internal control, namely, Control Environment,
assurance as to the existence and effectiveness of the Risk Assessment, Control Activities, Information and
risk management activities and internal controls in the Communication, and Monitoring Activities. The second
operations of the Group’s business units. Staff members tier of internal control self-assessment at key business
are from a wide range of disciplines including accounting, process level is also conducted to assess the effectiveness
engineering and information technology. Using risk of controls over the operations within their areas of
assessment methodology and taking into account the accountability and compliance with applicable laws and
scope and nature of the Group’s activities and changes in regulations. These assessments form part of the bases
operating environment, internal audit prepares its yearly on which the Chief Executive Officer and an Executive
audit plan which is reviewed and approved by the Audit Director formulate their opinion on risk management
Committee. Its internal audit reports on the Group’s and internal control systems and report their results to
operations are also reviewed and considered by the Audit the Audit Committee and the Board.
Committee. The scope of work on the Group’s business
units performed by internal audit includes financial, The Chief Executive Officer and other Executive
operations and information technology review, recurring Directors also have the responsibility of developing and
and ad hoc audit, fraud investigation, productivity implementing risk mitigation strategies including the
efficiency review and laws and regulations compliance deployment of insurance to transfer the financial impact
review. Internal audit follows up audit recommendations of risk. The insurance function of HK Electric Investments
on implementation by business units and the progress is Limited supports the Group to arrange appropriate
reported to the Audit Committee regularly. insurance coverage.
With the assistance of the internal audit function, the Reports from the external auditor on material
Chief Executive Officer and an Executive Director review, non-compliance with procedures and significant internal
among other things, the profile of the significant risks control weaknesses, if any, are presented to the Audit
and how these risks have been identified, evaluated Committee. These reports are considered and reviewed
and managed, the changes since the last assessment and appropriate action is to be taken if required.
in the nature and extent of significant risks, and the
Group’s ability to respond to changes in its business Established guidelines for the acquisition of new
and the external environment, the scope and quality businesses, including those on detailed appraisal and
of management’s ongoing monitoring of the risk review procedures and due diligence processes, are in
management and internal control systems. In addition, place.
they review the work of internal audit function and
other assurance providers, the extent and frequency There are also procedures including pre-clearance on
of communication of monitoring results to the Audit dealing in the Group’s securities by designated Directors,
Committee which enables it to assess control of the notification of regular blackout period and securities
Group and the effectiveness of risk management, any dealing restrictions to Directors and relevant employees,
significant failings or weaknesses in internal control and dissemination of information for specified purpose
that have been reported, the necessary actions that are and on a need-to-know basis have been implemented to
being taken promptly to remedy any significant failings guard against possible mishandling of inside information
or weaknesses, and the effectiveness of the Group’s within the Group.
processes for financial reporting and Listing Rules
compliance.
Shareholder Communication
The Company has established the Shareholder
Communication Policy, which is published on the website
of the Company, to lay down the framework and put
in place a range of communication channels between
themselves and shareholders and investors to promote
effective communication.
Substantial Shareholders
Long Positions in Shares of the Company
Number of Approximate %
Name Capacity Shares Held of Shareholding
Other Persons
(a) Long Positions in Shares and Underlying Shares of the Company
Number of Shares/
Underlying Approximate %
Name Capacity Shares of Shareholding
Number of Shares/
Underlying Approximate %
Name Capacity Shares of Shareholding
Notes:
(1) These are direct or indirect wholly-owned subsidiaries of Hyford Limited (“Hyford”) and their interests are duplicated in the
same 767,499,612 shares of the Company held by Hyford described in Note (2) below.
(2) CK Infrastructure Holdings Limited (“CKI”) is deemed to be interested in the 767,499,612 shares of the Company as referred
to in Note (1) above as it holds more than one-third of the issued share capital of Hyford indirectly. Its interests are duplicated
in the interest of CK Hutchison Holdings Limited (“CK Hutchison”) in the Company described in Note (3) below.
(3) CK Hutchison is deemed to be interested in the 767,499,612 shares of the Company as referred to in Note (2) above as
it holds more than one-third of the issued voting shares of CK Hutchison Global Investments Limited (“CKHGI”). Certain
subsidiaries of CKHGI hold more than one-third of the issued voting shares of Hutchison Infrastructure Holdings Limited which
in turn holds more than one-third of the issued share capital of CKI.
(4) Such long position includes derivatives interests in 326,000 underlying shares of the Company derived from unlisted and cash
settled derivatives.
(5) Such short position includes derivatives interests in 227,500 underlying shares of the Company derived from unlisted and cash
settled derivatives.
Save as disclosed above, as at 31 December 2021, there was no other person (other than Directors or chief executives
of the Company) who had interests or short positions in the shares or underlying shares of the Company as recorded
in the register required to be kept by the Company under section 336 of the SFO, or as otherwise notified to the
Company and the Stock Exchange.
Connected Transaction 1280164 B.C. also entered into a funding and acquisition
support agreement (the “Funding Agreement”),
Financial assistance and acquisition support whereby, among other things, CKI and the Company
agreed to provide, or cause the provision of, an amount
in relation to the acquisition of the
up to CAD70 million by way of loan to CPHI and/or
Okanagan Wind projects by CPHI subscription of new shares of CPHI on a 50:50 basis to
As announced by the Company on 5 February 2021, fund the Acquisition.
Canadian Power Holdings Inc. (“CPHI”) and 1280164
B.C. Ltd. (“1280164 B.C.”), both indirectly held as to CPHI is considered a material joint venture of the
50% each by the Company and CKI, entered into a Company. Each of CPHI and 1280164 B.C. is indirectly
share and debt purchase agreement on 4 February 2021 held as to 50% by CKI, a substantial shareholder of the
in relation to the acquisition of all the issued shares of Company, and is a connected person of the Company.
PSS Renewables Holdings Inc. (“PSS Holdings”) and the The transactions contemplated under the Funding
debt of PSS Renewables LP (which is wholly owned by Agreement therefore constituted connected transactions
PSS Holdings) (the “Acquisition”). PSS Holdings and PSS of the Company under Chapter 14A of the Listing Rules
Renewables LP indirectly own and operate the Okanagan and are subject to the reporting and announcement
Wind projects, comprising the Pennask Wind Farm requirements under Chapter 14A of the Listing Rules but
and the Shinish Creek Wind Farm, in British Columbia, exempt from the independent shareholders’ approval
Canada. Concurrently, CKI, the Company, CPHI and requirement.
On 1 January 2021 Cenovus Energy Inc. and Husky Deed relating to investment opportunity
Energy completed a combination under the Canadian
in power projects with CK Infrastructure
law into a combined company (the “Combination”).
Prior to the completion of the Combination, Husky Holdings Limited
Energy as an associate of CKI, a substantial shareholder The Company entered into a deed relating to investment
of the Company, had been a connected person of the opportunity in power projects dated 10 January 2014
Company and therefore, the transactions under the (the “Investment Opportunity Deed”) with CKI to further
HMGP Services Agreements which took place prior to enhance the delineation between the business focus of
the Combination constituted continuing connected the Company and CKI in power projects and projects
transactions of the Company under the Listing Rules. other than power projects respectively. Pursuant to
Immediately following completion of the Combination, the Investment Opportunity Deed, CKI has undertaken
the combined company ceases to be an associate of CKI that if it is offered an opportunity to invest in any
and a connected person of the Company. Accordingly, power projects it will inform the Company and offer
any transactions under the HMGP Services Agreements the opportunity to the Company, and CKI may only
which take place after completion of the Combination invest in any power project if (i) the Company (with the
no longer constitute continuing connected transactions endorsement of its Independent Non-executive Directors
of the Company under the Listing Rules. or a committee thereof) invites CKI to participate as a
co-investor and (ii) the investment opportunity is in
Other Transactions respect of a power project of an enterprise value
exceeding HK$4 billion. Any co-investment by the
In connection with the spin-off and separate listing Company and CKI will be subject to compliance with the
of the Group’s electricity business in Hong Kong in applicable requirements of the Listing Rules, including
January 2014 the Company entered into the following independent shareholders’ approval if required.
transactions:
The Investment Opportunity Deed requires each of CKI
Non-competition Deed with HK Electric and the Company to review the deed’s implementation
as part of its internal audit plan and each company’s
Investments Limited
audit committee to review the deed’s compliance. A
The Company entered into a deed of non-competition
committee comprising all its Independent Non-executive
dated 14 January 2014 (the “Non-competition Deed”)
Directors has reviewed the compliance by CKI with
with HK Electric Investments Limited, pursuant to which
the terms of the deed and any decision by the Group
the Company has undertaken that save for certain
regarding any exercise of the rights under the deed.
exceptions the Group will not on its own account or
Having considered the Company’s internal control
with each other or in conjunction with or on behalf of
framework for ensuring the deed’s compliance,
any person, firm or company, carry on, or be engaged
internal audit’s compliance review report, CKI’s annual
in or interested in, directly or indirectly, whether as a
compliance confirmation to the Company and other
shareholder, partner, agent or otherwise (other than
relevant documents, the committee has confirmed its
through its holding of share stapled units in HKEI), the
view that during 2021, CKI complied with the terms
business of generation, transmission, distribution and
of the Investment Opportunity Deed and the Group’s
supply of electricity in Hong Kong.
decisions regarding any exercise of the rights under the
deed were made in accordance with the requirements
The Company has complied with the Non-competition
thereof.
Deed during 2021 and has, in accordance with the
Non-competition Deed, provided HK Electric Investments
Limited with its annual written confirmation.
Risk Management
Risk Management Framework management resides at all levels within the organisation.
The Board, through the Audit Committee, oversees the
The Group has in place an Enterprise Risk Management overall management of risks. The Risk Management
(ERM) framework to effectively identify, assess, mitigate Committee, supported by Internal Audit, assists the
and monitor key business, financial, operational and Board and Audit Committee to review and monitor key
compliance risks. The framework enables us to adopt risks faced by the Group. Management is responsible
a proactive and structured approach to identifying and for identifying and assessing risks of a strategic nature.
managing risks across the organisation, with on-going Business units are responsible for the identification and
monitoring and review in place. management of risks in their activities. The top-down
and bottom-up approaches complement each other and
enable us to identify and manage the Group’s key risks
in an effective manner, including material emerging risks
at corporate and business unit levels.
Company Board
(Through Company
Audit Committee)
Setting the tone at the top
regarding the importance
of risk management and
Reporting & controls
Risk Appetite
Monitoring
Determining the extent of
Monitoring risk management risk that the Group is willing
activities pertaining to to accept in pursuit of its
achievement of objectives strategic and operational
and KPI management objectives
Strategic and
Operational
Objectives
Risk
Identification &
Accountabilities
Analysis
Taking ownership of risks and
Identifying and analysing
controls and achieving strategic
risks that undermine the
and operational objectives
achievement of strategic
according to the Group’s Mitigation, and operational
risk appetite Control and objectives
Assurance Activities
Developing and implementing
control activities to ensure
effective management of
risks
Risk Factors
may lead to penalties, or, in extreme circumstances, the storm, lightning strike, flood, landslide, fire, incident
amendment, suspension or cancellation of the relevant of sabotage, terrorist attack, cyberattack, failure of the
licences by the authorities. The Group closely monitors critical information and control systems that operate and
changes in regulations, government policies and markets, protect the electricity and gas networks, or any other
and conducts scenario and sensitivity studies to assess unplanned event could lead to a prolonged and extensive
the impact of such changes. supply outage.
Impact of Local, National and The loss of cash flow resulting from supply interruption,
and the cost of recovery from network damage could
International Regulations be considerable. Such an incident could damage
Local business risks specific to individual countries and customer goodwill and lead to claims and litigation.
cities where the Group’s investments operate could have Substantial increases in the number or duration of
a material impact on its financial conditions, operating supply interruptions could result in increases in the costs
results and growth prospects. In addition, the Group’s associated with the operation of the supply networks.
investments in different parts of the world are subject This could have an adverse effect on the business,
to local legal and regulatory requirements, and their financial condition and efficiency of operations as well as
activities are regulated through applicable operating the reputation of the Group.
licences.
