Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Risk that ECG’s strategy to recruit merchants and suppliers is not effective.
• Risk that ECG does not have the necessary resources to fulfill its funding obligations.
• Risk that ECG’s intellectual property may be used without authorisation or stolen.
• Risk that ECG’s merchants’ online revenues are below expectations.
• Risk that ECG’s FMCG revenues from its online stores on China platforms are impaired if the platforms cannot be functioned.
• Risk that increased in operating cost such as wages will increase cash flow pressure and impact profitability.
• Uncertainties with respect to the PRC legal system may have a material adverse effect on ECG.
• Risk that ECG’s management and key personnel may discontinue their services.
• Risk that the negative indicator(s) on intangible assets, mainly on goodwill exist and therefore impairment is required.
• Risk that ECG’s inventories become obsolete.

Mitigation Strategies

• ECG has a clear business plan in place. The plan is being constantly reviewed and evaluated against operating and financial targets by senior management with the Executive Chairman.
• ECG is closely monitoring its working capital and cash flow with regular reporting to the Executive Chairman. A standby facility from the Executive Chairman is available.
• ECG relies on a combination of copyright, non-disclosure agreements and other methods to protect its intellectual property rights. To protect its trade secrets and other proprietary information, employees, consultants, advisors and collaborators are required to enter into confidentiality agreements.
• ECG mitigates this risk by redefining its target merchant pipeline and focusing marketing efforts on merchants who have a proven product and well-recognised brands and a willingness to invest in marketing activities, so that they are relatively more likely to succeed in generating online sales.
• ECG mitigates this risk by closely communicating with the operation teams of these platforms.
• ECG pays employee at market rate to attract and retain the necessary talents. ECG will mitigate this risk by evaluating outsource options against in-house team, and also considering locations of lower cost without compromising the quality of the team.
• ECG will engage PRC lawyers to mitigate such risk if necessary.
• In the event any key personnel were to leave ECG, the Nomination and Remuneration Committee would ensure a suitable replacement were found within the timeframes required and not at unreasonable cost to ECG.
• ECG had assessed the value of those intangible assets. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
• ECG mitigates this risk by closely managing the sourcing process to minimize excess inventories.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ASX Corporate Governance Council, Corporate Governance Principles and Recommendations, 3rd Edition

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Using recycling paper, promoting double-page printing, promoting a paperless environment, installing energy-efficient lighting fixtures and sectioned lighting, and introducing energy-saving equipment.

Governance Achievements

• Established a Corporate Governance Plan addressing ASX Corporate Governance Council principles.

Climate Goals & Targets

Environmental Challenges

• Risk that ECG’s strategy to recruit merchants and suppliers is not effective.
• Risk that ECG does not have the necessary resources to fulfill its funding obligations.
• Risk that ECG’s intellectual property may be used without authorisation or stolen.
• Risk that ECG’s merchants’ online revenues are below expectations.
• Risk that ECG’s FMCG revenues from its online stores on China platforms are impaired if the platforms cannot be functioned.
• Risk that increases in operating cost such as wages will increase cash flow pressure and impact profitability.
• Uncertainties with respect to the PRC legal system may have a material adverse effect on ECG.
• Risk that ECG’s management and key personnel may discontinue their services.
• Risk that the negative indicator(s) on intangible assets, mainly on goodwill exist and therefore impairment is required.
• Risk that ECG’s inventories became obsolete.
• Risk that COVID-19 pandemic cause significant operational disruption

Mitigation Strategies

• ECG has a clear business plan in place. The plan is being constantly reviewed and evaluated against operating and financial targets by senior management with the Executive Chairman.
• ECG is closely monitoring its working capital and cash flow with regular reporting to the Executive Chairman. A standby facility from the Executive Chairman is available.
• ECG relies on a combination of copyright, non-disclosure agreements and other methods to protect its intellectual property rights.
• ECG mitigates this risk by redefining its target merchant pipeline and focusing marketing efforts on merchants who have a proven product and well-recognised brands and a willingness to invest in marketing activities, so that they are relatively more likely to succeed in generating online sales.
• ECG mitigates this risk by closely communicating with the operation teams of these platforms.
• ECG pays employees at market rate to attract and retain the necessary talents. ECG will mitigate this risk by evaluating outsource options against in-house team, and also considering locations of lower cost without compromising the quality of the team.
• ECG will engage PRC lawyers to mitigate such risk if necessary.
• In the event any key personnel were to leave ECG, the Nomination and Remuneration Committee would aim to ensure a suitable replacement were found within the timeframes required and not at unreasonable cost to ECG.
• ECG has made a provision for impairment of goodwill and intangible assets of HK$33.5 million in respect of the FMCG and Amblique.
• ECG mitigates this risk by closely managing the sourcing process to minimize excess inventories.
• ECG continues to review the COVID-19 operating environment and has amended the business operations to reflect the changing operating environment. ECG actively monitors the changing consumer behavior to ensure that customer expectations continue to be met. ECG has benefited from the financial assistance measures provided by governments, to help protect both the business operations and employees.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ASX Corporate Governance Council, Corporate Governance Principles and Recommendations, 4th Edition

Third-party Assurance: PricewaterhouseCoopers