Guangnan : 2018 Environmental, Social and Governance Report

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ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

Table of content

			Pages
I.	ABOUT THIS REPORT	2
II.	STAKEHOLDERS' ENGAGEMENT	3
III.	MATERIALITY MATRIX	6
IV.	ENVIRONMENTAL PROTECTION
	1.	Management of Emissions	7
	2.	Management of Resources Utilization	18
	3.	The Environment and Natural Resources	26

1. EMPLOYMENT AND LABOR PRACTICES

	1.	Talent Selection	27
	2.	Labor Standards	28
	3.	Compensation and Welfare	29
	4.	Development and Training	30
	5.	Health and Safety	31
	6.	Compliance	32
VI.	OPERATING PRACTICES
	1.	Supply Chain Management	33
	2.	Product Responsibility	33
	3.	Anti-corruption	34
VII.	COMMUNITY INVESTMENT	35
VIII.	HONORS AND CERTIFICATIONS	36
IX.	VISION OUTLOOK	37
X.	ENVIRONMENTAL PERFORMANCE DATA SUMMARY	38
XI.	"ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTING GUIDE"	40
	BY THE STOCK EXCHANGE OF HONG KONG LIMITED

I. ABOUT THIS REPORT

The board of directors (the "Board") of Guangnan (Holdings) Limited (the "Company") is pleased to present this Environmental, Social and Governance Report (the "ESG Report") of the Company and its subsidiaries (collectively as the "Group"). This ESG Report summarizes the policies, sustainability strategies, management approach, initiatives and performance made by the Group in the environmental, social and governance (hereinafter called "ESG") aspects of its business.

The ESG Report covers information of ESG of the manufacturing and sales of tinplates and related products, distribution and sales of fresh and live foodstuffs and foodstuffs trading business of the Group for the year ended 31 December 2018. The Report discloses the required information under the "comply and explain" provisions of the ESG Reporting Guide set out in Appendix 27 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("HKEX"). A detailed HKEX ESG Guide is presented at the end of the Report. The Report does not cover the leasing of properties business as it only accounts for less than 0.77% of the Group's revenue.

The Board is responsible for the Group's ESG strategy and reporting, evaluating and determining the Group's ESG-related risks, and ensuring that appropriate and effective ESG risk management measures and internal control systems are in place. In order to determine the ESG reporting scopes, the key management personnel has discussed and decided the stakeholders and identified the environmental, social and operating items, and assessed their importance to the stakeholders and the Group. The summary of material ESG items are listed out in this report.

2	GUANGNAN (HOLDINGS) LIMITED

II. STAKEHOLDERS' ENGAGEMENT

The Group is committed to maintaining the sustainable development of its business and the environmental protection of the communities in which it operates. The Group maintains a close tie with its stakeholders, including government/regulatory organizations, shareholders/ investors, employees, customers, suppliers, community, etc. and strives to balance their opinions and interests through constructive communications in order to determine the directions of its sustainable development. The Group assesses and determines its environmental, social and governance risks, and ensures that the relevant risk management and internal control systems are operating effectively. The following table shows the management response to the stakeholders' expectations and concerns:

Stakeholders	Expectation and concern	Management response
Government/	•	Compliance with laws	• Uphold integrity and compliance in
regulatory		and regulations	operations
organizations	•	Fulfill tax obligation	• Pay tax on time, and in return
			contributing to the society
			• Establish comprehensive and effective
			internal control system
Shareholders/	•	Return on investment	• Management possesses relevant
investors	•	Information transparency	experience and professional
	•	Corporate governance	knowledge in business sustainability
		system	• Ensure transparency and efficient
			communications published in websites
			of HKEX and the Company
			• Continuous improvement to internal
			control and focus on risk management

Environmental, Social and Governance Report

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II. STAKEHOLDERS' ENGAGEMENT (CONTINUED)

Stakeholders	Expectation and concern	Management response
Employees	•	Labour rights	• Set up contractual obligations to
	•	Career development	protect labor rights
	•	Compensation and	• Encourage employees to participate in
		welfare	continuous education and professional
	•	Health and workplace	training
		safety	• Establish a fair, reasonable and
			competitive remuneration scheme
			• Improve occupational health and
			safety level
Customers	•	High-quality products and	• Improve the quality of products and
		services	services continuously in order to
	•	Timely delivery	maintain customer satisfaction
	•	Reasonable price	• Establish an effective, efficient and
			green supply chain system
			• Formulate comprehensive quality
			assurance process and recall
			procedures
			• Ensure proper contractual obligations
			are in place
Suppliers	•	Stable demand	• Ensure proper contractual obligations
	•	Good relationship with	are in place
		the Company	• Establish policy and procedures in
	•	Corporate reputation	supply chain management
			• Establish and maintain strong and
			long-term relationship with suppliers
			• Select suppliers with due care

4	GUANGNAN (HOLDINGS) LIMITED