The Group’s investments conduct regular maintenance
With interests around the world, the Group is, and and upgrades of the power and gas supply equipment,
may increasingly become, exposed to different and provide comprehensive training to operational staff,
changing political, social, legal, tax, regulatory, listing undertake reliability reviews, and operate sophisticated
and environmental requirements at the local, national information technology control and asset management
and international level. New policies or measures systems. They also have fully tested contingency plans to
by governments, whether fiscal, tax, regulatory, ensure supply reliability standards are maintained.
environmental, or competition-related, may lead to
additional or unplanned increases in operating expenses Climate Change
and capital expenditures, pose a risk to the returns
delivered by the Group’s investments and may delay The Group is exposed to risks related to extreme
or prevent the commercial operation of an individual weather events, failure of the ecosystem to adapt to
business, with a resulting loss in revenue and profit. climate change and natural catastrophes that can cause
physical threats in specific regions and countries as well
The Group follows a proactive approach to monitoring as economic hazards associated with climate change
changes in government policies and legislation. Each transition. The countries and regions that the Group has
investment maintains high awareness of the need to operations may be vulnerable to water stress, prolonged
comply with applicable laws, regulations and licence periods of drought, heat waves leading to wildfires, or
requirements. It does so through a variety of means physical effects of global warming such as severe tropical
including engaging external advisors, performing regular cyclones and flooding.
audits and complying with both internal and external
regulatory reporting obligations. Adequate risk mitigation The Group has a long-term plan in place to address
measures are in place and are constantly reviewed for climate change risk by decarbonising our generation
enhancement. portfolio to reduce greenhouse gas emissions, help slow
global warming and reduce the physical impacts of
climate change. The Group is embracing the hydrogen
Reliability of Supply economy with business plans already in place in some
The Group’s power and utilities-related investments can of its operations for zero-carbon readiness in 2035, to
be exposed to supply interruptions. A severe earthquake, achieve a carbon-free vision for 2050.
2021 100%
The Group’s financial profile remained strong during
the year. On 28 December 2020, Standard & Poor’s
2020 100%
reaffirmed the “A” long-term issuer credit rating and
the “Stable” outlook of the Company, unchanged since
2019 100%
September 2018.
2018 100%
As at 31 December 2021, the net cash position of the
Group was HK$1,177 million (2020: HK$1,787 million). 2017 100%
Bank Loans
The profile of the Group’s external borrowings as at 31
December 2021, after taking into account interest rate
swaps, is set out in the tables below:
Debt Profile by Interest Rate Structure entering into forward foreign exchange contracts or cross
currency swaps. The fair value of such borrowings at 31
2021 100%
December 2021 was HK$3,433 million (2020: HK$3,640
million). The fair value of forward foreign exchange
2020 100% contracts and cross currency swaps at 31 December
2021 was an asset of HK$1,112 million (2020: liability of
2019 100% HK$78 million). Foreign currency fluctuations will affect
the translated value of the net assets of investments
2018 100% outside Hong Kong and the resultant translation
difference is included in the Group’s reserve account.
2017 100%
Income received from the Group’s investments outside
Fixed Rate Hong Kong which is not denominated in Hong Kong
dollars is, unless otherwise placed as foreign currency
deposits, converted into United States dollars on receipt.
The Group’s policy is to maintain at least a significant
portion of its debt at fixed interest rates. Interest rate risk The contractual notional amounts of derivative financial
is managed by either securing fixed rate borrowings or instruments outstanding at 31 December 2021
by using interest rate derivatives. amounted to HK$34,407 million (2020: HK$35,010
million).
Currency and interest rate risks are actively managed in
accordance with the Group’s treasury policy. Derivative Contingent Liabilities
financial instruments are used primarily for managing
As at 31 December 2021, the Group had given
interest rate and foreign currency risks and not for
guarantees and indemnities totalling HK$363 million
speculative purposes. Treasury transactions are only
(2020: HK$438 million).
executed with counterparties with acceptable credit
ratings to control counterparty risk exposure.
Employees
The Group’s principal foreign currency exposures arise The Group continues its policy of pay-for-performance
from its investments outside Hong Kong. Foreign and the pay levels are monitored to ensure
currency transaction exposure also arises from settlement competitiveness is maintained. The Group’s total
to vendors which is not material and is managed mainly remuneration costs for the year ended 31 December
through purchases in the spot market or utilisation 2021, excluding directors’ emoluments, amounted to
of foreign currency receipts of the Group. Currency HK$24 million (2020: HK$25 million). As at 31 December
exposure arising from investments outside Hong Kong 2021, the Group employed 13 (2020: 13) employees. No
is, where considered appropriate, mitigated by financing share option scheme is in operation.
those investments in local currency borrowings, or by
Principal Activities and Business The Directors recommend a final dividend of $2.04
(2020: $2.04) per ordinary share payable on 7 June 2022
Review to shareholders who are registered on the register of
The principal activity of the Company is investment members on 24 May 2022.
holding. The principal activities of the subsidiaries are
investment in energy and utility-related businesses. Share Capital
Particulars of the Company’s principal subsidiaries as at
Details of the share capital of the Company are set out
31 December 2021 are set out in Appendix 2 on pages
in note 24(c) to the financial statements. There was no
130 to 131 of the financial statements. Further discussion
movement during the year.
and analysis of the Group’s activities as required by
Schedule 5 to the Companies Ordinance, including
a discussion of the principal risks and uncertainties Donations
facing the Group and an indication of likely future Charitable and other donations made by the Group
developments in the Group’s business, can be found in during the year amounted to $2 million (2020:
the Chairman’s Statement on pages 4 to 6, CEO’s Report $1 million).
on pages 10 to 29, Risk Management and Risk Factors
on pages 55 to 59 and Financial Review on pages 60 to
61 of this Annual Report.
Summary of Five-Year Financial
Results
A discussion on the Group’s relationships with its The summary of five-year financial results of the Group is
key stakeholders, and environmental policies and set out on page 135.
performance is contained in the Chairman’s Statement
on pages 4 to 6 and CEO’s Report on pages 10 to 29 of
this Annual Report, and the Sustainability Report to be
Major Customers and Suppliers
published at the same time as this Annual Report in April Sales to the largest customer is 25.9% (2020: 24.1%)
2022, whilst its compliance with the relevant laws and of the Group’s total revenue, and sales to five largest
regulations that have a significant impact on the Group customers combined is 79.5% (2020: 75.4%) of the
are included in the Corporate Governance Report on Group’s total revenue for the year ended 31 December
pages 35 to 54 and Risk Factors on pages 57 to 59 of 2021. The five largest customers for the year are the joint
this Annual Report. These discussions form part of this ventures or associates of the Company.
directors’ report.
Purchases from the largest supplier is 38.5% (2020:
Results 33.1%) of the Group’s total purchases of revenue items,
and purchases from the five largest suppliers combined is
The results of the Group for the year ended 31 December 73.4% (2020: 64.5%) of the Group’s total purchases of
2021 and the financial positions of the Group as at that revenue items for the year ended 31 December 2021.
date are set out in the financial statements on pages 69
to 134.
As at 31 December 2021, the consolidated attributable interest of the Group in these affiliated companies amounted
to $55,609 million.
Opinion
We have audited the consolidated financial statements of Power Assets Holdings Limited (“the Company”) and
its subsidiaries (“the Group”) set out on pages 69 to 134, which comprise the consolidated statement of financial
position as at 31 December 2021, the consolidated statement of profit or loss, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement
for the year then ended and notes to the consolidated financial statements, including a summary of significant
accounting policies.
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position
of the Group as at 31 December 2021 and of its consolidated financial performance and its consolidated cash flows
for the year then ended in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong
Kong Institute of Certified Public Accountants (“HKICPA”) and have been properly prepared in compliance with the
Hong Kong Companies Ordinance.
Refer to notes 14 and 15 to the consolidated financial statements and the accounting policy 2(e).
The Key Audit Matter How the matter was addressed in our audit
The Group’s associates and joint ventures operate in Our audit procedures to assess the accuracy of the
Hong Kong and outside Hong Kong (including the accounting for interests in associates and joint ventures
United Kingdom, Australia, Thailand, the People’s included the following:
Republic of China, Canada, the Netherlands, New
Zealand and the United States). The Group’s share of • performing an audit of the consolidated financial
profits less losses of associates and joint ventures for statements of the Hong Kong based associate,
the year ended 31 December 2021 and the Group’s HK Electric Investments Limited, in accordance
interests in associates and joint ventures at that date are with the requirements of HKSAs;
significant in the context of the Group’s consolidated
financial statements. • evaluating the independence and competence
of the auditors of associates and joint ventures
The financial information of associates and joint ventures outside Hong Kong;
with operations outside of Hong Kong is prepared in
accordance with the prevailing accounting standards • participating in the risk assessment process
in each relevant jurisdiction which may differ in certain undertaken by the auditors in respect of their
respects from HKFRSs. audits of significant associates and joint ventures
outside Hong Kong;
Converting the financial information of these entities
into HKFRSs for the purpose of equity accounting • understanding the procedures planned to
involves management making a number of manual be performed by the auditors of significant
adjustments some of which are complex in nature. associates and joint ventures outside Hong Kong
to address the significant risks identified and
We identified the accounting for interests in associates considering whether the planned procedures
and joint ventures as a key audit matter because of were appropriate for the purpose of the audit of
the material impact that these entities have on the the Group’s consolidated financial statements;
consolidated financial statements and also because of
the complex nature of certain adjustments made by • obtaining reporting from the component auditors
management which we consider increases the inherent of significant associates and joint ventures outside
risk of error. Hong Kong and discussing with these auditors
matters of significance in their audits which
could impact the Group’s consolidated financial
statements, the work performed thereon and
their conclusions;
Our opinion on the consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
In preparing the consolidated financial statements, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
The directors have delegated the oversight of the Group’s financial reporting process to the Audit Committee.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
HKSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations or the override of internal control.
Annual Report 2021 67
Independent Auditor’s Report
To the members of Power Assets Holdings Limited
(Incorporated in Hong Kong with limited liability)
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements
regarding independence and communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence and, where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Audit Committee, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Lee Wai Shu, Wilson.
KPMG
Certified Public Accountants
8th Floor, Prince’s Building
10 Chater Road
Central, Hong Kong
16 March 2022
2021 2020
Note $ million $ million
Income tax: 10
Current (54) (12)
Deferred (78) (56)
(132) (68)
The notes on pages 74 to 134 form part of these financial statements. Details of dividends payable to equity
shareholders of the Company attributable to the profit for the year are set out in note 24(b).
2021 2020
$ million $ million
1,253 (1,501)
627 619
1,880 (882)
2021 2020
Note $ million $ million
Non-current assets
Property, plant and equipment and leasehold land 13 20 17
Interest in joint ventures 14 60,234 59,147
Interest in associates 15 26,901 26,405
Other non-current financial assets 16 1,100 1,100
Derivative financial instruments 21 1,034 704
Deferred tax assets 23(b) 45 111
Employee retirement benefit assets 22(a) 7 6
89,341 87,490
Current assets
Trade and other receivables 17 353 635
Bank deposits and cash 18(a) 4,610 5,427
4,963 6,062
Current liabilities
Trade and other payables 19 (3,417) (3,603)
Current portion of bank loans and other interest-bearing
borrowings 20 – (3,642)
Current tax payable 23(a) (137) (161)
(3,554) (7,406)
Net current assets/(liabilities) 1,409 (1,344)
Total assets less current liabilities 90,750 86,146
Non-current liabilities
Bank loans and other interest-bearing borrowings 20 (3,433) –
Lease liabilities (3) –
Derivative financial instruments 21 (267) (1,181)
Deferred tax liabilities 23(b) (134) (57)
Employee retirement benefit liabilities 22(a) (146) (142)
(3,983) (1,380)
Net assets 86,767 84,766
Approved and authorised for issue by the Board of Directors on 16 March 2022.
2021 2020
Note $ million $ million
Operating activities
Cash used in operations 18(b) (112) (33)
Interest paid (153) (91)
Interest received 1,287 1,125
Tax paid for operations outside Hong Kong (91) (43)
Tax refunded for operations outside Hong Kong 8 4
Investing activities
Payment for the purchase of property, plant and equipment – (2)
Decrease/(increase) in bank deposits with more than
three months to maturity when placed 1,670 (402)
Investment in a joint venture (270) (636)
Investment in an associate (174) –
New loan to a joint venture (204) –
Repayment from a joint venture – 1,158
Net cash received/(paid) on hedging instruments 548 (934)
Distribution from a joint venture – 1,379
Dividends received from joint ventures 2,501 3,073
Dividends received from associates 1,808 1,445
Dividends received from equity securities 52 53
Financing activities
Proceeds from bank loans 3,685 –
Repayment of bank loans (3,679) –
Capital element of lease rentals paid 18(d) (3) (3)
Dividends paid to equity shareholders of the Company (6,019) (5,976)
1. General information
Power Assets Holdings Limited (“the Company”) is a limited company incorporated and domiciled in Hong
Kong. The address of its registered office is Unit 2005, 20th Floor, Cheung Kong Center, 2 Queen’s Road
Central, Hong Kong.
The HKICPA has issued certain amendments to HKFRSs that are first effective or available for early
adoption for the current accounting period of the Group. Note 3 provides information on any changes
in accounting policies resulting from initial application of these developments to the extent that they are
relevant to the Group for the current accounting period reflected in these financial statements.
The measurement basis used in the preparation of the financial statements is the historical cost basis
except as explained in the accounting policies set out below.
The preparation of financial statements in conformity with HKFRSs requires management to make
judgements, estimates and assumptions that affect the application of policies and reported amounts of
assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under the circumstances, the
results of which form the basis of making the judgements about carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision affects both current and future
periods.
Judgements made by management in the application of HKFRSs that have significant effect on the
financial statements and major sources of estimation uncertainty are discussed in note 30.
(d) Subsidiaries
Subsidiaries are entities (including structured entities) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has the rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity.
Investments in subsidiaries are consolidated into the consolidated financial statements from the date that
control commences until the date that control ceases. Intra-group balances and transactions and any
unrealised profits arising from intra-group transactions are eliminated in full in preparing the consolidated
financial statements. Unrealised losses resulting from intra-group transactions are eliminated in the same
way as unrealised gains but only to the extent that there is no evidence of impairment.
Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for
as equity transactions, whereby adjustments are made to the amounts of controlling and non-controlling
interests within consolidated equity to reflect the change in relative interests, but no adjustments are made
to goodwill and no gain or loss is recognised.
When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire interest in that
subsidiary, with a resulting gain or loss being recognised in profit or loss. Any interest retained in that
former subsidiary at the date when control is lost is recognised at fair value and this amount is regarded
as the fair value on initial recognition of a financial asset (see note 2(g)) or, when appropriate, the cost on
initial recognition of an investment in a joint venture or an associate (see note 2(e)).
In the Company’s statement of financial position, an investment in a subsidiary is stated at cost less
impairment losses (see note 2(l)(ii)).
An associate is an entity in which the Group or the Company has significant influence, but not control or
joint control, over its management, including participation in the financial and operating policy decisions.
An investment in a joint venture or an associate is accounted for in the consolidated financial statements
under the equity method, unless it is classified as held for sale (or included in a disposal group that is
classified as held for sale). Under the equity method, the investment is initially recorded at cost, adjusted
for any excess of the Group’s share of the acquisition-date fair values of the investee’s identifiable
net assets over the cost of the investment (if any). Thereafter, the investment is adjusted for the post
acquisition change in the Group’s share of the investee’s net assets and any impairment loss relating to
the investment (see notes 2(f) and 2(l)(ii)). At each reporting date, the Group assesses whether there is any
objective evidence that the investment is impaired. Any excess of the Group’s share of the acquisition-date
fair values of the investee’s identifiable net assets over the cost of the investment, the Group’s share of the
post-acquisition, post-tax results of the investees and impairment losses for the year, if any, are recognised
in the consolidated statement of profit or loss, whereas the Group’s share of the post-acquisition, post-
tax items of the investees’ other comprehensive income is recognised in the consolidated statement of
comprehensive income.
Unrealised profits and losses resulting from transactions between the Group and its joint ventures and
associates are eliminated to the extent of the Group’s interest in the investee, except where unrealised
losses provide evidence of an impairment of the asset transferred, in which case they are recognised
immediately in profit or loss.
When the Group ceases to have joint control over a joint venture or significant influence over an associate,
it is accounted for as a disposal of the entire interest in that investee, with a resulting gain or loss being
recognised in profit or loss. Any interest retained in a former joint venture at the date when joint control
is lost is recognised at fair value and this amount is regarded as the fair value on initial recognition of a
financial asset (see note 2(g)) or, when appropriate, the cost on initial recognition of an investment in
an associate. Any interest retained in a former associate at the date when significant influence is lost is
recognised at fair value and this amount is regarded as the fair value on initial recognition of a financial
asset (see note 2(g)).
(f) Goodwill
Goodwill represents the excess of the cost of a business combination or an investment in a joint venture
or an associate over the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities
and contingent liabilities.
Any excess of the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and
contingent liabilities over the cost of a business combination or an investment in a joint venture or an
associate is recognised immediately in profit or loss.
Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a business combination
is allocated to each cash-generating unit, or groups of cash-generating units, that is expected to benefit
from the synergies of the combination and is tested annually for impairment (see note 2(l)(ii)). In respect
of joint ventures or associates, the carrying amount of goodwill is included in the carrying amount of the
interest in the joint venture or associate and the investment as a whole is tested for impairment whenever
there is objective evidence of impairment (see note 2(l)(ii)).
Investments in equity securities and other financial assets are recognised/derecognised on the date the
Group commits to purchase/sell the investment. The investments are initially stated at fair value plus
directly attributable transaction costs, except for those investments measured at fair value through profit
or loss (“FVPL”) for which transaction costs are recognised directly in profit or loss. For an explanation
of how the Group determines fair value of financial instruments, see note 25(f). These investments are
subsequently accounted for as follows, depending on their classification.
– amortised cost, if the investment is held for the collection of contractual cash flows which represent
solely payments of principal and interest. Interest income from the investment is calculated using the
effective interest method.
– fair value through other comprehensive income (“FVOCI”) – (with subsequent reclassification to
profit or loss), if the contractual cash flows of the investment comprise solely payments of principal
and interest and the investment is held within a business model whose objective is achieved by
both the collection of contractual cash flows and sale. Changes in fair value are recognised in other
comprehensive income, except for the recognition in profit or loss of expected credit losses, interest
income (calculated using the effective interest method) and foreign exchange gains and losses.
When the investment is derecognised, the amount accumulated in other comprehensive income is
reclassified from equity to profit or loss.
– FVPL, if the investment does not meet the criteria for being measured at amortised cost or FVOCI (with
subsequent reclassification to profit or loss). Changes in the fair value of the investment (including
interest) are recognised in profit or loss.
Equity investments
An investment in equity securities is classified as at FVPL unless the equity investment is not held for
trading purposes and on initial recognition of the investment the Group makes an irrevocable election
to designate the investment at FVOCI (without subsequent reclassification to profit or loss) such that
subsequent changes in fair value are recognised in other comprehensive income. Such elections are made
on an instrument-by-instrument basis, but may only be made if the investment meets the definition
of equity from the issuer’s perspective. Where such an election is made, the amount accumulated in
other comprehensive income remains in the fair value reserve (without subsequent reclassification to
profit or loss) until the investment is disposed of. At the time of disposal, the amount accumulated in
the investment revaluation reserve (without subsequent reclassification to profit or loss) is transferred to
revenue reserve. Dividends from an investment in equity securities, irrespective of whether classified as
at FVPL or FVOCI (without subsequent reclassification to profit or loss), are recognised in profit or loss as
revenue.
For all other hedged forecast transactions, the amount accumulated in the hedging reserve is
reclassified from equity to profit or loss in the same period or periods during which the hedged cash
flows affect profit or loss (such as when a forecast sale occurs or interest expense is recognised).
If a hedge no longer meets the criteria for hedge accounting (including when the hedging instrument
expires or is sold, terminated or exercised), then hedge accounting is discontinued prospectively.
When hedge accounting is discontinued, but the hedged forecast transaction is still expected to
occur, the amount that has been accumulated in the hedging reserve remains in equity until the
transaction occurs and it is recognised in accordance with the above policy. If the hedged transaction
is no longer expected to take place, the amount that has been accumulated in the hedging reserve is
reclassified from equity to profit or loss immediately.
Forward element of forward foreign currency contracts and foreign currency basis spread of financial
instruments may be separated and excluded from the designated hedging instruments. If the Group
excludes the forward element of a forward foreign exchange contract or the foreign currency basis
spread of a financial instrument (the “excluded elements”) from the designation of a hedging
instrument, then the excluded elements may be separately accounted for as a cost of hedging. The
fair value changes of the excluded elements are recognised in a separate component of equity, i.e.
cost of hedging reserve, to the extent that it relates to the hedged items.
(j) Property, plant and equipment and leasehold land, depreciation and amortisation
(i) Property, plant and equipment are stated in the consolidated statement of financial position at cost
less accumulated depreciation (see note 2(j)(vi)), amortisation (see note 2(j)(v)) and impairment losses
(see note 2(l)(ii)).
(ii) Where parts of a property, plant and equipment have different useful lives, the cost of the
property, plant and equipment is allocated on a reasonable basis between the parts and each part
is depreciated separately. Subsequent expenditure to replace a component of a property, plant and
equipment that is accounted for separately, or to improve its operational performance is included in
the asset’s carrying amount or recognised as a separate asset as appropriate when it is probable that
future economic benefits in excess of the originally assessed standard of performance of the existing
asset will flow to the Group and the cost of the item can be measured reliably. All other subsequent
expenditure is recognised as an expense in the period in which it is incurred.
(iii) Gains or losses arising from the retirement or disposal of an item of property, plant and equipment
are determined as the difference between the net disposal proceeds and the carrying amount of the
item and are recognised in profit or loss on the date of retirement or disposal.
(iv) Interest in leasehold land held for own use where the Group is the registered owner of the property
interest are stated in the consolidated statement of financial position at cost less accumulated
amortisation (see note 2(j)(v)) and impairment losses (see note 2(l)(ii)).
(v) The cost of acquiring leasehold land is amortised on a straight-line basis over the period of the
unexpired lease term.
(vi) Depreciation is calculated to write off the cost of property, plant and equipment less their estimated
residual value, if any, using the straight-line method over their estimated useful lives as follows:
Years
Immovable assets are amortised on a straight-line basis over the unexpired lease terms of the land on
which the immovable assets are situated if the unexpired lease terms of the land are shorter than the
estimated useful lives of the immovable assets.
Both the useful life of an asset and its residual value, if any, are reviewed annually.
At the lease commencement date, the Group recognises a right-of-use asset and a lease liability, except
for short-term leases that have a lease term of 12 months or less and leases of low-value assets. When the
Group enters into a lease in respect of a low-value asset, the Group decides whether to capitalise the lease
on a lease-by-lease basis. The lease payments associated with those leases which are not capitalised are
recognised as an expense on a systematic basis over the lease term.
Where the lease is capitalised, the lease liability is initially recognised at the present value of the lease
payments payable over the lease term, discounted using the interest rate implicit in the lease or, if that rate
cannot be readily determined, using a relevant incremental borrowing rate. After initial recognition, the
lease liability is measured at amortised cost and interest expense is calculated using the effective interest
method.
The right-of-use asset recognised when a lease is capitalised is initially measured at cost, which comprises
the initial amount of the lease liability plus any lease payments made at or before the commencement
date, and any initial direct costs incurred. Where applicable, the cost of the right-of-use assets also includes
an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the
site on which it is located, discounted to their present value, less any lease incentives received. The right-
of-use asset is subsequently stated at cost less accumulated depreciation (see note 2(j)(vi)), amortisation (see
note 2(j)(v)) and impairment losses (see note 2(l)(ii)).
The lease liability is remeasured when there is a change in future lease payments arising from a change in
an index or rate, or there is a change in the Group’s estimate of the amount expected to be payable under
a residual value guarantee, or there is a change arising from the reassessment of whether the Group will
be reasonably certain to exercise a purchase, extension or termination option. When the lease liability is
remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use
asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to
zero.
The lease liability is also remeasured when there is a change in the scope of a lease or the consideration for
a lease that is not originally provided for in the lease contract (“lease modification”) that is not accounted
for as a separate lease. In this case the lease liability is remeasured based on the revised lease payments
and lease term using a revised discount rate at the effective date of the modification. The only exceptions
are rent concessions that occurred as a direct consequence of the COVID-19 pandemic and met the
conditions set out in paragraph 46B of HKFRS 16, Leases . In such cases, the Group has advantage of the
practical expedient not to assess whether the rent concessions are lease modifications and recognised the
change in consideration as negative variable lease payments in profit or loss in the period in which the
event taken or condition that triggers the rent concessions occurred.
In the Group’s consolidated statement of financial position, right-of-use asset has been included in
property, plant and equipment and leasehold land and lease liabilities have been included in bank loans
and other interest-bearing borrowings. The current portion of long-term lease liabilities is determined as
the present value of contractual payments that are due to be settled within twelve months after reporting
period.
Other financial assets measured at fair value, including equity securities and other financial assets
measured at FVPL and derivative financial assets, are not subject to the ECL assessment.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present
value of all expected cash shortfalls (i.e. the difference between the cash flows due to the Group in
accordance with the contract and the cash flows that the Group expects to receive).
The maximum period considered when estimating ECLs is the maximum contractual period over
which the Group is exposed to credit risk.
In measuring ECLs, the Group takes into account reasonable and supportable information that
is available without undue cost or effort. This includes information about past events, current
conditions and forecasts of future economic conditions.
– 12-month ECLs: these are losses that are expected to result from possible default events within
the 12 months after the reporting date; and
– lifetime ECLs: these are losses that are expected to result from all possible default events over
the expected lives of the items to which the ECL model applies.
Loss allowances for trade receivables are always measured at an amount equal to lifetime ECLs. ECLs
on these financial assets are estimated using a provision matrix based on the Group’s historical credit
loss experience, adjusted for factors that are specific to the debtors and an assessment of both the
current and forecast general economic conditions at the reporting date.
For all other financial instruments, the Group recognises a loss allowance equal to 12-month ECLs
unless there has been a significant increase in credit risk of the financial instrument since initial
recognition, in which case the loss allowance is measured at an amount equal to lifetime ECLs.
– an actual or expected significant deterioration in the operating results of the debtor; and
– existing or forecast changes in the technological, market, economic or legal environment that
have a significant adverse effect on the debtor’s ability to meet its obligation to the Group.
Depending on the nature of the financial instruments, the assessment of a significant increase in
credit risk is performed on either an individual basis or a collective basis. When the assessment is
performed on a collective basis, the financial instruments are grouped based on shared credit risk
characteristics, such as past due status and credit risk ratings.
ECLs are remeasured at each reporting date to reflect changes in the financial instrument’s credit risk
since initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss
in profit or loss. The Group recognises an impairment gain or loss for all financial instruments with
a corresponding adjustment to their carrying amount through a loss allowance account, except for
investments in debt securities that are measured at FVOCI (with subsequent reclassification to profit
or loss), for which the loss allowance is recognised in other comprehensive income and accumulated
in the fair value reserve (with subsequent reclassification to profit or loss).
At each reporting date, the Group assesses whether a financial asset is credit-impaired. A financial
asset is credit-impaired when one or more events that have a detrimental impact on the estimated
future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable events:
– it becoming probable that the borrower will enter into bankruptcy or other financial
reorganisation;
– significant changes in the technological, market, economic or legal environment that have an
adverse effect on the debtor; or
– the disappearance of an active market for a security because of financial difficulties of the
issuer.
Write-off policy
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent
that there is no realistic prospect of recovery. This is generally the case when the Group determines
that the debtor does not have assets or sources of income that could generate sufficient cash flows
to repay the amounts subject to the write-off.
Subsequent recoveries of an asset that was previously written off are recognised as a reversal of
impairment in profit or loss in the period in which the recovery occurs.
– goodwill; and
If any such indication exists, the asset’s recoverable amount is estimated. In addition, for goodwill,
the recoverable amount is estimated annually whether or not there is any indication of impairment.
The recoverable amount of an asset is the greater of its fair value less costs of disposal and
value in use. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. Where an asset does not generate
cash inflows largely independent of those from other assets, the recoverable amount is
determined for the smallest group of assets that generates cash inflows independently (i.e. a
cash-generating unit). A portion of the carrying amount of a corporate asset is allocated to an
individual cash-generating unit if the allocation can be done on a reasonable and consistent
basis, or to the smallest group of cash-generating units if otherwise.
An impairment loss is recognised in profit or loss if the carrying amount of an asset, or the
cash-generating unit to which it belongs, exceeds its recoverable amount. Impairment losses
recognised in respect of cash-generating units are allocated first to reduce the carrying amount
of any goodwill allocated to the cash-generating unit (or group of units) and then, to reduce
the carrying amount of the other assets in the unit (or group of units) on a pro rata basis,
except that the carrying value of an asset will not be reduced below its individual fair value less
costs of disposal (if measurable) or value in use (if determinable).
In respect of assets other than goodwill, an impairment loss is reversed if there has been a
favourable change in the estimates used to determine the recoverable amount. An impairment
loss in respect of goodwill is not reversed.
A reversal of an impairment loss is limited to the asset’s carrying amount that would have been
determined had no impairment loss been recognised in prior years. Reversals of impairment
losses are credited to profit or loss in the year in which the reversals are recognised.
Impairment losses recognised in an interim period in respect of goodwill are not reversed in a
subsequent period. This is the case even if no loss, or a smaller loss, would have been recognised
had the impairment been assessed only at the end of the financial year to which the interim period
relates.
Receivables are stated at amortised cost using the effective interest method and including allowance for
credit losses (see note 2(l)(i)).
For interest-bearing borrowings that are designated as hedged items in fair value hedges, subsequent to
initial recognition, the interest-bearing borrowings are stated at fair value with the fair value changes that
are attributable to the hedged risk recognised in profit or loss (see note 2(i)(i)).
Where the calculation of the Group’s net obligation results in a negative amount, the asset
recognised is limited to the present value of any future refunds from or reductions in future
contributions to the defined benefit retirement scheme.
Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling
(if applicable) and the return on plan assets (excluding interest), is reflected immediately in the
statement of financial position with a charge or credit recognised in other comprehensive income
in the period in which they occur. Remeasurement recognised in other comprehensive income is
reflected immediately in the revenue reserve and will not be reclassified to profit or loss.
The Group determines the net interest expense or income for the period on the net defined benefit
liability or asset by applying the discount rate used to measure the defined benefit obligation at the
beginning of the annual period to the net defined benefit liability or asset, taking into account any
changes in the net defined liabilities or assets during the year as a result of contributions and benefit
payments.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of
previous years.
Deferred tax assets and liabilities arise from deductible and taxable temporary differences respectively,
being the differences between the carrying amounts of assets and liabilities for financial reporting
purposes and their tax bases. Deferred tax assets also arise from unused tax losses and unused tax credits.
All deferred tax liabilities and all deferred tax assets, to the extent that it is probable that future taxable
profits will be available against which the asset can be utilised, are recognised.
The amount of deferred tax recognised is measured based on the expected manner of realisation or
settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively
enacted at the end of the reporting period. Deferred tax assets and liabilities are not discounted.
The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow the
related tax benefit to be utilised. Any such reduction is reversed to the extent that it becomes probable
that sufficient taxable profits will be available.
Current tax balances and deferred tax balances, and movements therein, are presented separately from
each other and are not offset.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot
be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow
of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the
occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities
unless the probability of outflow of economic benefits is remote.
Interest income is recognised as it accrues using the effective interest method. For financial assets
measured at amortised cost that are not credit-impaired, the effective interest rate is applied to the gross
carrying amount of the asset. For credit-impaired financial assets, the effective interest rate is applied to
the amortised cost (i.e. gross carrying amount net of loss allowance) of the asset (see note 2(l)(i)).
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are
translated using the foreign exchange rates ruling at the transaction dates. The transaction date is the date
on which the Group initially recognises such non-monetary assets or liabilities. Non-monetary assets and
liabilities denominated in foreign currencies that are stated at fair value are translated using the foreign
exchange rates ruling at the dates the fair value was determined.
The results of operations outside Hong Kong are translated into Hong Kong dollars at the average
exchange rates approximating the foreign exchange rates ruling at the dates of the transactions. Statement
of financial position items are translated into Hong Kong dollars at the closing foreign exchange rates at
the end of the reporting period. The resulting exchange differences are recognised in other comprehensive
income and accumulated separately in equity in the exchange reserve.
On disposal of an operation outside Hong Kong, the cumulative amount of the exchange differences
relating to that operation is reclassified from equity to profit or loss when the profit or loss on disposal is
recognised.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when
expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are
necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs
is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its
intended use or sale are interrupted or complete.
(ii) An entity is related to the Group if any of the following conditions apply:
(a) The entity and the Group are members of the same group (which means that each parent,
subsidiary and fellow subsidiary is related to the others).
(b) One entity is a joint venture or an associate of the other entity (or a joint venture or an
associate of a member of a group of which the other entity is a member).
(c) Both entities are joint ventures of the same third party.
(d) One entity is a joint venture of a third entity and the other entity is an associate of the third
entity.
(e) The entity is a post-employment benefit plan for the benefit of employees of either the Group
or an entity related to the Group.
(f) The entity is controlled or jointly controlled by a person identified in note 2(w)(i).
(g) A person identified in note 2(w)(i)(a) has significant influence over the entity or is a member of
the key management personnel of the entity (or of a parent of the entity).
(h) The entity, or any member of a group of which it is a part, provides key management personnel
services to the Group.
Close members of the family of a person are those family members who may be expected to influence, or
be influenced by, that person in their dealings with the entity.
• Amendments to HKFRS 9, HKAS 39, HKFRS 7 and HKFRS 16, Interest rate benchmark reform – phase 2
• Amendments to HKFRS 16, COVID-19-related rent concessions beyond 30 June 2021
None of these developments have had a material effect on how the Group’s results and financial position for
the current or prior periods have been prepared or presented.
The Group has not applied any new standard or interpretation that is not yet effective for the current accounting
period.
4. Revenue
The principal activity of the Group is investment in energy and utility-related businesses. Group revenue
represents interest income from loans granted to joint ventures and associates, dividends from other financial
assets and engineering and consulting services fees.
2021 2020
$ million $ million
6. Segment information
The Group has aggregated operating segments with similar characteristics to present the following reportable
segments.
– Investment in HKEI: this segment invests in generation and supply of electricity business in Hong Kong.
– Investments: this segment invests in energy and utility-related businesses and is segregated further into
three reportable segments (United Kingdom, Australia and Others) on a geographical basis.
– All other activities: this segment represents other activities carried out by the Group.
The basis of accounting for the Group’s segment information is the same as that for the Group’s financial
statements. The financial information about the Group’s segments is set out in Appendix 1 on pages 128 to
129.
Staff costs 29 30
Depreciation 3 4
Cost of services and investment related expenses 111 120
143 154
8. Finance costs
2021 2020
$ million $ million
No provision for Hong Kong Profits Tax has been made in the financial statements as the Group did not
have any assessable profits during the current and preceding years in Hong Kong.
Taxation for operations outside Hong Kong is charged at the appropriate current rates of taxation ruling in
the relevant countries.
(b) Reconciliation between tax expense and accounting profit at applicable tax rates:
2021 2020
$ million $ million
Salaries,
allowances Retirement 2021 2020
and other scheme Total Total
Fees benefits (18)
contributions Bonuses emoluments emoluments
Name of Directors $ million $ million $ million $ million $ million $ million
Executive Directors
Fok Kin Ning, Canning (3) (12)
Chairman 0.12 – – – 0.12 0.12
Tsai Chao Chung, Charles (5) (13)
Chief Executive Officer 0.09 3.52 0.51 0.85 4.97 4.90
Chan Loi Shun (5) (14) (17) 0.09 5.50 – – 5.59 5.57
Andrew John Hunter 0.07 0.10 – – 0.17 0.18
Neil Douglas McGee 0.07 – – – 0.07 0.07
Wan Chi Tin (15) 0.07 – – – 0.07 0.07
Non-executive Directors
Victor T K Li (4) (16) 0.09 – – – 0.09 0.07
Ip Yuk-keung, Albert (1) (2) (4) (5) 0.18 – – – 0.18 0.14
Koh Poh Wah (1) (2) (11) 0.09 – – – 0.09 –
Leung Hong Shun, Alexander (10) 0.04 – – – 0.04 –
Lui Wai Yu, Albert (1) (3) (7) (9) 0.09 – – – 0.09 0.07
Ralph Raymond Shea (1) (2) (3) (4) 0.18 – – – 0.18 0.16
Wong Chung Hin (1) (2) (3) (6) – – – – – 0.03
Wu Ting Yuk, Anthony (1) (2) (8) 0.14 – – – 0.14 0.13
Total for the year 2021 1.32 9.12 0.51 0.85 11.80
Total for the year 2020 1.07 9.10 0.51 0.83 11.51
Notes:
(4) Member of the Nomination Committee (appointed with effect from 1 December 2020)
(5) Member of the Sustainability Committee (appointed with effect from 1 December 2020)
(6) Resigned as an Independent Non-executive Director and ceased to be a member of the Audit Committee and the
Remuneration Committee with effect from 19 March 2020.
(7) Appointed as an Independent Non-executive Director with effect from 19 March 2020.
(8) Appointed as a member of the Audit Committee with effect from 19 March 2020.
(9) Appointed as a member of the Remuneration Committee with effect from 19 March 2020.
(11) Appointed as an independent Non-executive Director and a member of the Audit Committee with effect from 13 May 2021.
(12) During the year, Mr. Fok Kin Ning, Canning received director’s emoluments of $120,000 from HK Electric Investments Limited,
which is an associate of the Group. The director’s emoluments received were paid back to the Company.
(13) During the year, Mr. Tsai Chao Chung, Charles received director’s emoluments of THB434,945 from Ratchaburi Power
Company Limited, which is an associate of the Group. The director’s emoluments received were paid back to the Company.
(14) During the year, Mr. Chan Loi Shun received director’s emoluments of THB434,945 from Ratchaburi Power Company Limited
and $3,378,100 from HK Electric Investments Limited, which are associates of the Group. The director’s emoluments received
were paid back to the Company.
(15) During the year, Mr. Wan Chi Tin received director’s emoluments of $90,000 from HK Electric Investments Limited, which is an
associate of the Group. The director’s emoluments received were paid back to the Company.
(16) During the year, Mr. Victor T K Li received director’s emoluments of $90,000 from HK Electric Investments Limited, which is an
associate of the Group. The director’s emoluments received were paid back to the Company.
(17) During the year, Mr. Chan Loi Shun received director’s emoluments of $5,592,100 from the Company. The director’s
emoluments received were paid back to CK Infrastructure Holdings Limited, a substantial shareholder of the Company.
(18) For Directors who are employees of the Group, other benefits also include insurance and medical benefits entitled by the
employees of the Group.
2021 2020
$ million $ million
The total remuneration of senior management, excluding directors, is within the following bands:
2021 2020
Number Number
$1,500,001 – $2,000,000 2 3
$2,000,001 – $2,500,000 1 –
$3,500,001 – $4,000,000 1 2
$4,000,001 – $4,500,000 1 –
2021 2020
$ million $ million
At 31 December 2021 and 2020, there was no amount due from directors and senior management.
There were no dilutive potential ordinary shares in existence during the years ended 31 December 2021 and
2020.
The loans to unlisted joint ventures are unsecured, interest bearing at rates ranging from 2.8% per annum to
11.0% per annum (2020: 3.1% per annum to 11.0% per annum) and have no fixed repayment terms.
Included in the loans to unlisted joint ventures are subordinated loans totalling $8,707 million (2020: $8,814
million). The rights in respect of these loans are subordinated to the rights of any other lenders to the joint
ventures.
The amounts due from unlisted joint ventures are unsecured, interest free and have no fixed repayment terms.
All the Group’s joint ventures are unlisted corporate entities for which a quoted market price is not available.
Details of the Group’s material joint ventures at the end of the reporting period are set out in Appendix 3 on
pages 132 to 133.
UK Power Australian Gas Husky Northern Gas Wales & West Gas
Networks CK William Networks Midstream L.P. Networks Networks
2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
$ million $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million
Current assets 4,945 6,915 4,563 4,419 627 336 945 658 3,594 4,733 3,101 5,704
Non-current assets 147,303 142,725 92,637 96,895 34,485 35,366 18,835 18,726 34,039 33,208 41,392 40,995
Current liabilities (9,508) (15,874) (15,175) (5,214) (1,749) (3,651) (409) (183) (4,670) (7,040) (1,352) (2,412)
Non-current liabilities (81,947) (75,651) (59,711) (74,576) (19,895) (18,475) (7,339) (7,157) (23,913) (21,099) (39,573) (42,539)
UK Power Australian Gas Husky Northern Gas Wales & West Gas
Networks CK William Networks Midstream L.P. Networks Networks
2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
$ million $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million
Cash and cash equivalents 1,831 3,081 1,616 1,828 34 42 398 182 142 220 2,419 4,676
Current financial liabilities
(excluding trade and other
payables and provisions) (986) (8,310) (10,955) (1,890) (1,504) (2,552) – – (208) (998) – –
Non-current financial liabilities
(excluding trade and other
payables and provisions) (61,835) (56,522) (51,328) (65,729) (16,878) (15,666) (6,866) (6,619) (18,526) (16,892) (37,308) (37,064)
UK Power Australian Gas Husky Northern Gas Wales & West Gas
Networks CK William Networks Midstream L.P. Networks Networks
2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
$ million $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million
Revenue 17,848 16,118 10,490 10,783 3,789 3,461 2,355 1,831 4,937 4,462 4,833 4,529
The above profit or loss for the year includes the following:
UK Power Australian Gas Husky Northern Gas Wales & West Gas
Networks CK William Networks Midstream L.P. Networks Networks
2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
$ million $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million
Depreciation and amortisation (3,188) (2,849) (2,772) (2,851) (338) (631) (817) (616) (929) (855) (797) (753)
Interest income 274 268 9 18 1 1 5 6 – – 8 29
Interest expense (2,868) (2,446) (2,092) (2,261) (663) (679) (372) (289) (692) (622) (1,750) (1,882)
Income tax (expense)/credit (3,146) (2,250) (528) (575) (550) (483) – 1 (1,444) (630) 2,102 (538)
Reconciliation of the above summarised financial information to the carrying amount of the interest in the
joint ventures recognised in the consolidated financial statements:
UK Power Australian Gas Husky Northern Gas Wales & West Gas
Networks CK William Networks Midstream L.P. Networks Networks
2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
$ million $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million
Net assets of the joint ventures 60,793 58,115 22,314 21,524 13,468 13,576 12,032 12,044 9,050 9,802 3,568 1,748
Group’s effective interest 40.0% 40.0% 20.0% 20.0% 27.51% 27.51% 48.75% 48.75% 41.29% 41.29% 36.0% 36.0%
Group’s share of net assets of
the joint ventures 24,317 23,246 4,463 4,305 3,706 3,735 5,866 5,871 3,737 4,047 1,284 629
Consolidation adjustments 68 67 290 343 – – 294 246 – – 256 259
Carrying amount of the
Group’s interest in the
joint ventures 24,385 23,313 4,753 4,648 3,706 3,735 6,160 6,117 3,737 4,047 1,540 888
(b) Aggregate information of joint ventures that are not individually material
2021 2020
$ million $ million
The market value (level 1 fair value measurement (see note 25(f))) of above listed associate, HKEI, at
31 December 2021 is $22,560 million (2020: $22,501 million). All the Group’s other associates are unlisted
corporate entities for which a quoted market price is not available.
The loans to unlisted associates are unsecured, interest bearing at rates ranging from 10.9% per annum to
11.2% per annum (2020: 10.9% per annum to 11.2% per annum) and have no fixed repayment terms.
The loans to unlisted associates are subordinated loans. The rights in respect of these loans are subordinated to
the rights of any other lenders to the associates.
The amounts due from associates are unsecured, interest free and have no fixed repayment terms.
Details of each of the Group’s material associates at the end of the reporting period are set out in Appendix 4
on page 134.
Reconciliation of the above summarised financial information to the carrying amount of the interest in the
associates recognised in the consolidated financial statements:
Net assets of the associates 48,393 47,743 4,131 2,926 9,581 9,028
Trade with customers is carried out on credit and invoices are normally due within one month after issued. All
of the trade and other receivables are expected to be recovered within one year. Further details on the Group’s
credit policy and credit risk arising from trade debtors are set out in note 25(a).
18. Bank deposits and cash and other cash flow information
(a) Bank deposits and cash comprise:
2021 2020
$ million $ million
2021 2020
$ million $ million
18. Bank deposits and cash and other cash flow information
(Continued)
(d) Reconciliation of liabilities arising from financing activities:
The table below details changes in the Group’s liabilities from financing activities, including both cash and
non-cash changes. Liabilities arising from financing activities are liabilities for which cash flows were, or
future cash flows will be, classified in the Group’s consolidated cash flow statement as cash flows from
financing activities.
Interest rate
swaps held
to hedge
Lease borrowings –
$ million Bank loans liabilities liabilities Total
All of the trade and other payables are expected to be settled within one year.
2021 2020
$ million $ million
Some banking facilities of the Group are subject to the fulfilment of covenants relating to certain of the Group’s
statement of financial position ratios, as are commonly found in lending arrangements with financial institutions.
If the Group was to breach the covenants, the drawn down facilities would become payable on demand and
any undrawn amount will be cancelled. The Group regularly monitors its compliance with these covenants.
Further details of the Group’s management of liquidity risk are set out in note 25(b). As at 31 December 2021
and 2020, none of the covenants relating to drawn down facilities had been breached.
None of the non-current interest-bearing borrowings is expected to be settled within one year. All the above
borrowings are unsecured.
2021 2020
$ million $ million
Analysed as:
Current 223 (31) 226 (206)
Non-current 1,034 (267) 704 (1,181)
1,257 (298) 930 (1,387)
One of the schemes (“the Pension Scheme”) provides pension benefits based on the employee’s final basic
salary and length of service. This scheme is accounted for as a defined benefit retirement scheme.
Another scheme is defined contribution in nature and offers its members choices to invest in various investment
funds. One of the investment funds provides a guaranteed return; the scheme is accounted for as a defined
benefit retirement scheme in respect of this investment fund (“the Guaranteed Return Scheme”). In respect
of other investment funds which do not offer a guaranteed return, the scheme is accounted for as a defined
contribution retirement scheme (see note 22(b)).
Both these schemes are established under trust and are registered under the Hong Kong Occupational
Retirement Schemes Ordinance. The assets of the schemes are held independently of the Group’s assets in
separate trustee administered funds.
The Group also participates in a master trust Mandatory Provident Fund Scheme (“MPF Scheme”) operated by
an independent service provider under the Hong Kong Mandatory Provident Fund Schemes Ordinance. The MPF
Scheme is a defined contribution retirement scheme with the employer and its employees each contributing
to the scheme in accordance with the relevant scheme rules. The MPF Scheme rules provide for voluntary
contributions to be made by the employer calculated as a percentage of the employees’ basic salaries.
Both defined retirement schemes expose the Group to investment risk and interest rate risk while the
Pension Scheme also exposes the Group to risks of longevity and inflation.
The retirement scheme expense/income recognised in profit or loss for the year ended 31 December 2021
was determined in accordance with HKAS 19 (2011), Employee benefits .
(i) The amounts recognised in the statements of financial position are as follows:
2021 2020
$ million $ million
Represented by:
Employee retirement benefit assets 7 6
Employee retirement benefit liabilities (146) (142)
(139) (136)
The assets of the Schemes did not include ordinary shares issued by the Company for the years
ended 31 December 2021 and 2020.
A portion of the above asset/liability is expected to be realised/settled after more than one year.
However, it is not practicable to segregate this amount from the amounts payable in the next 12
months, as future contributions will also relate to future changes in actuarial assumptions and
market conditions.
2021 2020
$ million $ million
(iii) Movements in fair value of plan assets of the Schemes are as follows:
2021 2020
$ million $ million
(iv) The expenses recognised in the consolidated statement of profit or loss are as follows:
2021 2020
$ million $ million
(v) The expenses are recognised in the following line items in the consolidated statement of profit or
loss:
2021 2020
$ million $ million
(vi) The cumulative amount of actuarial losses recognised in the consolidated statement of
comprehensive income is as follows:
2021 2020
$ million $ million
2021 2020
$ million $ million
Strategic investment decisions are taken with respect to the risk and return profiles. There has been
no change in the process used by the Group to manage its risks from prior periods.
(viii) The principal actuarial assumptions used as at 31 December (expressed as a weighted average) are as
follows:
2021 2020
Discount rate
– The Pension Scheme 1.0% 1.0%
– The Guaranteed Return Scheme 0.4% 0.4%
Long-term salary increase rate Not applicable Not applicable
Future pension increase rate 2.0% 2.0%
Actuarial assumptions
Discount rate
– increase by 0.25% (8) (8)
– decrease by 0.25% 8 8
Pension increase rate
– increase by 0.25% 7 8
– decrease by 0.25% (7) (8)
Mortality rate applied to specific age
– set forward 1 year (14) (15)
– set backward 1 year 14 15
Actuarial assumptions
Discount rate
– increase by 0.25% (1) (1)
– decrease by 0.25% 1 1
Interest to be credited
– increase by 0.25% 1 1
The above sensitivity analyses are based on a change in an assumption while holding all other
assumptions constant. In practice, changes in some of the assumptions may be correlated.
When calculating the sensitivity of the defined benefit obligations to significant actuarial
assumptions the same method (present value of the defined benefit obligations calculated
with the projected unit credit method at the end of the reporting period) has been applied as
when calculating the defined benefit liability recognised within the consolidated statement of
financial position.
(x) The following table sets out the weighted average durations of the defined benefit obligations of the
Schemes:
2021 2020
No. of years No. of years
The Pension Scheme 10.2 10.5
The Guaranteed Return Scheme 5.2 6.8
No forfeited contributions have been received during the year (2020: $Nil).
The Group had no material unrecognised deferred tax assets or liabilities as at 31 December 2021 and
2020.
(b) Dividends
(i) Dividends payable to equity shareholders of the Company attributable to the year:
2021 2020
$ million $ million
The final dividend proposed after the end of the reporting period is based on 2,134,261,654 ordinary
shares (2020: 2,134,261,654 ordinary shares), being the total number of issued shares at the year
end. The final dividend proposed after the end of the reporting period has not been recognised as a
liability at the end of the reporting period.
(ii) Dividends payable to equity shareholders of the Company attributable to the previous financial year
paid during the year:
2021 2020
$ million $ million
In accordance with section 135 of the Hong Kong Companies Ordinance, the ordinary shares of the
Company do not have a par value.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to
the Company’s residual assets.
The following table provides a reconciliation of the exchange reserve in respect of cost of hedging,
net investment hedges and translation on investment outside Hong Kong:
Translation
on
Net investment
Cost of investment outside
$ million hedging hedges Hong Kong Total
2021 2020
$ million $ million
Amount reclassified to profit or loss are recognised in the “Finance costs” line item in the
consolidated statement of profit or loss (see note 8). The entire balance at 31 December 2021 and
2020 in the hedging reserve relates to continuing hedges.
– to safeguard the Group’s ability to continue as a going concern, so that it can continue to provide
returns for shareholders and benefits for other stakeholders;
– to provide capital for the purpose of strengthening the Group’s risk management capability.
The Group actively and regularly reviews and manages its capital structure, taking into consideration the
future capital requirements of the Group and capital efficiency, forecast profitability, forecast operating
cash flows, forecast capital expenditure and projected investment opportunities.
The Group monitors its capital structure on the basis of a net debt-to-net total capital ratio. For this
purpose, the Group defines net debt as interest-bearing borrowings (excluding lease liabilities) less bank
deposits and cash. Net total capital includes net debt and equity which comprises all components of equity
(as shown in the consolidated statement of financial position).
During 2021, the Group’s strategy, which was unchanged from 2020, was to control its level of debt in
order to secure access to finance at a reasonable cost. In order to maintain or adjust the level of debt,
the Group may adjust the amount of dividends paid to shareholders, issue new shares, return capital to
shareholders, raise new debt financing or sell assets to reduce debt.
As at 31 December 2021, the net cash position of the Group amounted to $1,177 million (2020: $1,787
million).
During the current year, the Company acted as the guarantor in respect of certain loan facilities granted to
its subsidiaries and joint ventures and fully complied with the capital requirements under the loan facility
agreements.
The Group has defined minimum credit rating requirements and transaction limits for counterparties when
dealing in financial derivatives or placing deposits to minimise credit exposure. The Group does not expect
any counterparty to fail to meet its obligations.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset,
including derivative financial instruments, in the statement of financial position. Except for the financial
guarantees given by the Group as set out in note 27, the Group has not provided any other guarantee
which would expose the Group to credit risk. The maximum exposure to credit risk in respect of these
financial guarantees at the end of the reporting period is disclosed in note 27.
The Group has no significant concentration of credit risk arising from trade and other receivables, with
exposure spread over a number of counterparties.
The Group measures loss allowances for trade and other receivables at an amount equal to lifetime ECLs (see
note 2(l)(i)). No loss allowances are recognised as at 31 December 2021 (2020: $Nil) based on historical
actual loss experience.
Further quantitative disclosures in respect of the Group’s exposure to credit risk arising from trade and
other receivables are set out in note 17.
The following table presents the recognised financial instruments that are subject to enforceable netting
arrangements but not offset as at the end of the reporting period:
2021 2020
Gross Gross
amounts amounts
of financial of financial
instruments instruments
in the Related in the Related
consolidated financial consolidated financial
statement instruments statement instruments
of financial that are Net of financial that are Net
$ million Note position not offset amount position not offset amount
Financial assets 21
Cross currency swaps 457 – 457 195 – 195
Forward foreign exchange
contracts 800 (3) 797 735 (226) 509
Total 1,257 (3) 1,254 930 (226) 704
Financial liabilities 21
Cross currency swaps – – – 549 – 549
Interest rate swaps 150 – 150 369 – 369
Forward foreign exchange
contracts 148 (3) 145 469 (226) 243
Total 298 (3) 295 1,387 (226) 1,161
The following tables show the remaining contractual maturities at the end of the reporting period of
the Group’s non-derivative financial liabilities and derivative financial instruments, which are based on
contractual undiscounted cash flows (including interest payments computed using contractual rates or, if
floating, based on rates current at the end of the reporting period) and the earliest date the Group can be
required to pay:
2021
Contractual undiscounted cash outflow/(inflow)
More than More than
Within 1 year but 2 years but
1 year or less than less than More than
$ million on demand 2 years 5 years 5 years Total
Non-derivative financial
liabilities
Bank loans and interest accruals 29 31 3,522 – 3,582
Trade and other payables 3,380 – – – 3,380
Derivative financial instruments
Net settled
Interest rate swaps 88 93 108 – 289
Gross settled
Forward foreign exchange contracts:
– outflow 6,803 – 7,221 1,559 15,583
– inflow (6,985) – (7,851) (1,715) (16,551)
Cross currency swaps and related
interest accruals:
– outflow 2,956 5,683 507 5,686 14,832
– inflow (3,135) (5,912) (379) (5,927) (15,353)
3,136 (105) 3,128 (397) 5,762
2020
Contractual undiscounted cash outflow/(inflow)
More than More than
Within 1 year but 2 years but
1 year or less than less than More than
$ million on demand 2 years 5 years 5 years Total
Non-derivative financial
liabilities
Bank loans and interest accruals 3,643 – – – 3,643
Trade and other payables 3,390 – – – 3,390
Derivative financial instruments
Net settled
Interest rate swaps 97 98 211 – 406
Gross settled
Forward foreign exchange contracts:
– outflow 9,004 – 4,235 3,150 16,389
– inflow (9,118) – (4,368) (3,482) (16,968)
Cross currency swaps and related
interest accruals:
– outflow 304 3,114 6,162 6,166 15,746
– inflow (332) (3,133) (6,166) (6,054) (15,685)
6,988 79 74 (220) 6,921
(i) Hedging
The Group’s policy is to maintain a balanced combination of fixed and variable rate debt to
reduce its interest rate exposure. The Group also uses interest rate swaps to manage the exposure
in accordance with its treasury policy. The Group seeks to hedge the benchmark interest rate
component only. The existence of an economic relationship between the interest rate swaps and
the variable rate borrowings is determined by matching their critical contract terms, including the
reference interest rates, tenors, interest repricing dates, maturity dates, interest payment and/or
receipt dates, the notional amounts of the swaps and the outstanding principal amounts of the
loans. The main source of hedge ineffectiveness in these hedging relationships is the effect of the
counterparty and the Group’s own credit risk on the fair value of the swaps which is not reflected in
the fair value of the hedged cash flows attributable to the change in interest rates.
The following table provides information on the interest rate swaps which have been designated as
cash flow hedges of the interest rate risk inherent in the Group’s variable rate bank borrowings at
the end of the reporting period:
2021 2020
Notional amount ($ million) 3,453 3,638
Maturity date 2025 2025
Weighted average fixed swap rates 2.70% 2.70%
The carrying amount of interest rate swaps at 31 December 2021 was a liability of $150 million (2020:
$369 million).
2021 2020
Weighted Weighted
average average
interest interest
rate % $ million rate % $ million
Net fixed rate assets/
(liabilities)
Loans to unlisted joint ventures/
associates 10.0 9,149 10.1 9,219
Deposits with banks and other
financial institutions 0.4 4,548 0.5 5,371
Cross currency swaps N/A 457 N/A (354)
Bank loans 3.7 (3,433) 3.6 (3,640)
Lease liabilities 1.8 (5) 2.9 (2)
10,716 10,594
Net variable rate assets/
(liabilities)
Loans to unlisted joint ventures/
associates 4.1 6,491 4.5 6,752
Other receivable – – 0.1 336
Cash at bank and on hand – 62 – 56
Other payable 0.1 (404) 0.1 (156)
6,149 6,988
The sensitivity analysis above has been determined assuming that the change in interest rates had
occurred at the end of the reporting period and had been applied to the exposure to interest rate
risk for both derivative and non-derivative financial instruments in existence at that date. The analysis
has been performed on the same basis as for 2020.
The following table provides information on the forward foreign exchange contracts and cross
currency swaps which have been designated as hedges of the currency risk inherent in the Group’s
investments outside Hong Kong at the end of the reporting period:
2021 2020
Forward foreign exchange contracts:
Notional amount ($ million) 16,111 15,953
Maturity date Ranging from Ranging from
2022 to 2031 2021 to 2026
Weighted average contract rate:
GBP:USD 1.5105 1.5322
AUD:USD 0.7134 0.6910
USD:CAD 1.2592 1.3007
Cross currency swaps:
Notional amount ($ million) 14,404 14,404
Maturity date Ranging from Ranging from
2022 to 2027 2022 to 2027
Weighted average contract rate:
EUR:USD 1.1728 1.1728
GBP:USD 1.3848 1.3848
AUD:USD 0.7518 0.7518
The carrying amount of forward foreign exchange contracts at 31 December 2021 includes an asset
of $800 million and a liability of $145 million (2020: an asset of $735 million and a liability of $459
million). The carrying amount of cross currency swaps at 31 December 2021 includes an asset of
$457 million and a liability of $Nil (2020: an asset of $195 million and a liability of $549 million).
The change in fair value of the forward foreign exchange contracts and cross currency swaps during
2021 was a gain of $1,108 million (2020: a loss of $1,229 million) which were the effective portion
of the hedge on investments outside Hong Kong recognised in other comprehensive income (see
note 24(d)(i)).
2021
Exposure to foreign currencies
’million USD GBP AUD CAD
Trade and other receivables 16 14 3 1
Bank deposits and cash 419 1 61 –
Trade and other payables (52) – (6) –
Gross exposure arising from
recognised assets and
liabilities 383 15 58 1
Notional amounts of
forward foreign exchange
contracts used as
economic hedges 57 (9) (60) –
Overall exposure 440 6 (2) 1
2020
Exposure to foreign currencies
’million USD GBP AUD CAD
Trade and other receivables 52 19 4 1
Bank deposits and cash 476 27 – 66
Trade and other payables (20) – (6) –
Gross exposure arising from
recognised assets and
liabilities 508 46 (2) 67
Notional amounts of
forward foreign exchange
contracts used as
economic hedges 87 (27) – (66)
Overall exposure 595 19 (2) 1
2021 2020
Effect on profit Effect on profit
for the year and for the year and
revenue reserve revenue reserve
$ million increase/(decrease) increase/(decrease)
Pounds Sterling 6 19
Australian dollars (1) (1)
Canadian dollars 1 –
This sensitivity analysis assumes that the change in foreign exchange rates had been applied to
re-measure those financial instruments held by the Group which expose the Group to currency risk
at the end of the reporting period, and that all other variables, in particular interest rates, remain
constant. In this respect, it is assumed that the pegged rate between the Hong Kong dollar and the
United States dollar would be materially unaffected by any changes in movement in value of the
United States dollar against other currencies. Results of the analysis as presented in the above table
represent an aggregation of the effects on each of the Group entities’ profit for the year and other
components of equity measured in their respective functional currencies, translated into Hong Kong
dollars at the exchange rate ruling at the end of the reporting period for presentation purposes. The
analysis excludes differences that would result from the translation of the financial statements of
foreign operations into the Group’s presentation currency. The analysis has been performed on the
same basis as for 2020.
All of the Group’s unlisted investments are held for long-term strategic purposes. Their performance is
reviewed regularly based on information available to the Group.
These unlisted investments do not have a quoted market price in an active market and are recognised as
FVPL.
– Level 1 (highest level): fair values measured using quoted prices (unadjusted) in active
markets for identical financial instruments;
– Level 2: fair values measured using quoted prices in active markets for similar financial
instruments, or using valuation techniques in which all significant inputs are directly or
indirectly based on observable market data;
– Level 3 (lowest level): fair values measured using valuation techniques in which any
significant input is not based on observable market data.
Financial assets
Other non-current financial assets – 1,100 1,100
Derivative financial instruments:
– Cross currency swaps 457 – 457
– Forward foreign exchange contracts 800 – 800
1,257 1,100 2,357
Financial liabilities
Derivative financial instruments:
– Interest rate swaps (150) – (150)
– Forward foreign exchange contracts (148) – (148)
(298) – (298)
Financial assets
Other non-current financial assets – 1,100 1,100
Derivative financial instruments:
– Cross currency swaps 195 – 195
– Forward foreign exchange contracts 735 – 735
930 1,100 2,030
Financial liabilities
Derivative financial instruments:
– Interest rate swaps (369) – (369)
– Cross currency swaps (549) – (549)
– Forward foreign exchange contracts (469) – (469)
(1,387) – (1,387)
The unlisted equity securities are not traded in an active market. Their fair
values have been determined using dividend discounted model. The significant
unobservable inputs include cost of equity of 13.65% and growth rate of 2.5%.
It is estimated that a 0.5% increase/decrease in cost of equity, with other variable
held constant, would have decreased/increased the Group’s profit for the year
and revenue reserve by approximately $13 million/$14 million (2020: decreased/
increased by $13 million/$14 million). A 0.5% increase/decrease in growth rate,
with other variable held constant, would have increased/decreased the Group’s
profit for the year and revenue reserve by approximately $14 million/$13 million
(2020: increased/decreased by $14 million/$13 million).
Other investments were measured at fair value based on value inputs that are
not observable market data but change of these inputs to reasonable alternative
assumptions would not have material effect on the Group’s results and financial
position.
(ii) Fair values of financial assets and liabilities carried at other than fair value
Amounts due from joint ventures and associates, trade and other receivables, trade and other
payables and external borrowings are carried at cost or amortised cost which are not materially
different from their fair values as at 31 December 2021 and 2020.
2021 2020
$ million $ million
Contracted for:
Investment in a joint venture – 36
(a) Shareholder
Outram Limited (“Outram”), a subsidiary of the Company, reimbursed a wholly-owned subsidiary of CK
Infrastructure Holdings Limited (“CKI”) $19 million (2020: $20 million) being the actual costs incurred
for providing the operation and management services to Outram and its subsidiaries for the year. The
transactions constitute continuing connected transactions under the Listing Rules. The Company has
complied with the applicable disclosure requirements for the transactions made in respect of the period up
to 1 April 2021 and ceased to be subject to such requirements from 2 April 2021 onwards.
(c) Associates
(i) Interest income received/receivable from associates in respect of the loans to associates amounted
to $397 million (2020: $366 million) for the year. The outstanding balances with associates are
disclosed in note 15.
(ii) Other operating costs included support service charge recovered by an associate amounted to $42
million (2020: $41 million) for the total costs incurred in the provision or procurement of the general
office administration and other support services and office facilities. The outstanding balance at 31
December 2021 with the associate was $4 million (2020: $4 million).
Unless otherwise stated the above material related party transactions during the year did not constitute
discloseable connected transactions or continuing connected transaction for the Company under the Listing
Rules.
(a) Impairment
In considering the impairment losses that may be required for the Group’s assets, the recoverable amounts
of the assets need to be determined. The recoverable amount is the greater of the fair value less costs
of disposal and the value in use. It is difficult to precisely estimate the fair value less costs to disposal
because quoted market prices for these assets may not be readily available. In determining the value in
use, expected cash flows generated by the assets are discounted to their present value, which requires
significant judgement. The Group uses all readily available information in determining an amount that is a
reasonable approximation of the recoverable amount.
Any increase or decrease in impairment losses, recognised as set out above, would affect the net profit in
future years.
(b) Associates
(i) CKI Spark Holdings No. One Limited holds a 51% attributable interest in Victoria Power Networks
Pty Limited. Victoria Power Networks Pty Limited is the holding company of Powercor and CitiPower.
Powercor operates and manages an electricity distribution business in western Victoria, Australia.
CitiPower distributes electricity to the Melbourne Central business district. The Group holds 54.76%
of CKI Spark Holdings No. One Limited but the Group does not have control or joint control over it
and, therefore, it has been accounted for as an associate.
(ii) CKI Spark Holdings No. Two Limited holds a 51% attributable interest in SA Power Networks
Partnership. SA Power Networks Partnership is the sole electricity distributor in South Australia. The
Group holds 54.76% of CKI Spark Holdings No. Two Limited but the Group does not have control
or joint control over it and, therefore, it has been accounted for as an associate.
No material impacts of the pandemic have been identified on the operating results and financial positions
of the Group during the reporting period and at the date on which the Consolidated Financial Statements
were authorised for issue. This assessment was based on assumptions and estimates for current and
expected future conditions that the Group considers are relevant and reasonable. However, the severity,
duration and economic consequences of the COVID-19 pandemic are still uncertain. The accounting
estimates and assumptions involved in the assessment above may change over time in response to how
market conditions develop. Actual results may differ significantly from those assumptions and estimates.
Non-current assets
Property, plant and equipment 6 4
Investments in subsidiaries 31(a) 30,306 30,103
30,312 30,107
Current assets
Amounts due from subsidiaries 31(b) 21,043 23,032
Trade and other receivables 2 3
Bank deposits and cash 368 988
21,413 24,023
Current liabilities
Amounts due to subsidiaries 31(b) (1,420) (1,637)
Trade and other payables (347) (362)
Derivative financial instruments (3) (10)
(1,770) (2,009)
Net current assets 19,643 22,014
Total assets less current liabilities 49,955 52,121
Non-current liabilities
Lease liabilities (3) –
Employee retirement benefit liabilities (146) (142)
(149) (142)
Net assets 49,806 51,979
Approved and authorised for issue by the Board of Directors on 16 March 2022.
Proposed/
Revenue declared
Share capital reserve dividend Total
$ million (note 24(c)) (note 24(d)(iii)) (note 24(b))
The net profit for the year of the Company is $3,849 million (2020: $223 million) and is included in
determining the consolidated profit attributable to equity shareholders of the Company in the financial
statements.
All of the Company’s revenue reserve is available for distribution to equity shareholders. After the end of
the reporting period, the Directors proposed a final dividend of $2.04 per ordinary share, amounting to
$4,354 million (2020: a final dividend of $2.04 per ordinary share, amounting to $4,354 million).
Effective for
accounting
periods beginning
on or after
The Group is in the process of making an assessment of what the impact of these developments is expected
to be in the period of initial application. So far it has concluded that the adoption of them is unlikely to have a
significant impact on the Group’s results of operations and financial position.
Appendix 1
Segment information
2021
Investments
Investment United All other
$ million in HKEI Kingdom Australia Others Sub-total activities Total
Result
Segment earnings – 583 540 144 1,267 225 1,492
Depreciation and amortisation – – – – – (3) (3)
Bank deposit interest income – – – – – 12 12
Operating profit – 583 540 144 1,267 234 1,501
Finance costs – 71 (222) 26 (125) – (125)
Share of profits less losses of joint ventures
and associates (Note) 979 2,164 989 761 3,914 3 4,896
Profit before taxation 979 2,818 1,307 931 5,056 237 6,272
Income tax – 1 (24) (109) (132) – (132)
Reportable segment profit 979 2,819 1,283 822 4,924 237 6,140
At 31 December
Assets
Property, plant and equipment and
leasehold land – – – – – 20 20
Other assets – 914 358 400 1,672 867 2,539
Interest in joint ventures and associates 16,376 39,304 20,452 10,995 70,751 8 87,135
Bank deposits and cash – – – – – 4,610 4,610
Reportable segment assets 16,376 40,218 20,810 11,395 72,423 5,505 94,304
Liabilities
Segment liabilities – (332) (656) (35) (1,023) (2,810) (3,833)
Current and deferred taxation – – (3) (268) (271) – (271)
Interest-bearing borrowings – – (3,433) – (3,433) – (3,433)
Reportable segment liabilities – (332) (4,092) (303) (4,727) (2,810) (7,537)
Note: Included net amount of share of deferred tax charges on change in corporate tax rate of the United Kingdom and share of tax credit
in respect of deferred tax liabilities on intangible assets amounting to $551 million (2020: $780 million).
2020
Investments
Investment United All other
$ million in HKEI Kingdom Australia Others Sub-total activities Total
Result
Segment earnings – 548 511 205 1,264 (141) 1,123
Depreciation and amortisation – – – – – (4) (4)
Bank deposit interest income – – – – – 56 56
Operating profit – 548 511 205 1,264 (89) 1,175
Finance costs – 74 (186) 26 (86) – (86)
Share of profits less losses of joint ventures
and associates (Note) 912 1,785 1,029 1,381 4,195 4 5,111
Profit before taxation 912 2,407 1,354 1,612 5,373 (85) 6,200
Income tax – 53 (25) (96) (68) – (68)
Reportable segment profit 912 2,460 1,329 1,516 5,305 (85) 6,132
At 31 December
Assets
Property, plant and equipment and
leasehold land – – – – – 17 17
Other assets – 966 473 308 1,747 809 2,556
Interest in joint ventures and associates 16,160 38,171 20,330 10,882 69,383 9 85,552
Bank deposits and cash – – – – – 5,427 5,427
Reportable segment assets 16,160 39,137 20,803 11,190 71,130 6,262 93,552
Liabilities
Segment liabilities – (232) (1,446) (124) (1,802) (3,124) (4,926)
Current and deferred taxation – – (7) (211) (218) – (218)
Interest-bearing borrowings – – (3,640) – (3,640) (2) (3,642)
Reportable segment liabilities – (232) (5,093) (335) (5,660) (3,126) (8,786)
Appendix 2
Principal subsidiaries
The following list contains only the particulars of subsidiaries as at 31 December 2021 which principally affected the
results, assets or liabilities of the Group. The class of shares held is ordinary unless otherwise stated.
Percentage of Place of
Issued equity held by incorporation/
Name of company share capital the Company operation Principal activity
Aber Keen Limited (Formerly known as US$2 100* British Virgin Islands Property holding
Ace Keen Limited)
Associated Technical Services Limited HK$1,000,000 100 Hong Kong Consulting
Beta Central Profits Limited GBP277,303,283 100* United Kingdom Investment holding
Champion Race Limited US$2 100* British Virgin Islands/ Property holding
Hong Kong
Cheer Venture Enterprises Limited HK$4,602,240,001 100* Hong Kong Investing
Clear Eminent Limited US$1 100 British Virgin Islands Investment holding
Constant Wealth Limited US$1 100 British Virgin Islands Investing
Devin International Limited US$2 100* British Virgin Islands Investment holding
Ellanby Green Limited US$2 100* British Virgin Islands Investing
Goldteam Resources Limited US$1 and 100* British Virgin Islands Investment holding
NZ$203,250,000
HEI Leting Limited HK$94,785,185 100* Hong Kong Investment holding
HK Electric Investments Manager Limited HK$1 100* Hong Kong Trust administration
Hon King Development Limited HK$5,238,963,067 100 Hong Kong Investment holding
Hong Kong Electric International Finance A$45,952,603 100* Australia Investing
(Australia) Pty Ltd
Hongkong Electric (Natural Gas) Limited US$2 100 British Virgin Islands Investment holding
Hongkong Electric Yunnan Dali Wind HK$75,485,352 100* Hong Kong Investment holding
Power Company Limited
Jewel Star Investment Limited HK$1,283,443,709 100* Hong Kong Investing
Kentson Limited US$2 100* British Virgin Islands Investing
Kind Eagle Investment Limited HK$1,073,553,298 100 Hong Kong Investment holding
* Indirectly held
Percentage of Place of
Issued equity held by incorporation/
Name of company share capital the Company operation Principal activity
Mauve Blossom Limited US$1 100* British Virgin Islands Investment holding
Ocean Dawn Investments Limited US$1 100 British Virgin Islands Holding deposits
Optimal Glory Limited US$102 100* British Virgin Islands/ Investment holding
Hong Kong
Outram Limited US$1 100* British Virgin Islands Investment holding
PAH Canadian Midstream Assets Inc. C$866,276 100* Canada Investment holding
PAH Canadian Midstream Assets C$350,653,501 100* Canada Investment holding
Holdings Inc.
PAH Gas Infrastructure Limited GBP330,830,581 100* United Kingdom Investment holding
PAI Investment Holdings Limited HK$2 100* Hong Kong Provision of
management services
PAI International Power (Mauritius) Limited US$2 100* Mauritius Investment holding
Popular Sky Investment Limited HK$1 and 100* Hong Kong Investment holding
GBP193,500,000
Power Assets Investments Limited US$50,901 100 British Virgin Islands Investment holding
Precious Glory Limited HK$11,012,527,147 100* Hong Kong Investment holding
Quick Reach International Limited US$1 100* British Virgin Islands Obtaining external
funding
Quickview Limited US$2 100 British Virgin Islands Investment holding
Sigerson Business Corp. US$101 100* British Virgin Islands Investment holding
Smarter Corporate Limited US$2 100* British Virgin Islands Property holding
Sparkle Gain Investment Limited HK$5,238,963,067 100* Hong Kong Investment holding
Superb Year Limited US$2 100* British Virgin Islands Investment holding
Vanora Holdings Limited US$1 100* British Virgin Islands Investing
Well Joint Investment Limited HK$2,457,616,097 100* Hong Kong Investment holding
* Indirectly held
Appendix 3
Principal joint ventures
The following list contains only the particulars of joint ventures as at 31 December 2021 which principally affected the
results or assets of the Group:
Percentage of
the Group’s Place of
Issued or registered effective incorporation/ Measurement
Name of joint venture share capital interest operation Principal activity method
Australian Gas Networks Limited (note (a)) A$879,082,753 27.51% Australia Gas distribution Equity
AVR-Afvalverwerking B.V. (note (b)) EUR1 27% The Netherlands Producing energy Equity
from waste
Canadian Power Holdings Inc. (note (c)) C$206,645,761 50% Canada Electricity generation Equity
Ordinary shares
CK William UK Holdings Limited (notes (d) & (e)) GBP2,049,000,000 20% United Kingdom Investment holding Equity
Electricity First Limited (note (f)) GBP1,004 50% United Kingdom Electricity generation Equity
Husky Midstream Limited Partnership (note (g)) C$1,153,845,000 48.75% Canada Oil pipelines, storage Equity
Class A units facilities and ancillary
C$621,301,154 assets operation
Class B units
C$1,776,923
General Partnership
Interest
Northern Gas Networks Holdings Limited GBP71,670,980 41.29% United Kingdom Gas distribution Equity
(note (h))
Transmission Operations (Australia) Pty Limited A$20,979,450 50% Australia Electricity transmission Equity
(note (i))
Transmission Operations (Australia) 2 Pty A$10,382,100 50% Australia Electricity transmission Equity
Limited (note (i))
UK Power Networks Holdings Limited GBP610,000,000 40% United Kingdom Electricity distribution Equity
(note (j)) Ordinary shares
Wales & West Gas Networks (Holdings) GBP29,027 36% United Kingdom Gas distribution Equity
Limited (note (k))
Wellington Electricity Distribution Network NZ$406,500,100 50% New Zealand Electricity distribution Equity
Limited (note (l))
Notes:
(a) Australian Gas Networks Limited owns strategic gas distribution networks and transmission pipelines that operate in South Australia,
Victoria, Queensland, New South Wales and the Northern Territory.
(b) AVR-Afvalverwerking B.V. is owned by Dutch Enviro Energy Holdings B.V., which is principally engaged in the business of waste
processing and production and supply of renewable energy from the incineration of waste.
(c) Canadian Power Holdings Inc. holds 49.99% partnership interest in TransAlta Cogeneration L.P. which owns interest in four power
plants in Alberta and Ontario, Canada. Canadian Power Holdings Inc. also holds 100% interest in the Meridian gas-fired combined
cycle cogeneration plant in Saskatchewan, Canada and 100% interest in Okanagan Wind projects in British Columbia, Canada since
2021.
(d) CK William UK Holdings Limited owns 100% interest in the following companies:
Energy Developments Pty Limited owns and operates an energy generation business mainly in Australia. Multinet Group Holdings Pty
Limited and DBNGP Holdings Pty Limited operate natural gas distribution businesses in Australia.
(e) CK William UK Holdings Limited owns 66% interest in United Energy Distribution Holdings Pty Limited, which operates an energy
distribution business in Australia.
(f) Electricity First Limited holds 50% stake in Seabank Power Limited, an electricity-generating company located near Bristol in the
United Kingdom.
(g) Husky Midstream Limited Partnership assumes ownership of midstream pipeline and terminal assets in the Lloydminster region of
Alberta and Saskatchewan, Canada. Its asset portfolio includes oil pipeline, storage facilities and other ancillary assets.
(h) Northern Gas Networks Holdings Limited operates a gas distribution network in the North and North East of England.
(i) Australian Energy Operations Pty Ltd is the holding company of Transmission Operations (Australia) Pty Limited and Transmission
Operations (Australia) 2 Pty Limited, which businesses include the design, build, own and operate transmission lines and associate
terminal stations to transport the electricity generated from the Mt. Mercer, Ararat, Moorabool and Elaine Wind Farms in Victoria,
Australia to the main power grid.
(j) UK Power Networks Holdings Limited owns and operates three regulated electricity distribution networks in the United Kingdom that
cover London, South East England and East England. The power networks also include certain non-regulated electricity distribution
businesses, which consist predominantly of commercial contracts to distribute electricity to a number of privately owned sites.
(k) Wales & West Gas Networks (Holdings) Limited is engaged in gas distribution in Wales and the South West of England.
(l) Wellington Electricity Distribution Network Limited supplies electricity to Wellington, Porirua and Hutt Valley regions of New Zealand.
Appendix 4
Principal associates
The following list contains only the particulars of associates as at 31 December 2021 which principally affected the
results or assets of the Group:
Percentage of
the Group’s Place of
Issued effective incorporation/ Measurement
Name of associate share capital interest operation Principal activity method
HK Electric Investments and HK Electric 8,836,200,000 33.37% Cayman Islands/ Investment holding Equity
Investments Limited (note (a)) share stapled Hong Kong
units being the
combination of
8,836,200,000 Units,
HK$4,418,100
Ordinary shares and
HK$4,418,100
Preference shares
SA Power Networks Partnership (note (b)) N/A 27.93% Australia Electricity distribution Equity
Victoria Power Networks Pty Limited (note (c)) A$315,498,640 27.93% Australia Electricity distribution Equity
Notes:
(a) HK Electric Investments and HK Electric Investments Limited collectively (“HKEI”) holds 100% of The Hongkong Electric Company,
Limited (“HK Electric”). HK Electric is responsible for the generation, transmission, distribution and supply of electricity to Hong Kong
and Lamma Islands.
(b) SA Power Networks Partnership operates and manages the electricity distribution business in the state of South Australia in Australia.
(c) Victoria Power Networks Pty Limited is the holding company of Powercor Australia Limited (“Powercor”) and The CitiPower Trust
Limited (“CitiPower”). Powercor operates and manages an electricity distribution business in western Victoria, Australia. CitiPower
distributes electricity to the Melbourne Central business district in Australia.
IP Yuk-keung, Albert
KOH Poh Wah Share Registrar
LUI Wai Yu, Albert Computershare Hong Kong Investor
Ralph Raymond SHEA Services Limited
WU Ting Yuk, Anthony
Shops 1712–1716,
Audit Committee 17th Floor, Hopewell Centre,
183 Queen’s Road East,
IP Yuk-keung, Albert (Chairman) Wanchai, Hong Kong
KOH Poh Wah Website: www.computershare.com/hk/contact
Ralph Raymond SHEA
WU Ting Yuk, Anthony
ADR (Level 1 Programme)
Remuneration Committee Depositary
Ralph Raymond SHEA (Chairman) Citibank, N.A.
FOK Kin Ning, Canning Shareholder Services
LUI Wai Yu, Albert P.O. Box 43077, Providence,
Rhode Island 02940-3077, U.S.A.
Nomination Committee Website: www.citi.com/dr
IP Yuk-keung, Albert (Chairman) Email: [email protected]
LI Tzar Kuoi, Victor
Ralph Raymond SHEA Investor Relations
Sustainability Committee For institutional investors, please contact:
CHAN Loi Shun (Executive Director) or
TSAI Chao Chung, Charles (Chairman)
Ivan CHAN (Chief Financial Officer)
CHAN Loi Shun
IP Yuk-keung, Albert
For other investors, please contact:
Company Secretary Alex NG (Company Secretary)
Alex NG
Email: [email protected]
Principal Bankers Telephone: (852) 2122 9122
Facsimile: (852) 2180 9708
Bank of China (Hong Kong) Limited
Postal Address: G.P.O. Box 338, Hong Kong
Hang Seng Bank Limited
Address: Unit 2005, 20th Floor, Cheung Kong Center,
The Hongkong and Shanghai Banking Corporation Limited
2 Queen’s Road Central, Hong Kong
MUFG Bank, Ltd.
Financial Calendar
Interim Results Announcement 4 August 2021
Share Information
Board Lot 500 shares
Stock Codes
The Stock Exchange of Hong Kong Limited 6
Bloomberg 6 HK
Refinitiv 0006.HK
This Annual Report has been printed in both the English and Chinese languages. If shareholders who have
received an English copy of this Annual Report wish to obtain a Chinese copy, or vice versa, they may request for
it by writing to the share registrar, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell
Centre, 183 Queen’s Road East, Wanchai, Hong Kong.
This Annual Report has been posted in both the English and Chinese languages on the Company’s website at
www.powerassets.com. If, for any reason, shareholders who have chosen (or are deemed to have consented) to
receive corporate communications through the Company’s website have difficulty in gaining access to the Annual
Report, they may request that a printed copy of this Annual Report be sent to them free of charge by mail.
Shareholders may at any time change their choice of language of all future corporate communications, or choose
to receive all future corporate communications either in printed form or through the Company ’s website, by
writing to the Company at Unit 2005, 20th Floor, Cheung Kong Center, 2 Queen’s Road Central, Hong Kong or
to the share registrar, Computershare Hong Kong Investor Services Limited at the address above-mentioned or by
emailing to the Company’s email address at [email protected].